Exactly how else should the seller ensure that goods get to the target destination? Short of putting it in his luggage and personally flying to Russia and having the buyer meet him at the airport, I honestly don't see how he can make sure the item reaches the buyer when customs decides to confiscate it? He filed the insurance claim, and it was denied. This was a deal done with full disclosure ahead of time. In the very sale thread it specifies that international shipping would only be agreed to if the buyer agreed to assume all risks involved with such a venture. It's neither the buyer nor the seller's fault that the item in question got grabbed in customs, but that certainly doesn't entitle the buyer to a full refund because the buyer agreed to assume all the risks. If the plane crashed into the ocean and the package was lost at sea, if a mail carrier or customs snatched it, if it spontaneously combusted, if it fell off a truck somewhere, all of these potential risks were assumed and agreed to by the buyer.
Can you argue that the seller probably knew the knife wouldn't get there? I suppose you could argue that, but international shipping is always tricky. Customs are complicated and vary from country to country just like knife and gun laws do from state to state in the USA. Should he have sent it out if he even thought it might not get there? What kind of a question is this, really? Any time you send something through the mail, whether it's to another country, another state, or to someone 4 blocks over from you, there is a chance it might not arrive. Using that logic, none of us should ever buy, sell, trade, exchange, or give away anything here because there is always a chance the item might not arrive for any number of reasons.
Unfortunately the buyer is out some money. Sometimes in life you just have to nod your head and accept that things don't always work out. But let's not start acting like the seller just decided to stop caring the moment he got the funds. That knife still got sent, still got insured, and an insurance claim was still filed when it was revealed the item didn't make it through customs.