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The defense industry is part of the general industry. Many countries do not have weapon and ammunition factories while some have one and a small number of countries have many. Defense industries can be taken over in the same way other industries are taken over and become private corporations.
It is possible that a weapon factory in one country will sell products to the enemy by offering products in the open market. It is however possible to prevent such transactions and also protect the defense industries against hostile takeovers.
Using the national industry feature, up to twenty-four corporations can be protected against a hostile takeover. Using direct contracts between countries and selling products through these private contracts can prevent weapons from falling into the wrong hands.
A corporation can reserve up to 100% of its production for private contracts but should make sure these contracts are in place or otherwise, it will build up a stock of unsold products.