The Haas Formula 1 team has denied a report claiming the machine tools business it shares branding with broke export restrictions by supplying equipment to Russia following the country’s invasion of Ukraine.
Haas F1 Team and Haas Automation are owned by Gene Haas. On Tuesday American news channel PBS ran a report claiming Haas Automation products were transported to Russia between March and October last year. Russia invaded Ukraine on February 24th, 2022.A statement issued by the team insisted “the story is simply false, both in its overall impression and in many of its particular statements.”
Haas Automation attacked the report. Vice president of outside operations Peter Zierhut said PBS’ claim that “at least 18 shipments were made to Russia directly from Haas worth $2.8 million from March 4 though October of last year” was a “complete falsehood.”
“It is irresponsible in the extreme for PBS to present this poorly-sourced hit piece, which ignores basic facts and asserts other facts that are clearly false,” Zierhut concluded.
Russia’s invasion of Ukraine had immediate implications for Haas’s F1 Team, which was sponsored by Russian chemicals giant Uralkali at the time. The team immediately ended the association with its title sponsor and terminated the contract of driver Nikita Mazepin, son of Uralkali chief Dmitry Mazepin. Haas Automation noted the cancellation of that deal cost it “millions of dollars”.
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Haas Automation statement on PBS story
On Tuesday, March 14, PBS ran a story alleging that Haas Automation has directly provided machines and parts to Russia in violation of U.S. export control and sanctions regulations. That story is simply false, both in its overall impression and in many of its particular statements.
Key Points:
Haas is and has always been in full compliance with U.S. Government export control
No machines have shipped from the Haas factory to Russia since March 3, 2022
The 18 machines referenced in the story left the Haas factory prior to the Russian invasion of Ukraine
Haas voluntarily chose to terminate its relationship with the Russian distributor, which has never been required by any U.S. sanctions
Haas completely supports Ukraine and its people in their defence against Russia
As you may know, Haas Automation, like many U.S. companies, does not sell its machines directly to any end-user customers, in Russia or anywhere else. Instead, it sells machines to independent distributors, who in turn sell them to their customers. Haas follows this business model worldwide, both in the U.S. and in the more than 50 countries in which it has distributors.
While Haas’ distributors are independent companies that are not owned or controlled by Haas Automation, all Haas distributors, including Abamet Management, its then sole existing independent distributor for Russia and Belarus, are contractually required to comply with all applicable U.S. export control and sanctions regulations. In addition, Haas has, for decades, implemented a comprehensive export and sanctions compliance program that provides additional screening and other checks to help ensure all machines or other items sold by Haas are only exported, re-exported, or transferred in full compliance with U.S. law, including ensuring the machines are only provided to permissible end customers, and only for permissible end-uses.
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On March 3, 2022, shortly after the Russian invasion of Ukraine, Haas Automation terminated, in its entirety, its relationship with its sole existing independent distributor for Russia and Belarus, Abamet Management. Since that date, Haas has not sold or shipped any machines, parts, or software to Abamet or anyone else in Russia. This crucial fact was made clear to the PBS reporter before the story was aired.
Additionally, at the time it terminated its relationship with Abamet in March, Haas voluntarily cancelled 50 existing machine orders from Abamet, even though such orders may have been permissible under then existing U.S. export control and sanctions regulations.
The PBS report acknowledges that Haas terminated its relationship with Abamet in March of 2022, but claims that customs records “put that account into doubt.” The report claims that “at least 18 shipments were made to Russia directly from Haas worth $2.8 million from March 4 though October of last year.” This is a complete falsehood, as Haas made no direct or indirect sales or shipments to Russia after March 3, 2022.It’s important to note, however, that Haas’ sales to Abamet were made such that Abamet took physical possession and title to the goods when they were picked up by Abamet from Haas’ factory in Oxnard, California. Thus, at the time Haas terminated its relationship with Abamet, Abamet had possession, title, and control over a number of machines and spare parts it had acquired from Haas prior to Russia’s invasion of Ukraine. While Haas did not have physical control over such products, all of the products were subject to Abamet’s certification to Haas that it would not export any Haas products in violation of applicable U.S. export control and sanctions laws, and Haas is certainly not aware of any instances where it did so.
