ATF-41P Update

Recently, ATF-41P’s final action date was changed from December 2015 to January 2016, prompting a lot of speculation and concern, especially in light of President Obama’s announcement of 2,224 new proposed rules, which he hopes to implement prior to his departure.

As many of our viewers are aware, Firearms Industry Consulting Group® (FICG®), a division of Prince Law Offices, P.C., spearheaded the opposition to ATF-41P, submitting a 500+ page initial comment, a 60+ page supplemental comment, starting the Facebook Group – Americans Opposed to ATF-41P and promoting the NFA Day of Reckoning. As we reported in August from the Annual Import/Export conference, ATF added three additional people to review the comments submitted regarding ATF-41P but had no idea on an expected completion date.

So, what does the date change signify? Quite honestly, not a lot other than 1. ATF does not believe that it will be prepared to move forward with a final rule in December 2015 and 2. that it also doesn’t anticipate that it will take it will take six months or longer, until it will be prepared to move forward with a final rule. In the past, ATF was extending the final action date in 6 month increments. This is the first, sub-six month increment, signifying that it is nearing the end of its review of the 9500+ comments and has likely started drafting a final proposed rule, wherein it is legally required to respond to all the issues raised in the comments, even an issue that was only raised by one commentor.

In reality, the final action date means little, as ATF could move forward with a final rule prior to the end of this year or ATF could once again delay the final action date; however, if it is delayed further, it will likely be delayed in one month increments.

As a result of the update to the final action date, which we posted on the FICG and Americans Opposed to ATF-41p Facebook pages, a lot of people have raised concern and confusion over what this means, especially in relation to any future transfers. Unfortunately, without knowing what the final rule will say, it is difficult to advise on the uncertainty. However, here is what we do know:

1. The Agency Contact, Brenda Friend Esq., previously told Attorney Merting that the rule would not be retroactive and would only apply to new transactions.
2. During the 12th Annual Import/Export Conference, I asked ATF how pending transfers would be treated, if a new rule was implemented. ATF responded that any new regulation would only apply to applications submitted after the effective date of the regulation. Attorney Merting confirmed that this was consistent with what Attorney Friend told him.

Hence, all information currently suggests that if your application is pending at the time any new regulation goes into effect, your application will be grandfathered, as it complied with the regulations, when it was submitted. Obviously, everyone will want to know what constitutes pending (e.g. mailing, receipt or cashing of one’s check). Again, unfortunately, we don’t know; however, there are pretty good arguments that it should be triggered upon ATF’s receipt. For this reason, if you’re planning to file a Form 1, you may want to do such electronically through the eForms system and as soon as possible.

Also, a lot of people are asking whether the execution of your trust, LLC or other fictitious entity plays any role in the determination. The answer, generally speaking, is no. The applicability of any new regulation will hinge on the date of submission (and what constitutes pending) of a new application. Hence, the fact that you’ve previously submitted applications utilizing your trust or other fictitious entity is of no relevance. (Also, some people believe that they can or are required to file their trust with ATF in advance of filing an application. This is incorrect as there is no mechanism (and it would serve no purpose) to file a copy of one’s trust or other fictitious entity with ATF prior to submission of a Form 1 or Form 4).

Hence, based on the information currently available, if you have not yet formed your trust or other fictitious entity, it will likely be in your best interest to form that entity now and submit your application(s), as it appears that any application submitted prior to the effective date of the regulation will be grandfathered. I have a number of clients that have formed their trusts and submitted their applications for all the NFA toys they could ever want, so that even if ATF-41P is implemented, it will likely have no applicability to them.

Nevertheless, we are asking everyone to contact their U.S. Senator and demand that they approve, without amendment, H.R. 2578 – Commerce, Justice, Science, and Related Agencies Appropriations Act, 2016, which includes a provision prohibiting the ATF from utilizing any of the appropriated money for implementing a rule requiring a Chief Law Enforcement Officer signature(e.g. ATF-41P) and additionally includes a provision providing for the funding of federal firearms relief, which has not been available since 1992.

If some form of final rule is promulgated from ATF-41P, funding will need to be raised to fight its implementation. We have detailed a number of ATF’s violations in this rulemaking in our original and supplemental comments, and in a number of articles, including whether ATF violated the Regulatory Flexibility Act, whether ATF unlawfully disqualified comments and ATF disqualified 1,000+ comments, and whether ATF provided an adequate comment period.

I hope you will consider supporting us in fighting ATF, if any final regulation is implemented, as only together can we hold ATF accountable.