Despite some waning interest in certain quarters around the world, the largest war in Europe since World War II rages on in Ukraine. Buoyed by a major, bipartisan U.S. aid package Kyiv has found new hope and Russian President Vladimir Putin is again talking about making a deal.
One key arms supplier to Ukraine is the Czechoslovak Group (CSG), supplying refurbished T-72 tanks along with ammunition, howitzers and other equipment to the war effort. CSG has made an agreement to purchase the ammunition business from U.S.-based Vista Outdoor, which is currently under review by the Committee on Foreign Investment in the United States (CIFIUS). The transaction should be permitted to proceed as it fits squarely in U.S. national security interests.
On October 16, 2023, Vista Outdoor announced an agreement to sell its ammunition business to CSG. This business unit includes household name brands like Remington and Federal, with four facilities in Arkansas, Idaho, and Minnesota employing approximately 4,000 American workers. Shortly after the deal was announced, a Vista Board Member resigned and provided an unsolicited competing offer. Final approval of the transaction is required by CFIUS, which could be imminent.
The CIFIUS process was created by President Gerald Ford in 1975 to begin to scrutinize foreign investment in the United States. Its’ authority and scope has been expanded and strengthened in subsequent years to help prevent hostile foreign powers like China and Russia from acquiring companies in strategically important industries. The committee is a tightly controlled, confidential process run by the U.S. Department of Treasury with key national security inputs from all the important agencies including the Central Intelligence Agency, the Federal Bureau of Investigation and, and the Director of National Intelligence.
Additionally, it is important to note that CSG is already a key part of America’s defense industrial base. It has a long track record of collaborating with such blue-chip defense contractors as Raytheon, to conduct Afghan pilot Black Hawk training, and General Dynamics on armored personnel carriers and ammunition. Further, CSG received CFIUS approval just two years ago and currently already operates other ammunition manufacturing facilities in the U.S. This is clearly a trusted partner to U.S. defense giants.
CSG of course is based in Czeck Republic, which has been a strong NATO partner since it joined the alliance in 1999. Czech President Petr Pavel wrote earlier this year on the 25th anniversary of Czech ascension to NATO that: “In light of the aggressive intentions of Russian President Vladimir Putin’s regime - which does not conceal its interest in renewing Russia’s sphere of influence in Europe - it is now clearer than ever before that membership in the Alliance is of utmost importance.” He continued: “We must maintain NATO’s internal cohesion so that we do not lose this advantage. The Kremlin is, of course, aware of these conditions, which is why it is intensifying its long-term hybrid actions against European democracies.” Last year, after slipping in its commitment for years, the NATO requirement to spend 2% of GDP on defense was enshrined in Czech law. The Czeck Republic is doing its part.
Finally, the U.S. Federal Trade Commission has already approved the transaction and the financing is backed by U.S. banking leader JP Morgan Chase.
In this case, CIFIUS should be allowed to conclude its process in a fair and objective manner without undue outside influence. A key supplier to the war in Ukraine hailing from a NATO partner deserves no less.
Mr. Keiser is Senior Principal at Navigators Global, a Senior Fellow at the National Security Institute, and a former Senior Advisor to the House Intelligence Committee.
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