Simply put, if any shipments of Haas manufactured machines or components occurred after March 3, 2022, such shipments were made, unbeknownst to Haas, by Abamet or one of Haas’ numerous other customers around the world. Any such shipments would have been made in direct contravention of express Haas policy with regard to Russia following its February 2022 invasion of Ukraine.
To be clear, Haas has unequivocally, and in many cases voluntarily, ceased doing business with Russian companies on all fronts. In addition to terminating its relationship with Abamet and prohibiting exports or re-exports of Haas products to Russia, Haas terminated, at a cost to itself of millions of dollars, a Russian company’s sponsorship of the Haas Formula 1 racing team.
As many of you know, Haas has been manufacturing machines for more than 30 years, and there are more than 200,000 Haas machines currently in use throughout the world. Throughout that period, Haas has been a strict adherent to all U.S. export control and sanctions regulations, and an even stronger supporter of the U.S. policy goals many of those regulations are designed to address.
In particular, Haas, as a company, has deplored Russia’s invasion of Ukraine, and taken every step in its control to cease doing business with Russia or Russian companies. It has also taken affirmative measures to support Ukraine, including, in compliance with U.S. export control and sanctions regulations, providing Haas’ distributor in Ukraine and its Ukrainian customers expedited delivery of Haas manufactured machines. These, and earlier provided Haas machines, are directly and indirectly supporting Ukraine’s efforts to defend itself against Russia’s unwarranted invasion.
It is a bitter irony, therefore, that the PBS report paints Haas as being supportive of the Russian military, which couldn’t be further from the truth. At a time when Americans are struggling to develop the most effective course of conduct in support of Ukraine, it is irresponsible in the extreme for PBS to present this poorly-sourced hit piece, which ignores basic facts and asserts other facts that are clearly false.
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Biggsy
16th March 2023, 10:03
I wonder how many of the current F1 sponsors have contracts with US and UK military/weapons/systems.
US and UK spent the last 20+ years bombing and invading bunch of countries, and yet, suddenly it’s a big problem if some company has any kind of connection with Russia.
Bob
16th March 2023, 10:13
Spot on
BamBoomBots
16th March 2023, 10:16
It’s telling for the times we live in that literally the first comment on an article like this is a whataboutism and false equation.
Smile
16th March 2023, 11:23
So which bit is false? Care to elaborate?
Whataboutism is a word used by those who can’t be bothered to come up with an actual counter argument
The US, UK and Israel have done far far worse than Russia over the last 20 years. Where are the sanctions? The reality is double standards are everywhere. Does that make Russia right? No but the rest of the world who has suffered for the last 20+ years will speak out about the fact that the previous aggressors were never held accountable.
Zeyar
16th March 2023, 13:01
It’s not false equation since the sins of America run much deeper.
And calling precedent law whataboutism is very ignorant. It’s what international relations and anglophone legal system is based on.
Fer no.65 (@fer-no65)
16th March 2023, 13:51
You need to read more, mate…
Claus J
16th March 2023, 15:58
So, if he read more he would somehow learn to find it OK to justify business relations with Russia by prior wars in the Gulf by other states? What literature would be required to make Whataboutery acceptable?
I’ve read plenty, and I’m not there yet either.
Biggsy
17th March 2023, 6:04
Calling out hypocrisy and double standards isn’t whataboutism.
Nick T.
16th March 2023, 23:16
Yeah, the US is always trying to annex territory, letting their soldiers rape and torture civilians by the literal thousands (and giving them medals too just like Putin), castrating POWs, kidnapping children, threatening nuclear war, deliberately targeting civilians, trying to hold world food security hostage, using nuclear plants as shields, kidnapping children en masse, discussing triggering super volcanoes in each other’s countries, using sledge hammers to execute soldiers who surrendered, etc.
And I’m sure, just as the US spent hundreds of billions of dollars on improving Iraqi and Afghani public infrastructure, the Russians will do the same in Ukraine.
It’s totally the same thing…we need more, deeply informed people like yourself.
Biggsy
17th March 2023, 6:03
You are so far gone, if you believe what you just wrote.
Nick T.
