Prince Law Offices, P.C.

By Joshua Prince, Esq.

The National Shooting Sports Foundation (NSSF) issued a report depicting the importation and exportation data for December of 2011. Their report for both importation and exportation is broken down into six categories:

1. Handgun;
2. Rifle;
3. Shotgun;
4. Muzzle Loader;
5. Other Cartridges; and
6. Shotgun Cartridges;

Importation: The importation statistics showed that imports increased 3.2% in comparison to December 2010. Handgun imports increased 42.9%; (48.5% increase in pistols and 22.1% increase in revolvers); Rifle imports increased 22.4%; Shotgun imports increased  11.3%; Muzzle Loaders increased 113.2%; Other Cartridges decreased 1.1%; and Shotgun Cartridges increased 164.7%.

Exportation: The exportation statistic, however, showed that exports decreased 41.3%. in comparison to December 2010. Handgun imports decreased 8.4% (8.1% decrease in pistols and 11/2% decrease in revolvers); Rifle exports increased 24%; Shotgun exports decreased 52.6%; Muzzle Loaders decreased 47%; Other Cartridges decreased 46.2%; and Shotgun Cartridges decreased 164.7%.

These statistics would seem to reflect the raising competitive nature of the international firearms industry. While importing firearms can be time-consuming and frustrating, the cost-benefit of doing such seems to clearly be in favor of importation, over the cost of American products being exported; however, just because an item is imported does not mean that it was sold. Nevertheless, given the economic times that we find ourselves in, I believe more individuals are looking to purchase cheaper firearms. Since foreign made firearms tend to be cheaper than domestically made firearms, this may be the underlying reason for the jump in imports and the decline in exports.

If you have questions about obtaining a Federal Firearms License (FFL) to import firearms, dealing with the Directorate of Defense Trade Control and the International Firearms in Arms Regulations (ITAR) or simply importing/exporting firearms related products, do not hesitate to contact me.

The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF or BATFE) entered into ruelmaking the other day to extend the term for an Import License. The Attorney General of the United States is responsible for enforcing Section 38 of the Arms Export Control Act (AECA), the Gun Control Act, and the National Firearms Act.  The Attorney General has delegated these duties to the Director of the ATF, pursuant to 28 C.F.R. 0.130. Currently, one must file a Form 6–Part 1 with the ATF and obtain approval to import a firearm. The maximum duration of an import license is one year. See 27 C.F.R. 447.43(a). Furthermore, if the shipment is not completed within that one year period, another Form 6–Part 1 must be submitted and approval obtained for the unshipped balance. See 27 C.F.R. 447.43(b).

In August of 2010, The FireArms Import-Export Roundtable (FAIR) Trade Group submitted a petition to the ATF requesting that the period of validity be extended from one year to two years, because this would be beneficial to the Industry and ATF, without having any impact on public safety or compliance with the laws. FAIR stated in its Petition,

[E]xtending the period a license [permit] is valid could reduce the workload for [ATF] examiners by lowering the number of renewals submitted to ATF and reduce the uncertainty importers face when dealing with long-lead time deals. [Many licensed and/or registered importers import the same defense articles year after year. ATF processes these ‘‘renewal’’ permits.]

Renewals are a relatively common procedure—whether for items stored in a CBD [sic] or for transactions that take longer than a year to complete—that the industry must undertake at this time. Renewals of existing permits are perfunctory processes that consume the valuable resources of both the industry and the ATF. The time necessary to log, process and approve these permits does not appear to provide any additive compliance or enforcement value to the importation process.

FAIR also submitted information showing that approximately 50% of the granted Import Licenses, of the 9,000, per year, require renewal. Hence, by changing the time period from one year to two years, the ATF would have approximately 4500 less applications to review and, in essence, re-approve; thereby, reducing expense. The ATF estimates that it currently takes an an Importer’s employee approximately 30 minutes to review and complete a Form 6 –Part 1 application, where the average hourly wage of an employee is $26.50. This would result in approximately a $59,625 annual savings for Importers. Furthermore, the ATF spends approximately $28, for two hours of a data entry contractors time, having the information from each Form 6–Part 1 entered into its systems and reviewed; plus, $97.88 for four hours of an examiner’s time to review and approve each Form 6–Part 1. This equates to an approximate total annual savings of $571,320 for the ATF.

Because this change to the current regulation would greatly benefit the Industry, as well as the ATF, I am highly suggesting that you take the time and write a comment regarding this change. Remember, typically Administrative Agencies only receive negative comments, which can greatly hurt positive changes, because the agency cannot show the Congress that any individual is supporting the change. The easiest way to submit a comment is to go to the  Federal eRulemaking Portal and follow the instructions for submitting comments; or, here is a direct link. If you rather send it via US Mail, send it to: Deborah G. Szczenski, Industry, Operations Specialist, Mailstop 6N–602, Bureau of Alcohol, Tobacco, Firearms, and Explosives, 99 New York Avenue NE., Washington, DC 20226; ATTN: ATF 43P. Written comments must appear in minimum 12-point size of type (.17 inches), include the commenter’s mailing address, be signed, and may be of any length. You can also fax it to (202) 648–9741.

The ATF Town Hall meeting was held on Wednesday, January 18, 2012, and the NFATCA meeting was held tonight. While there was nothing earth shattering from the Town Hall meeting, there were some very interesting issues that were discussed at the NFATCA meeting.

With regards to the ATF Town Hall, the big issue discussed was the impending changes to the residency requirements for an alien. On December 22, 2012, the ATF issued an open letter to all FFLs regarding changes to its interpretation of of the residency requirement for aliens. Currently, 27 CFR 478.11 provides that residency be determined differently for US citizens than for legal aliens. As the letter states, “A U.S. citizen’s State of residence is the State in which he or she is present with the intention of making a home; while an alien is considered a resident of a State if he or she has resided in that State for a period of at least 90 days prior to the date of transfer with the intention of making a home.”

