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. Last Updated: 07/27/2016

BUSINESS AND THE LAW: Lax U.S. Rules Draw Gunmakers




WASHINGTON -- As increasingly restrictive gun laws are enacted in major industrialized countries, gunmakers around the globe are flocking to the biggest and least regulated gun market in the world f the United States.


At least a dozen entities with familiar names in the United States, from historic Smith & Wesson and Winchester to Beretta and Glock, are owned by foreign companies, many of which are legally constrained from selling in their own countries many of the guns they produce. But as overseas countries increasingly have cracked down on gun sales at home, they have not passed similar laws regarding exports.


Just more than half of the 1.7 million handguns made or imported in the United States came from foreign companies or were made by their subsidiaries, according to 1997 figures from individual companies and the Bureau of Alcohol, Tobacco and Firearms.


Gun industry officials say they are simply selling their products in the best possible market.


"Companies invest where there are markets, and the U.S. is one of the few places in the world where gun ownership proliferates," said Wendy Cukier, a professor of business and justice studies at Ryerson Polytechnic University in Toronto who has written about differences in international gun laws.


Jeff Reh, Beretta U.S.A. Corp.'s general counsel, said the U.S. subsidiary is responsible only for marketing guns here. "It's not hypocritical for a company to obey the laws of the country it sells in," he said of the differences in gun laws in the United States and Italy. "It doesn't mean the company agrees the law is logical. It just means it's acting as a good corporate citizen."


"Some countries choose to have stricter gun laws. ? We think that's unfortunate," said Travis Hall, public relations manager for Browning and U.S. Repeating Arms Co., which owns the license to make Winchester firearms. Browning and Winchester are sister companies owned by Fabrique Nationale Group, an entity of the Belgian government. Many of their guns are made in Japan, where it is almost impossible for a private citizen to own a gun.


Beretta U.S.A., with U.S. headquarters in Accokeek, Maryland, is a subsidiary of the Italian gun company P. Beretta S.P.A. Glock Inc., one of the biggest providers of guns to U.S. police departments, is an offshoot of an Austrian company. SIGArms Inc., an importer of handguns in New Hampshire, is a division of Swiss Industrial Group, which imports from Switzerland and Germany. Each of those countries has more restrictive gun laws than the United States.


"The biggest market [for guns] is in the U.S.," said Ken Jorgenson, general counsel of Smith & Wesson, the largest maker of handguns in the United States and a subsidiary of a British conglomerate. Two years ago, after a 1996 elementary-school massacre in Scotland, the British government outlawed the sale of handguns and ordered the surrender of all existing handguns.


With virtually all gun manufacturers privately held, it is difficult to assemble a complete picture of the profits, revenues or even market share in the global gun market. Only one U.S. gun manufacturer f Sturm, Ruger & Co. f is publicly owned and thus discloses financial information, while many foreign-owned companies are part of big corporations that do not break out financial information about their subsidiaries.


In some cases, foreign gun companies have set up plants in the United States specifically so they can make guns here that they couldn't import. Congress has set higher standards for guns that are imported than for guns made in the U.S.


Glock of Austria assembles about 200,000 handguns a year from Austrian-made parts at a plant near Atlanta. Austria is the No. 1 exporter of guns to the United States, shipping more than 170,000 guns in 1998, according to the Customs Service. Most of those guns were Glocks, since there is no other major Austrian exporter of guns. In Austria, citizens must be 21 to own a handgun, must have a license and can buy a maximum of two handguns per person.


Beretta U.S.A. is a subsidiary of the oldest gun company in the world, founded in Italy in the 14th century. Like other European countries, Italy requires hunters to show membership in a hunting club in which they have been trained before they get a license for a rifle. For a handgun, individuals must prove they genuinely need the gun for self-defense.


"Europeans are so sanctimonious about their gun-control laws," said Jim Pasco, executive director of the Fraternal Order of Police. "But their shock at our rate of gun deaths doesn't keep them from making guns. ? It's ironic that the money goes back to those countries."