Clarifying What Happened With US Dept of Treasury and KALASHNIKOV

Rumors can generate some real stress so I want to recap what just happened factually.  Yesterday, the US Department of Treasury added certain Russian Firms to the “Specially Designated Nationals” list, which means US firms and individuals are prohibited from doing business with the named people or entities (such as corporations).  Here is the list of military industrial-related corporations they added:

  • Bazalt
  • Sozvezdie
  • NPO Mashinostroyenia
  • Almaz-Antey
  • Kalashnikov
  • KBP Instrument Design Bureau
  • Uralvagonzavod

For those of us into Russian firearms, the kicker is the addition of the holding company known as KALASHNIKOV  and here’s the actual SDN entry:

IZHMASH; a.k.a. KALASHNIKOV CONCERN; f.k.a. NPO IZHMASH OAO; a.k.a. OJSC CONCERN KALASHNIKOV; f.k.a. OJSC IZHMASH), 3, Derjabin Pr., Izhevsk , Udmurt Republic 426006, Russia; Registration ID 1111832003018 [UKRAINE2].”  — This is from the Treasury’s SDN update page 90 of the PDF:

Now, some people thought this just meant the Saiga line would be banned but the problem is that KALASHNIKOV is a holding company made up of both the Izhmash (Saiga) and Molot (Vepr).  To prove this, the following report is from Rostec who owns KALASHNIKOV, regarding the companies KALASHNIKOV owns:

  • JSC ‘NPO ‘IZHMASH’, Udmurt Republic
  • JSC ‘Izhevski mashzavod’, Udmurt Republic
  • ‘Koshkin Automatic line design bureau’ JSC, Moscow Region
  • ‘Klimov Special Ammunition Plant’, Moscow Region
  • JSC ‘NITI Progress’, Udmurt Republic
  • JSC ‘Molot’, Udmurt Republic
  • JSC ‘Izhevsky Mekhanichesky Zavod’, Udmurt Republic

The source page is:

Given my research, it is clear both Saiga and Molot lines of rifles and shotguns will be blocked but the bad news does not end there.

The actual executive order passed by President Obama is far broader and states:

    Section 1. (a) All property and interests in property that 
are in the United States, that hereafter come within the United 
States, or that are or hereafter come within the possession or 
control of any United States person (including any foreign 
branch) of the following persons are blocked and may not be 
transferred, paid, exported, withdrawn, or otherwise dealt in:
          (i) the persons listed in the Annex to this order; 
          (ii) persons determined by the Secretary of the 
        Treasury, in consultation with the Secretary of State:
                  (A) to be an official of the Government of 
                the Russian Federation;
                  (B) to operate in the arms or related 
                materiel sector in the Russian Federation;
                  (C) to be owned or controlled by, or to have 
                acted or purported to act for or on behalf of, 
                directly or indirectly:
                          (1) a senior official of the 
                        Government of the Russian Federation; 
                          (2) a person whose property and 
                        interests in property are blocked 
                        pursuant to this order; or
                  (D) to have materially assisted, sponsored, 
                or provided financial, material, or 
                technological support for, or goods or services 
                to or in support of:
                          (1) a senior official of the 
                        Government of the Russian Federation; 
                          (2) a person whose property and 
                        interests in property are blocked 
                        pursuant to this order.
    (b) The prohibitions in subsection (a) of this section 
apply except to the extent provided by statutes, or in 
regulations, orders, directives, or licenses that may be issued 
pursuant to this order, and notwithstanding any contract 
entered into or any license or permit granted prior to the 
effective date of this order.


It would appear that existing contracts will be/should be honored.  Given the broad wording, this executive order could be used to block *new* contracts for the importation of Russian ammo as well.  In looking around so far this morning (6:30-7am Eastern), there didn’t appear to be price gouging by the big suppliers yet.  For example, SGAmmo still has fair prices for 7.62×39.  I must admit I am a bit nervous only for the reason that Golden Tiger is made in Russia by Vympel, also known as “Federal State Enterprise Production’s Amursk Cartridge Plant Vympel”.  I can only imagine that as word gets out there will be a run on Russian firearms and ammo that will only increase as time goes on until the word is fully spread.  Again, bear in mind that existing contracts should be honored given the above.

In short, Saiga and Vepr are blocked by name due to the KALASHNIKOV reference and the executive order could be used to block any *new* requests to import firearms or ammunition in general from Russia.  Not good news but with that said, there are many other countries with arms and ammunition production capabilities that will clearly exploit this opportunity.  People would be well served to start researching alternatives from Serbia, Romania, Poland and so forth.

Ultimately, only time will tell but I hope this gives people a better understanding of what was signed into law on July 16th.