Ron,
That is correct. Initially the allies agreed to refrain from providing German officials with side arms made in Germany. But that didn't work. France was running Mauser for their own inventory, the Russians had captured the gun companies in Suhl and the Americans really didn't care either. Serious rearming of the East-Germans started in the early 1950s when major reforms (read nationalization of companies) were taking place and the DDR was afraid that capital and material would be moved towards the West. Border security was increased, which introduced a need for equipment. Russian captured guns were the easiest option initially. This in turn spawned the rework programs in the DDR.
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