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. Last Updated: 07/27/2016

Weapons Exporters To Merge

In a move to streamline the arms export system, President-elect Vladimir Putin signed a decree Friday merging two leading arms mediators into one company.

A presidential administration official confirmed in a telephone interview Friday that Putin has ordered the merger of Promexport and Rossiiskiye Tekhnologii, but declined to elaborate.

Reached by telephone Friday, a Promexport official praised the decision to merge the enterprises and said the tie-up would help boost sales of military technologies.

The official, who asked not to be identified, said Promexport can sell millions of dollars worth of military technologies annually and help draw much-needed foreign investment into the development of new arms, which Russia cannot fund on its own.

Rossiiskiye Tekhnologii has been trying to export weapons technologies since 1997, when President Boris Yeltsin signed a decree that at once transformed Promexport from a foreign-trade association into a state unitary enterprise and established Rossiiskiye Tekhnologii.

Working on its own, Rossiiskiye Tekhnologii managed to export just $20 million worth of technologies in 1999.

Promexport has been successfully exporting existing weaponry, spare parts and ammunition decommissioned by the Defense Ministry, but until this merger it could not export new technology.

Promexport has a $900 million order portfolio for 2000. The enterprise sold $200 million worth of arms in 1998 and another $150 million in 1999.

Promexport is the second-largest arms exporter after Moscow-based Rosvooruzheniye, which sold $2.8 billion worth of arms in 1999 and has orders worth more than $8 billion. Recently, Rosvooruzheniye set up its own joint venture, dubbed Krondshtadt, to export defense-software technologies.

Promexport chief Sergei Chemezov is the President-elect's own proteg?, with Putin having lobbied then-President Yeltsin for Chemezov's appointment to the director general post.

A defense industry source said Friday that reforms of the arms-export system can be expected to continue, with Chemezov lobbying to have his company and Rosvooruzheniye united into a single holding so as to end their rivalry.