17th March 2023, 9:02
These are all documented facts. Name a single one and I’ll provide a dozen sources for each.
ruliemaulana (@ruliemaulana)
16th March 2023, 11:34
The nation that bombed two cities, starved half million children with economic sanction, evaporated villages, killed people on their wedding, think that everyone should not doing business with some invader.
Nick T.
16th March 2023, 23:26
It’s almost as if you’re deliberately using half-truths, lies by omission and blaming what foreign leaders did to their own people on the U.S. to influence people. Surely not though.
It’s also sounds like you’re OK with what’s happening since bad things have been done by countries before. Surely not though.
Seems like tankies and bots use Google News alerts since they’re just randomly popping up on RaceFans out of nowhere.
Proesterchen_nli
16th March 2023, 12:28
That a bunch of empty bluster ahead of the literal admission that Haas didn’t prevent the export of its machines or parts to Russia while somehow relying on a relationship that Haas itself claims was already terminated.
Claus J
16th March 2023, 15:49
Where do you see any admissions – not to mention a literal one – that Haas let exports happen that they had the ability to stop? I read the entire article as one long denial of any exports after 4/3… Mind you, I have no idea if Haas did or didn’t prevent exports or reexports within their control – but it certainly does not sound like they admit to any such thing in the article above…
I’m not a native English speaker, so it may simply be a case of an insurmountable language barrier; but I honestly don’t understand what you’re trying to say here. Could you please elaborate?
Proesterchen (@proesterchen)
16th March 2023, 16:21
If you require your distributors to follow certain guidelines but terminate your relationship with at least one of your distributors who you know full well was in possession of your machines and replacement parts at the time of termination, how do you expect said former distributor of yours to follow the guidelines that no longer apply?
Notice how Haas states that they severed their relationship, in its entirety, on March 3rd, 2022, while the PBS report cites shipments “from March 4 through October of last year”. (i.e. after the relationship with Abamet was terminated, and all the flowery language Haas used to explain its guidelines no longer applied to their now-no-longer distribution partner)
Nick T.
16th March 2023, 23:31
Moreover, while the US doesn’t have Britain’s obscene libel laws, we still do have slander laws. I doubts an organization as conservative as PBS’ News Hour would make such an accusation without pretty damning evidence. Most American news organizations tends not to make these sort of accusations without it going through rounds of editor and lawyer reviews for just that reason.
BasCB (@bascb)
17th March 2023, 8:22
As @proesterchen points out, it is clear from Haas’ debunk/reaction that there may well have been (i.e. probably were since PBS would have double checked they were shipped) several machines that were already bought and “in the possession of” the russian/belarus representative company before Haas cancelled all contracts.
They did not prevent these machines from being shipped (well, technically they told the company not to with their guidelines, although that still would probably not prevent shipping anyway) to Russia. Now, I am not certain it was illegal to ship those machines (since some/most sanctions do not stop execution of contracts that were signed well ahead of the sanctions coming into force), but fact is that they were made by Haas and were shipped.
This is comparable to all the industrial equipment that was shown to still be sent to Russia by companies in France, Germany and many other EU countries after EU sanctions (both from last year and from 2014).
Claus J
17th March 2023, 14:25
How and with what authority do You suggest Haas should prevent final shipping and delivery from a Russian distributor to the enduser?
Haas claim no machines were sent post 3/3 and the 18 machines subsequently arriving at Russian customers were shipped from distributors stockpiles – despite demands from Haas not to do so. What should they have done further? It would make zero sense to take it to a Russian court and they had no way to sanction the distributors themselves…
Nick T.
16th March 2023, 23:41
However, there is one very good reason to doubt the allegations or at least doubt that the c-suite knew. Because, $2.8m is very little money to risk your reputation, criminal prosecution, etc. for.
Nate Johnson
16th March 2023, 14:55
PBS has now joined The Fake News Syndicate… 😕
Nick T.
17th March 2023, 9:03
You mean the “news I don’t like syndicate.”
Nick T.
16th March 2023, 23:34
If these allegations end up being proven and it wasn’t like a single or just a few tiny shipments, this could result in a situation where Haas is forced to sell, giving Andretti a golden opportunity to secure an entry.
Esploratore (@esploratore1)
17th March 2023, 0:52
Wouldn’t mind that, especially with steiner’s attitude.