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Monday, March 17, 2014

Executive Order 13661: Blocking Property of Additional Persons Contributing to the Situation in Ukraine

We are now seeing the latest Executive Order from President Obama in consideration of the current situation in the Ukraine. There is no need to get into a discussion considering the political wrangling between Ukraine and Russia, but the curious aspect is how this will effect the consumer and possibly U.S. companies in the firearms industry. The one aspect that is of most interest is that any dealings between U.S. entities/market and someone in the "arms or related materiel sector in the Russian Federation" will cease.

Now these legal documents can certainly be a bit to comprehend outside of legal geniuses, but it appears any Russian property that is not already in place e.g. parts, ammo, firearms in the hands of U.S. based companies will no longer be available. This means Tula, Brown Bear, Izhmash, MOLOT (VEPR) etc. will only exist in current quantities already on hand with U.S. businesses. So, if this plays out how we are comprehending it, 7.62x39 won't be the only thing in shortage. Cheap steel case ammo in all calibers  from .223 Rem Herters to .308 Wolf will become a well sought item after current supplies dwindle. Of course you may have other entities outside of Russia including U.S. manufacturers pick up their game to fill in the gap, but we will be curious to see the capabilities with the raw materials on hand.

This is a blow to the Russian government, whether they want to admit it or not. There has been a big push for them to increase their imports to the U.S. and as we have reported in the past they have enlisted U.S. liasons like Steven Seagal to help them surpass any barriers to further their recent gains in the market. They have put a lot into their firearms industry and have brought in private investors to take over a big portion of their small arms manufacturing in the recently named Kalashnikov Concern, which merged several firearms and ammunition manufacturers. This private investment was to help make their small arms industry a viable concern that could turn a profit and improve quality and product design. They recently signed an agreement with the Russian Weapon Company (RWC) to sell 200,000 firearms in the US for 2014. There are certainly ramifications here for many, but the Russian Government clearly banking on the market of the United States to improve their firearms industry.

You can read the complete Executive Order 13661 below and ascertain your own opinion. 

Executive Order -- Blocking Property of Additional Persons Contributing to the Situation in Ukraine

EXECUTIVE ORDER
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BLOCKING PROPERTY OF ADDITIONAL PERSONS CONTRIBUTING
TO THE SITUATION IN UKRAINE
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.) (NEA), section 212(f) of the Immigration and Nationality Act of 1952 (8 U.S.C. 1182(f)), and section 301 of title 3, United States Code,
I, BARACK OBAMA, President of the United States of America, hereby expand the scope of the national emergency declared in Executive Order 13660 of March 6, 2014, finding that the actions and policies of the Government of the Russian Federation with respect to Ukraine -- including the recent deployment of Russian Federation military forces in the Crimea region of Ukraine -- undermine democratic processes and institutions in Ukraine; threaten its peace, security, stability, sovereignty, and territorial integrity; and contribute to the misappropriation of its assets, and thereby constitute an unusual and extraordinary threat to the national security and foreign policy of the United States. Accordingly, I hereby order:
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; and
(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; or
(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; or
(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.
Sec. 2. I hereby find that the unrestricted immigrant and nonimmigrant entry into the United States of aliens determined to meet one or more of the criteria in section 1(a) of this order would be detrimental to the interests of the United States, and I hereby suspend entry into the United States, as immigrants or nonimmigrants, of such persons. Such persons shall be treated as persons covered by section 1 of Proclamation 8693 of July 24, 2011 (Suspension of Entry of Aliens Subject to United Nations Security Council Travel Bans and International Emergency Economic Powers Act Sanctions).
Sec. 3. I hereby determine that the making of donations of the type of articles specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)) by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to section 1 of this order would seriously impair my ability to deal with the national emergency declared in Executive Order 13660, and I hereby prohibit such donations as provided by section 1 of this order.
Sec. 4. The prohibitions in section 1 of this order include but are not limited to:
(a) the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order; and
(b) the receipt of any contribution or provision of funds, goods, or services from any such person.
Sec. 5. (a) Any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited.
(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.
Sec. 6. For the purposes of this order:
(a) the term "person" means an individual or entity;
(b) the term "entity" means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization;
(c) the term "United States person" means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States; and
(d) the term the "Government of the Russian Federation" means the Government of the Russian Federation, any political subdivision, agency, or instrumentality thereof, including the Central Bank of the Government of the Russian Federation, and any person owned or controlled by, or acting for or on behalf of, the Government of the Russian Federation.
Sec. 7. For those persons whose property and interests in property are blocked pursuant to this order who might have a constitutional presence in the United States, I find that because of the ability to transfer funds or other assets instantaneously, prior notice to such persons of measures to be taken pursuant to this order would render those measures ineffectual. I therefore determine that for these measures to be effective in addressing the national emergency declared in Executive Order 13660, there need be no prior notice of a listing or determination made pursuant to section 1 of this order.
Sec. 8. The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA, as may be necessary to carry out the purposes of this order. The Secretary of the Treasury may redelegate any of these functions to other officers and agencies of the United States Government consistent with applicable law. All agencies of the United States Government are hereby directed to take all appropriate measures within their authority to carry out the provisions of this order.
Sec. 9. The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to determine that circumstances no longer warrant the blocking of the property and interests in property of a person listed in the Annex to this order, and to take necessary action to give effect to that determination.
Sec. 10. This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
Sec. 11. This order is effective at 12:01 a.m. eastern daylight time on March 17, 2014.
BARACK OBAMA