With the crippling sanctions set in place by the Western Powers hitting Russia hard due to its support to the rebels in Ukraine and annexation of the Crimean Peninsula, some companies that were part of the sanctions list have to find a way to continue doing business in overseas markets. For Kalashnikov Concern, the U.S. market is their biggest market for the export of their AKs and Saigas, having a local partner in the form of the Tullytown, Pennsylvania-based Russian Weapons Company (RWC Group LLC.).
Since the sanctions began, the importation of AKs to the U.S. are illegal, which also means the supplies of AKs for the U.S. civilian market where there is a high demand, will soon become low even if the company has enough inventory for now.
But if they are locally made "Made in the USA" AKs, then that would not be a problem since what are covered by the sanctions are the imports, which is otherwise called "import substitution". That's the move taken by the RWC Group LLC to meet the growing demand for AKs which they announced during the SHOT Show 2015 in Las Vegas.
Kalashnikov Concern is perfectly ok with it, according to Sputnik News, a newly-launched Russian media group:
"The production of the Kalashnikov Concern has traditionally maintained its leadership positions on the American market. The introduction of sanctions has substantially increased interest in the Concern's production, and we believe that such a move on the part of the RWC [Russian Weapons Company] is completely logical under the present circumstances. We can only note that such a step once again highlights the popularity of the legendary AK assault rifle," a spokesperson for the company said.
RWC is not even permitted to contact Kalashnikov Concern as part of the sanctions and this decision for import-substitution is their own to make without any consideration on how Kalashnikov Concern will react. Perhaps the Russians are looking far ahead, that when the Ukrainian crisis blows over, and the sanctions lifted, they will formalize the relationship with RWC to be local distributor and manufacturer of Kalashnikovs via licensing agreements.
There is no information yet where RWC will be setting up a factory as reports last month state that they are still looking for a suitable location. So far, the reaction of the local market to an American-made AK has been positive.