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The U.S. State Department earlier this month slapped sanctions on the parent company of at least one provider of thermal optics to American consumers. However, it\u2019s unclear whether those penalties will affect commercial availability of the increasingly popular electronic sights and viewers.<\/p>\n
The parent company of Texas-based iRayUSA is among the nearly 300 entities and individuals that the U.S. government claims aided Russia\u2019s military, in violation of trade embargoes designed to punish Russia for what it calls aggression against Ukraine.<\/p>\n
One of the companies to face sanctions is Yantai IRAY Technology Co. LTD, doing business in the United States as iRayUSA and InfiRayUSA. iRayUSA sells a number of thermal products to the U.S. consumer market, including a wide range of thermal riflescopes<\/a>, hand-held viewers, and even vehicle-mounted thermal devices.<\/p>\n According to the State Department\u2019s findings, Yantai IRAY is a \u201cPRC-based supplier of Tier 3 and Tier 4 items\u201d on the Bureau of Industry and Security\u2019s \u201cCommon High Priority List to Russian-based end-users.\u201d<\/p>\n Federal investigators claim<\/a> that Yantai IRAY supplied telescopic thermal sights to Russian-based end-users. \u201cOne of the Russian-based companies that received components from IRAY markets military thermal imagers, including IRAY\u2019s products,\u201d according to the State Department. Penalties for violating rules<\/a> that prohibit trade with Russia\u2019s military include monetary fines \u201cranging from a few thousand dollars to several millions and\/or prison time up to 30 years,\u201d according to Dow Jones.<\/p>\n But Angelo Brewer, iRayUSA\u2019s director of operations says the U.S. company is a separate operating entity and is \u201cuninvolved in the cause of the recent sanctions.\u201d<\/p>\n \u201cNeither iRayUSA nor InfiRay Outdoor were sanctioned,\u201d he says, adding \u201cthat seems to be the most intentional or unintentional point in this whole process, much to the chagrin of our competitors.\u201d<\/p>\n Indeed, the commercial market for thermal sights and devices is increasingly competitive, as more players enter the market and as more products become available to U.S. consumers. Some U.S. retailers report that sales of thermal devices<\/a> are equal to or exceeding those of traditional optics.<\/p>\n But the market is also murky. Thermal users may notice performance similarities between devices sold by different brands, often because they share internal components, including \u201cthermal cores<\/a>.\u201d These cores are manufactured by only a few companies, including some owned by iRayUSA\u2019s parent company. Whether this secondary OEM (original equipment manufacturer) market will be affected by the State Department sanctions is unclear.<\/p>\n But one of iRayUSA\u2019s competitors, which also incorporates thermal cores produced by an Yantai IRAY affiliate in their thermal devices, says the sanctions are problematic.<\/p>\n \u201cOur internal compliance officers have flagged our relationship with the IRAY company that produces these thermal cores and advised us to find another vendor,\u201d says the director of a thermal company who spoke on condition of anonymity. \u201cThe concern is that the sanctions list is tied back to the International Traffic in Arms Regulations<\/a> (ITAR), and once you get blacklisted there, you can lose a lot of business in parts of your company that don\u2019t have anything to do with thermals, or even with sports optics.\u201d<\/p>\n The executive said that his company has followed the State Department\u2019s lead and \u201cdetermined that these business entities are too interconnected. We don\u2019t care which shell games they\u2019re playing, we made a determination that we\u2019re not going to do business with companies that are supplying product to Russia.\u201d<\/p>\n The State Department\u2019s May 2 action, which is authorized by Executive Order 14024<\/a>, sanctioned more than 280 individuals and entities in order \u201cto impose additional costs on Russia for both its foreign aggression and internal repression.\u201d Another 80 entities and individuals were sanctioned for their involvement in development of Russia\u2019s \u201cfuture energy, metals, and mining production and export capacity\u201d and three individuals were specifically named in the sanctions for their alleged roles \u201cin connection with the death of Aleksey Navalny<\/a> in Russian Penal Colony IK-3.\u201d Navalny was a prominent Russian dissident who challenged the authority of Russian president Vladimir Putin and was later sentenced to a Siberian penal colony where he died in February.<\/p>\n Some retailers and distributors of thermals worry that the Yantai IRAY sanctions could cool a red-hot thermal market.<\/p>\n \u201cOne of the reasons American customers are able to buy thermal devices for under $3,000 is because companies are buying thermal cores on the OEM market,\u201d said one distributor who asked not to be named. \u201cIf one of the big suppliers of these cores goes away, prices will go up and availability will go down.\u201d<\/p>\n But in a letter to its distributors released earlier this month, iRayUSA stressed that its U.S. operations remain unaffected by ITAR sanctions.<\/p>\n \u201cThese sanctions are imposed to restrict certain technology from flowing to Russia and reduce its ability to wage war against Ukraine,\u201d the letter stated. \u201cAmong the entities named in these sanctions is Yantai IRAY Technology Company Ltd. iRayUSA\u2019s manufacturing partner is a separate entity and is uninvolved in the cause of the above sanctions. iRayUSA\u2019s business in distributing the InfiRay Outdoor Brand is only in the commercial market in the United States of America.\u201d<\/p>\n \nChilling Effect?<\/h2>\n