ATF is now entering into rulemaking to remove the 90-day residency requirement for legal aliens. However, until rulemaking is complete, the current regulation still applies. Nevertheless, ATF stated that no Industry Operations Inspector (IOI) should cite an FFL for not complying with this documentation requirement. Accordingly, if you are cited for an failure to comply with this requirement, contact me immediately to discuss your options.

Also discussed was the fact that all manufacturers will have until April 2nd, 2012 (not April 1, 2012) to file their annual manufacturing report. While ATF will mail you out a copy, if you don’t receive a copy or want to be ahead of the curve, here is a copy of the ATF Form 5300.11. For those who are unaware, you can file this report via email by emailing it to AFMER2@atf.gov. You will receive a confirmation email of their receipt of the form within several days. If you have questions about filling out the 5300.11, most of your questions can be answered here. And yes, even if you did not manufacture a single firearm, you must submit the form.

When the ATF was asked the status of the Chief Law Enforcement Officer signature being removed from the Form 1 and Form 4, ATF would only acknowledge that it was aware of the request, that the request had merit, but that it was still being reviewed internally at ATF and there was absolutely no time frame established for a determination, since even if ATF was in agreement, it would require them to go through rulemaking, which would seem to indicate that we are at least a year away from any change.

The issue of ATF Form 1 and Form 4 processing was also brought up. ATF’s response was that they are under the hiring freeze of the DOJ and while they have attempted to bring in temporary employees and move people around from different departments, due to the increase in NFA applications, the wait time of 4 – 6 months is not likely to change anytime soon.

During the NFATCA meeting, it was disclosed that the ATF, as of last week, has changed its opinion regarding the proper procedure for deactivating a barrel for importation. Previously, ATF issued a letter stating that drilling three holes into the barrel was sufficient. While destroying the functionality of the barrel, it allowed for the barrel to be used in a dummy-gun for a collector, who basically desired a non-functioning replica of a particular firearm. ATF has now announced that it is requiring any such imported barrel to be torch cut in three locations.

Also, ATF has now stated that after having the Department of Justice (DOJ), Office of Legal Counsel (OLC) review 18 U.S.C. § 922, it has been decided by OLC that a manufacture may stockpile as many post-86 machineguns as that manufacturer sees fit; however, only the manufacturer may manufacture the post-86 machinegun. What this means, is that it is no longer acceptable or legal, even if the manufacturer has a variance approving the following, for one manufacturer to manufacture the receiver, register the receiver on a Form 2, and then transfer the receiver on a Form 3 to another manufacturer for completion. The OLC has determined that the only transfer of a post-86 machinegun is to a law enforcement agency. There are clearly other concerning issues with regards to this that I will not address, in the hopes that they have eluded ATF.

Lastly, the NFATCA informed everyone that ATF is under specific direction that anything less than 100% during a compliance inspection must result in some form of administrative action. ATF will be conducting compliance inspections of all dealers within 36 months; the days of not having a compliance inspection for 10 years are a thing of the past.

And that is pretty much all the hot topics from the ATF Town Hall meeting and NFATCA meeting.

For years, actually ever since President Reagan promised to do away with the Bureau of Alcohol, Tobacco, Firearms, and Explosives, people have asked will the ATF be disbanded. Today, Columnist Katie Pavlich, published an article entitled Bombshell: DOJ Considering Elimination of ATF.

Columinst Pavlich cites to multiple sources within the DOJ and ATF that have confirmed the existence of a “white paper,” which outlines the elimination of the ATF and reassignment of ATF law enforcement duties to the FBI and DEA. What makes this even more credible is the fact that this author knows that for several years there have been behind the scenes discussions of FBI taking over ATF’s law enforcement duties, but the FBI has outwardly refused to employ any existing ATF agents. This white paper would seem to indicate that all ATF Agents would be terminated and not reassigned.

While the elimination of the 1920′s era ATF would be a welcomed improvement, I still have concerns over how much the FBI, DHS, and DEA knew, condoned, and aided in Operation Fast and Furious. Would we be any better off? While I do have more faith in the FBI, DHS, and the DEA to prevent future Waco-like scenarios, I still have concerns regarding all of our federal agencies and the lack seemingly lack of oversight…

Frequently, the issue arises as to whether an FFL can turn over possession of a firearm to the spouse, or other family member, of the person purchasing the firearm when the Pennsylvania Instant Check System (PICS) inquiry comes back with a response of proceed for the purchaser. Usually, the situation is one where the purchaser initially receives a response from PICS of “undetermined.” Later, the FFLreceives a “proceed” response from PICS and contacts the purchaser. Unfortunately, the purchaser is busy and inquires whether his wife or son can come pick up the firearm. Unfortunately, the FFL cannot, as the background check was performed on the purchaser, not the spouse or other family member.

If you have any questions as an FFL or issues when dealing with theATF/PSP, please do not hesitate to contact me.

Frequently, FFLs inquire as to whether they can sell a firearm to an individual who lacks government-issued photo identification. Consistent with 27 C.F.R. 478.11 and 478.124©, a purchaser may be identified by any combination of documents that together establish all of the following required information: 1. Name; 2. Residence address; 3. Date of birth; and 4. Photograph of the purchaser.

Thus, a purchaser could use a government-issued non-driver license photo ID, in combination with a Social Security card, or other form of ID, that establishes the required information. If you ever have a question, before proceeding with a sale, call your local ATF field office to inquire as to whether the documents you are utilizing are acceptable.

If you ever have a question about what documents are necessary or have issues with the ATF/PSP, please do not hesitate to contact me