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Viewing cable 08KYIV1268, UKRAINE: RESPONSE TO BLUE LANTERN PRE-LICENSE END-USE CHECK

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Reference ID Created Released Classification Origin
08KYIV1268 2008-07-01 15:31 2011-08-24 16:30 UNCLASSIFIED Embassy Kyiv
VZCZCXYZ0002
RR RUEHWEB

DE RUEHKV #1268/01 1831531
ZNR UUUUU ZZH
R 011531Z JUL 08
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC 5935
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUETIAA/DIRNSA FT GEORGE G MEADE MD
RUEAIIA/CIA WASHDC
RHMCSUU/FBI WASHINGTON DC
RUEKJCS/SECDEF WASHDC
UNCLAS KYIV 001268 
 
SIPDIS 
 
STATE FOR PM/DTCC - BLUE LANTERN COORDINATOR 
 
E.O. 12958: N/A 
TAGS: ETTC KOMC UP
SUBJECT: UKRAINE: RESPONSE TO BLUE LANTERN PRE-LICENSE END-USE CHECK 
ON LICENSE 050104685: EUROPA ARM SPORT 
 
REF: State 63378 
 
1.  This is a reply to a Blue Lantern action request (reftel). 
 
2. Post was requested to conduct a pre-license check on DDTC license 
application number 050104685 for the export of rifles to Ukraine 
(applicant: Marlin Firearms Co., 100 Kenna Drive, North Haven, CT). 
The foreign end-user is Europa Arm Sport, Blvd. Druzhby Narodiv 7, 
Office 106, Kyiv. 
 
2.  Economic Officer Matthew Habinowski (U.S. citizen) and FSN 
Economic Specialist Yevgeniya Ignatenko (Ukrainian national) 
conducted a pre-license check at subject firm's offices in Kyiv on 
June 26, 2008.  The firm's contact telephone number is 
380-44-529-8381 or 9522.  Post met with Larisa Grunskene, President, 
and Igor Lukiants, Chief Product Manager, and other company 
representatives. 
 
3. Europa Arm Sport (EAS) is a wholesaler established in the year 
2000 by Grunskene to complement her existing "Ibis" hunting and 
fishing retail outlets.  Ibis is a well-known high-end chain in 
Kyiv, with five locations on some of Kyiv's main thoroughfares. 
Grunskene is the President of both companies and told Econoff that 
the two companies share management, office space and resources, and 
differ only on paper. In addition to its retail operations, EAS/Ibis 
also operate a shooting range and gun repair shop and produce a 
magazine for sportsman, "Okhota & Oruzhiye" ("Hunting and Weapons"). 
 Grunskene estimated that, in total, her operations employed 250 
people. 
 
4. Grunskene noted that EAS had in the past purchased Marlin rifles 
from European wholesalers and this purchase marked the first time 
that EAS would buy directly from the manufacturer. Lukiants told 
Econoff that he anticipated that a majority of the 910 rifles Europa 
Arm Sport hopes to purchase from Marlin will be sold through Ibis 
retail outlets.  The remainder will be sold to retailers outside of 
the capital that have been certified by the Ministry of Interior. 
Lukiants explained that the Marlin rifle was growing in popularity 
in Ukraine due to its low cost (Note: Retail prices for Marlin 
rifles at the Ibis store visited by Econoff ranged from USD 
300-1000. It appeared that other manufacturers' rifles started at 
USD 1000. End note.).  Ukrainians had previously purchased 
inexpensive Russian rifles, he claimed, but now Russian producers 
were experiencing difficulties in supplying the Ukrainian market due 
to limited production capacity and high domestic demand.  Further, 
Lukiants told Econoff that Marlin rifles were gaining popularity in 
Ukraine because they were reliable, relatively small and use high 
caliber ammunition, all of which is ideal for hunting wild boar, a 
common target of Ukrainian sportsmen. 
 
5. When asked about the size of the EAS order, Grunskene admitted to 
Econoff that the volume was higher than usual, but it was done in 
reaction to news that U.S. manufacturer Remington would be 
purchasing Marlin.  She feared that the acquisition and subsequent 
reorganization of Marlin would cause supply disruptions leading up 
to Ukraine's August/September wild boar hunting season, so EAS 
placed one large order to have a year's worth of inventory. 
 
6.  In response to questions in reftel paragraph 4, Post learned the 
following: 
 
-- Europa Arm Sport was established in 2000.  Ibis opened its first 
retail location in 1994.   The owner and president of both companies 
is Larisa Grunskene. 
 
-- Europa Arm Sport's primary customer is Ibis, which, in turn, 
sells the guns to individuals in Kyiv.  EAS also sells guns to 
retail stores outside of Kyiv. 
 
-- Grunskene and Lukiants showed Econoff the database where, in 
accordance with Ukrainian law, EAS/Ibis maintain a database of all 
customers, including the purchaser's name, license number, and 
address. 
 
-- Weapons purchased by EAS for sale are stored at a central storage 
facility in Kyiv (also at Blvd. Druzhby Narodiv 7) or, to a lesser 
extent, at the Ibis locations.  All EAS/Ibis facilities, according 
to Grunskene, comply with Ukrainian law and feature metal storage 
lockers, combination locks, an alarm system, and police patrol. 
 
-- Company representatives appeared well-informed of U.S. export 
controls, and demonstrated an understanding of re-export 
restrictions. 
 
7. Post was able to schedule a site visit without delay from the 
company.  Representatives appeared friendly, transparent, and 
 
willing to accommodate any of Post's requests for information.  Much 
to Econoff's surprise, all of Grunskene's senior staff spoke 
English, possibly an indication of work or travel overseas. 
Grunskene herself mentioned visiting the SHOT Show convention in Las 
Vegas. Company offices at Blvd. Druzhby Narodiv 7 were lively, with 
busy employees at well-equipped workstations, and appear to have 
undergone renovation to replicate the look and feel of a hunting 
lodge.  The Ibis store around the corner from the corporate office 
was comparable in appearance to similar stores in the U.S. and 
seemed to be doing a brisk business at mid-day during the workweek. 
 
8.  Recommendation: Post recommends issuing a license to the company 
for the purchase of Marlin rifles. 
 
Taylor