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Small-arms maker Heckler & Koch reportedly leaving non-NATO market

Reuters recently reported that the German small-arms maker Heckler & Koch (HK) is abandoning efforts to sell firearms to governments clients outside of NATO.

HK’s decision comes amid increasing regulatory and trade restrictions from Berlin, which has in recent years scaled back efforts to export big-ticket defence items to the Middle East, most notably Saudi Arabia.

Saudi Arabia had originally selected and even ordered the HK G36 with partial domestic manufacturing.

However, in 2013, the German government failed to issue permits to export the requisite components necessary to complete a batch of firearms. This prompted HK to sue the German government.

Interestingly, HK’s decision may also rule out the sales of its arms to close non-NATO U.S. allies such as India and Brazil, and even a fellow NATO member – i.e. Turkey.

Notes & Comments:

Although HK did recently win France’s $181 million U.S. tender for 90,000 new rifles to replace the French Army’s legacy FAMAS assault rifles, there is no doubt that HK’s inability to competitively function in the vast non-NATO market cuts it from a significant long-term revenue pool.

In March 2016, the Pakistan Army began trialing a few assault rifles, including the FN Herstal SCAR from Belgium and Beretta ARX-200 from Italy, for its next-generation rifle program.

HK did not submit a rifle, which at the time was a notable omission considering the Pakistan Army’s current mainstay battle rifle is the HK G-3. While not surprising in hindsight, the inclusion of the HK-416 and/or HK-417 in that competition could have impacted the outcome.

In November, Pakistan Ordnance Factories (POF) signed a letter-of-understanding (LoU) to negotiate with the Czech firearm maker Česká Zbrojovka (CZ) to “intensively negotiate [the] delivery of complete technology for the production of small arms to [POF].”

Considering that the CZ-806 BREN 2 was among the rifles examined by the Pakistan Army in the spring and summer, it is likely that the LoU was about the BREN.

If brought to fruition, CZ will have achieved a rifle sale amounting to the hundreds of thousands within Pakistan alone. In partnership with POF, CZ’s scope could expand into other markets, such as Saudi Arabia, Azerbaijan, Nigeria, and others. This is merely one case, there are also other entirely different avenues in India, Pacific Asia, North Africa, and Latin America.

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  • by Matthys Jacobs
    Posted December 6, 2016 4:02 am 0Likes

    They stopped selling to South Africa 4 years ago.

  • by Shakeel
    Posted December 6, 2016 3:07 pm 0Likes

    The decision baffle me.Don’t know whats worse, selling asmall arms or a Leopard 2 tank to Qater/Saudi’s. May be Germany is genuinely concerned about the amount of crime committed in Karachi or Johannesburg. Who nows? Germany might be trying to ‘export some love’ abroad. How bizarre indeed.

  • by Shakeel
    Posted December 6, 2016 3:09 pm 0Likes

    From the picture above, the HK416 looks like a beautiful assualt rifle. Is it truly as good as it looks?

  • by jamshed_kharian_pak
    Posted December 6, 2016 7:38 pm 0Likes

    The nowadays german government of MerkeL is busy how to forbid Burqa

  • by Matthys Jacobs
    Posted December 7, 2016 3:29 am 0Likes

    Well, H&K has never sold to the South African Civilian Market.

    It has only sold to the South African Police Special Forces and the South African Military Special Forces.

    I think Germany blocked a sale to Saudi Arabia for the h&K as well. I see it has more to do with small arms rather than actual full systems such as a main battle tank etc.

    This is why, H&K should perhaps have a subsidiary operating from a country with more relaxed export laws.

    Rheinmetall has done this previously for ammunition production in Malaysia, Saudi Arabia and South Africa.

  • by Steve
    Posted December 7, 2016 4:33 am 0Likes

    Well if HK want to shoot themselves in the foot, (no pun intended), so be it. Pity though, given the long relationship with POF. It is probably a moral decision of the government influenced by the recent explosion of wars in the Middle East and Africa, and the resulting wholescale slaughter of innocents mostly by small arms. The Germans and Scandinavians still have some morals guiding their policies. They do have a blind spot concerning coalition air strikes and heavy arms sales but that would be too much of a shift for them. The HK416 is very attractive. For once we should not settle for second best because of resource crunch caused by economic mismanagement, but buy the best and spread the cost. Hopefully we should have definitive news about BREN 2 soon!

  • by Shakeel
    Posted December 7, 2016 1:28 pm 0Likes

    Thank you Matthys for the insightful points you have raised. Interesting take on the subsidiary operating companies.

  • by Halz
    Posted December 7, 2016 4:18 pm 0Likes

    It is bizarre indeed. However, I think Germany is just worried that their products will end up in the hands of Saudi sponsored stateless groups. There is a larger chance of small arms ending up in Syria than say German Leopards.

  • by T-123456
    Posted December 8, 2016 12:31 pm 0Likes

    Germany did this with many of its military equipment,”no sale” to certain countries but tech transfer by setting up companies in those countries to call it ”indigenous”.
    Whatever floots your boat.

  • by Jean Racine
    Posted December 10, 2016 1:22 am 0Likes

    Purported reason being “no guarantee German small arms won’t find their way into Zimbabwe”. Same thing with Saudi and the conflicts in Yemen and Syria.

    Funny thing is they won’t sell directly to Mexico, but have not asked the US to provide guarantees that said products won’t find their way south of the border.

  • by Matthys Jacobs
    Posted December 10, 2016 1:28 pm 0Likes

    Different rules for different people I guess.

  • by Mark Farris
    Posted December 16, 2016 8:33 am 0Likes

    Germany is loosing it with Merkel suffering from some kind of post Nazi guilt banning the sale of “evil” German Arms and allowing the nation to be flooded with Nazi-like extremist could this be the end of Germany?!?!?!

  • by zach amin
    Posted January 4, 2017 5:12 pm 0Likes

    all small groups whether terrorists or freedom fighters use Kalashan Kov AKA AK47s. When world best Armies want to buy your weapons, they will not spread the technology or sell it to rogue entities or even the freedom fighters. Example is HK-G3 that is widely used by Pakistan Army. Even POF MP5 that Pakistan exports has full blessings of German Gov and HK.

  • by zach amin
    Posted January 4, 2017 5:16 pm 0Likes

    Blocking a sale of their guns to KSA won’t make any difference. They have a lot of quality rifles to chose from so many different countries

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