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Cablegate: Blue Lantern Level 3: Pre-License Check On

VZCZCXYZ0000
RR RUEHWEB

DE RUEHMO #4189 2400606
ZNR UUUUU ZZH
R 280606Z AUG 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 3274
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RHMFIUU/FBI WASHINGTON DC
RUEAIIA/CIA WASHDC
RUEKJCS/SECDEF WASHDC

UNCLAS MOSCOW 004189

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ETTC KOMC RS
SUBJECT: BLUE LANTERN LEVEL 3: PRE-LICENSE CHECK ON
APPLICATION 050052700

REF: SECSTATE 104411

1. (U) Reftel requested a pre-license check to confirm the
bona fides of the World of Arms company, the foreign
consignee listed in the license applications detailed in the
DTC Case 050052700. The commodities in question are 30 Model
597 Semi Auto rifles, .22 cal W/Scope and 20 Model 700 Bolt
Action rifles, .17-.458 cal W/Scope, valued at USD 17,990.00.

2. (U) On August 16, 2007, we visited the headquarters and
showroom of World of Arms located at 24a Kotelnicheskava,
140000 Lubertsy, Russia. The team met with Mr. Vladimir L.
Nosikov, First Deputy General Director of Kolchuga Limited
and Sergey Frolenkov, General Director of World of Arms.

3. (U) Kolchuga was founded in 1993 as a hunting and
shooting sports retailer, and has since added two additional
locations in the Moscow area and a network of 50 independent
distributors throughout Russia. In addition, Kolchuga has
its own taxidermy specialty service, a security company, and
a realty company. Kolchuga's stores sell approximately 750
rifles and shotguns per month, plus it sells approximately
300 rifles and shotguns a month to its network of
distributors. Kolchuga also sells ammunition for rifles and
shotguns and a wide range of hunting and shooting
accessories. Kolchuga is owned by Mr. Mikhail Khubutia and
Mr. Rafael Etoumyan, though operations are managed by the
General Director, Mr. Alexander Nikolayich Elysiev. Mr.
Nosikov described Kolchuga's typical customer as male, 25-45
years old, and "well off" financially. The hunting and
shooting sports market in Russia is well established.

4. (U) World of Arms is a wholly owned subsidiary of
Kolchuga, founded in 2006 as part of the company
reorganization. World of Arms will be responsible for
warehousing and distribution of firearms, ammunition, knives,
and other sporting goods and accessories for the Kolchuga
stores and 280 associated dealerships throughout Russia.
World of Arms employs around 200 people at their premises in
Lubertsy. Prior to 2006, Kolchuga had been utilizing
long-term storage made available by the Ministry of Emergency
Situations in downtown Moscow, but was unable to continue the
arrangement due to the Ministry's operational needs.
Kolchuga's facility includes several large high-security
rooms for firearms and ammunition. In addition, Kolchuga has
a small showroom and shop at the location.

5. (U) Kolchuga and World of Arms are familiar with the
requirements of U.S. export control licenses, as they have
been the recipient of both State Department and Commerce
Department licenses. The sale of firearms and ammunition
requires special permits from the Government of Russia (GOR),
and requires the seller to keep records of sales. The
records are kept both in hand-written bound logbooks and a
computerized database maintained by Kolchuga for the purpose
of printing monthly reports for the Ministry of Internal
Affairs. The data include date of purchase, purchaser's name
and permit number, model and serial number for firearms, type
and quantity of ammunition purchased, and the buyer's
signature. Individuals may own only five firearms (rifles or
shotguns, handguns are limited to security or police use),
and may purchase only ammunition of a type corresponding to
firearms they own. Buyers are limited to 400 rounds of
ammunition per visit.

6. (U) Firearms and ammunition are stored in locked cabinets
within the World of Arms showroom. The showroom has armed
security during business hours provided both by Kolchuga's
own security company and a police officer on detail. The
facility has an electronic security system linked to the
police, heavy reinforced doors, and all exterior windows in
the storage area are barred on both sides.
Burns

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