Zastava Arms Zastava Arms is a Serbian manufacturer of firearm s and artillery . It was founded in 1853 when it cast its first cannons . It is currently the leading producer of firearms in Serbia and is a large contributor to the local defence industry . Zastava Arms produces and exports a wide variety of products to over forty countries . History . The successful production of four four - pound cannons and two short howitzer s on October 27 , 1853 is date of foundation of Zastava Arms in Kragujevac . Between 1856 an 1860 , the facilities in Kragujevac received many upgrades to its manufacturing system , eventually allowing the plant to produce weapons with full parts interchangeability . In 1878 , one of the main priorities became the modernization of armaments . Serbian rifle „ Piboduša “ Model 1870 Peabody became obsolete with their large 14 , 9mm caliber . After a research project and a competitive tender in 1879 , a new model rifle was chosen as the replacement . The first domestic - made repeating rifle , a derivative of the Mauser Model 1871 bolt - action rifle , was designed in 1880 by Kosta Milovanović and was named " Koka ' s Rifle " , after its designer . The weapon was first manufactured in Germany and was called the Mauser - Milovanović M1878 / 80 , cal . 10 , 15mm . In 1924 and 1925 , the Ministry of the Interior signed contracts with FN Herstal , Belgium which allowed the production of M24 series bolt - action rifles chambered in 7 . 92×57mm Mauser . Factory for production of rifles and infantry ammunition was also built . The factory for production of infantry ammunition started to work on March 22 , 1928 and the factory for production of rifles and ammunition was put to operation on October 15 ( 75th anniversary of first casting of cannons in Kragujevac ) . During 1930 , the factory started the production of signal pistols 26 mm M 1929 on the basis of Czechoslovakia n licence . In July 1936 , the factory got a licence from the Czechoslovakian Zbrojovka Brno to produce light machineguns 7 , 9 mm M 1937 . Zastava Arms was heavily damaged during World War II . When Kragujevac was liberated in October 21 , 1944 , the weapons factory was put back into working order within months and production began shortly after , with the 9mm M 1944 B2 submachine gun developed during the same year . The next postwar production rifle was the 7 . 92x57mm Mauser Model 1948 on the basis of Model 24 . The production of air rifles and sporting rifles on the basis of rifle M48 started in 1953 . In 1954 the Zastava started the production of shotguns and small bore rifles , as well as machine gun 7 , 9 mm M42 ¨Sarac¨ . Batch production of semi - automatic rifle PAP M59 7 , 26x39 mm started in 1964 . In the 1964 , the factory started the development of automatic rifle , of Kalashnikov system , which was named M67 in 1967 . On the basis of rifle M67 , the factory developed automatic rifle in caliber 7 . 62x39 mm , which was named Zastava M70 in the following year . Yugoslav People ' s Army included assault rifle M70 in calibre 7 . 62 x 39 mm into its armament in 1970 . Small arms derivatives of the M70 produced rifles chambered in Western bloc ammunition such as 7 . 62×51mm NATO and 5 . 56×45mm NATO . In 1988 , the factory developed a compact design pistol in 9 mm Parabellum model M88 . In the 1980s , the plant for action of machine guns M84 , M86 in 7 . 62x54 and heavy machine gun in 12 . 7 NSV M87 was set to operation as well . In July 1989 Zastava started the development of the double - action pistol in calibre 9mm PARA CZ 99 . In 1992 , the factory finished the development and testing and started batch production of 7 . 62 mm submachine gun M92 , based on submachine gun M85 . Using the Mauser mechanism , the factory developed 12 . 7 mm long range rifle Black Arrow M93 . During the Yugoslav Wars of 1991 to 1995 , the United Nations placed economic sanctions on the import and export of weapons from Yugoslavia , production slowed as a result . In 1999 the factory was damaged by NATO bombing . In 2005 Zastava Arms underwent restructuring . The same year , a memorandum of understanding was signed with Remington Arms to export hunting and sporting guns to the United States , Canada and Mexico .