ATF Panel Discussion at recent Firearm Industry Importer, Exporter and Manufacture Conference

On August 2nd and 3rd, 2011, The National Shooting Sports Foundation, FAIR Trade Group and the National Firearms Act Trade & Collectors Association sponsored the Firearms Industry Importer, Exporter and Manufacturer Conference in Reston, Virginia. On the first day of the conference, the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted a question and answer session to address three primary issues presently facing the industry.

The first issue revolved around whether the conversion of a pistol to a rifle and then back to a pistol constitutes the manufacture of a short barreled rifle subject to the National Firearms Act (NFA) and, therefore, requiring registration as a short-barreled rifle and subjecting the firearm to taxation as well. Although there was some considerable debate among the panel and conference participants, theBATF seemed to offer the opinion that such a conversion can be made without having to register the firearm as short-barreled rifle. Such a determination seems to follow in the US Supreme Court’s opinion in the United States v. Thompson/Center Arms Co., 504 U.S. 505 (1992), which held that the Thompson Contender pistol and carbine conversion kit did not fall within the definition of a short-barreled rifle under the NFA. However, when the BATF was posed with a reverse hypothetical – starting with a rifle, converting to a pistol and then returning the firearm to a rifle, the consensus appeared to be that the firearm would indeed be classified as a short-barreled rifle (in light of the rifle to pistol conversion) subject to the NFA. TheBATF assured the audience that we can expect a ruling on this issue (2011-4) in the very near future.

The second issue raised during the panel discussion involved a deeper discussion of the definition of “engaged in the business” and the effect of the determination on a particular transaction. In general, the paraphrased legal sections pertaining to this definition discuss one who devotes time, attention and labor to some form of the industry (ie. manufacturer, dealer or importer) as a regular course of trade or business with the principal objective of livelihood and profit through the sale or distribution of firearms or ammunition. 18 USCS §921. Where one is engaged in the business, then one is required to have a federal firearms license and follow the various regulations and laws pertaining to transactions relative thereto. Much of the discussion centered on hypothetical scenarios leading this author to the conclusion that each determination is very fact specific. The BATFfocused on at least two criteria in its analysis of whether one fits under this definition. The first would appear somewhat obvious – the frequency and volume of the transaction in question. The more often one is involved in these types of transactions; the more likely it is to be found to be engaged in the business. The second criteria that made only a brief appearance in the discussion was an examination of the terms of the financial transaction at issue in the factual scenario. For instance, where a US citizen uses her own funds to purchase the NFAfirearms, then sells those firearms to a buyer in the US or overseas making a profit on the transaction, the use of her funds to purchase the firearms – thus taking possession and ownership prior to sale – clearly places the individual under the definition of “engaged in the business”. Yet, if we take that same individual who brokers a deal for the purchase and sale of firearms from Country A to someone in Country B, and the only funds received by the individual is the commission from the sale (ie. no possession or ownership of the firearms in question), then the individual may not fall within the definition.

The final issue examined by the panel was the definition of “armor piercing” ammunition and its effect on the sporting industry. Armor piercing ammunition is defined by 18 USC §921(a)(17)(B) as (i) a projectile or projectile core which may be used in a handgun and which is constructed entirely (excluding the presence of trace elements of other substances) from one or a combination of tungsten alloys, steel, iron, brass, bronze, beryllium copper, or depleted uranium; or (ii) a full jacketed projectile larger than .22 caliber designed and intended for use in a handgun and whose jacket has a weight of more than 25 percent of the total weight of the projectile. The problem arises where such a round is initially designed for use in a rifle, but then that same round becomes available for a pistol. Use or sale of the ammunition – except under very limited circumstances – is prohibited. Some states have begun prohibiting the use of lead based bullets leading to the development of new metal rounds which arguable fall within the definition of armor piercing. Again, use of these rounds by sportsman would be banned under the present state of the law. The BATF assured the audience that it will take the various concerns and comments into account as it continues to examine this issue.

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Filed under ATF, Firearms Law, Pennsylvania Firearms Law

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