Tag Archives: “international trafficking in arms regulations”

News from the 16th Annual NSSF Import/Export Conference in Washington, D.C.

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Attorney Joshua Prince and I attended the Annual NSSF Import/Export Conference in Washington, D.C. this week. There were a variety of presentations that were given on a variety of topics including: Federal Search Warrants and Regulatory Site Visits, Chemical Facility Anti-Terrorism Standards, Foreign Military Sales, ATF Panel Discussion, and Round Table Discussions (the best part in my opinion) on Day 1. On Day 2’s agenda is Prohibited and Embargoed Countries, DDTC Presentation on Information Technology, and a presentation from DDTC on Licensing and Agreements.

As most of our readers are more concerned with up-to-date statistics and information from ATF, this blog article will only address those and information learned at the Round Table Discussions.

ATF Panel

Sitting on the ATF Panel giving updates were: Marvin Richardson (Assistant Director, Enforcement Programs and Services), Curtis Gilbert (Deputy Assistant Director Enforcement Program and Services), Andrew Graham (Deputy Assistant Director Industry Operations), Earl Griffith (Chief of the Firearms Ammunition Technology Division), Alphonso Hughes (Division Chief, National Firearms Act Division), Gary Taylor (Firearms and Explosives Services Division), Andrew Lange (Division Chief of the Office of Regulatory Affairs), and Krissy Carlson (Division Chief of the Firearms and Explosives Industry Enforcement Programs and Services).

Industry Operations

Andy Graham stated that there are currently 791 Industry Operations Investigators (IOIs) not including the administrative staff. In 2018 they hope to add 48 more. There are two classes, one in February and one in July.

There are currently ~1,100 firearm importers and ~230 destructive device importers. There are about 162 active inspections occurring with regard to those licensees.

Office of Regulatory Affairs

Andrew Lange announced regulations.atf.gov, a website that had the most up to date regulations pertaining to ATF. The website is actually the first government website that I’ve perused that was functional and useful! The information is pulled directly from the Federal Register, so if ATF implements a final rule, it will automatically update.

The website features the ability to see the history of a particular regulation (so you can see the changes over time) and defined terms are hot linked so they will populate on the right hand side, meaning you can read a provision and see the definition of terms which are defined at the same time (allowing a reader to have better context or understanding). Even cooler is that it links to ruling that were issued. I’m genuinely impressed with the system. If only the eForms system worked as well.

Phase 2 is expected to be rolled out in September of this year.

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Firearms Ammunition Technology Division

Earl Griffith introduced the Firearms Ammunition Technology Division or “FATD”. They hired six more firearms enforcement officers who have now completed a significant amount of training (if I recall it was about a year to a year and a half, I didn’t write down the length of time), bringing the total to twelve. They are responsible for the evaluation of samples sent to FATD.

Currently, FATD is running about 30-90 days on most evaluations. They have currently issued about 800 marking variances which are taking about 30 days to issue. So far this year there have been about 250 product evaluations.

NFA Division

As was published in the most recent ATF FFL Newsletter, the NFA Branch has been transformed into the National Firearms Act Division, which became effective April 3, 2017. The Division will be led by Division Chief Alphonso Hughes, the previous Chief of the Firearms and Explosives Services Division. The new division, consists of two branches – the Industry Processing Branch (IPB), dealing with industry and the Government Support Branch (GSB) dealing with government related matters.

Alphonso stated that the NFA Division was going to undergo a full evaluation of the internal business processes in the first quarter of 2018. It would involve outside eyes looking in.

The former 2-3 month time period for application data entry has now been reduced to ~72 hours. For those with access to eForms…use them. eForms result in faster turnaround on approvals. While they can’t auto approve at this point, they are automating as much as possible. Form 2-3s are hovering around 10 days or under (eForms from my understanding).

41F – Everyone’s favorite topic (sarcasm if you couldn’t tell). There were ~280,000 applications received from the announcement of the final rule until it went into effect. That was about a full years worth of applications. They are on the downward slope of pre 41F paperwork.

ATF is working overtime to process these forms. They are currently working 7 days a week to reduce the wait times and are literally working overtime hours to accomplish that goal (up to 20 hours per person in addition to their standard work week).

Pre 41F, they were receiving ~35,000 forms a week and processing about 8,000 forms a week. Post 41F they were receiving about 5-6,000 form a week and processing 8-9,000 forms a week. They are currently predicting a 6-7 month turn around if you submit a form today.

In January, six additional examiners were hired. They are going to continue to push for resources in FY 2018-19.

Alphonso was also asked about the possibility of the reopening of the MG registry. He replied that it was not within the NFA division’s purview to address the issue (and he isn’t wrong. The original statutory language read “The Secretary of the Treasury, after publication in the Federal Register of his intention to do so, is authorized to establish such periods of amnesty, not to exceed ninety days in the case of any single period, and immunity from liability during any such period, as the Secretary determines will contribute to the purpose of this title.” 82 Stat. 1235, § 207(d). As ATF was transferred to DOJ, the power would now be held by the Attorney General. See 27 CFR 479.101(b)).

Firearms and Explosives Industry Enforcement Programs and Services

Last, but not least, was Krissy, who stressed eForms usage for industry. She was also asked about the possibility of the HPA passing. As you probably guessed, this is in the hands of Congress and not ATF. ATF holds no opinions on proposed legislation.

Round Tables

ATF Firearms and Explosives Industry Division 

I followed up on a question that arose last week at the NICS Retailer Event at FBI. While there, someone had asked about the new 4473 and question 12.d.2, specifically whether or not someone had to complete the question.

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The answer I received was “yes”, the form must be completed. This question has seemed to cause a lot of confusion on the new form.

There was also the question of “sex” on the 4473. Some states have now recognized a new gender. ATF has provided limited guidance, simply saying the individual has to complete the form. However, it is suggested, after discussion with ATF, if a licensee is unsure or uncomfortable with the person’s response, that they can document the transaction, etc. in the notes section of the 4473. A photocopy of the identification (a standard practice in a  lot of shops anyway) is suggested. ATF is still in the preliminary stages of looking into this issue and only provided guidance in relation to the question must be answered.

NFA Division

A common question I receive is whether or not you have to notify the NFA Branch of a change in configuration. I was informed that an individual can write a letter to ATF adding another configuration to a registered receiver. For instance, if the Form 1 or 4 is approved for a 10.5″ 5.56 gun and a person has a 8″ 300 Blackout upper, they can notify the NFA branch of the additional configuration. It was strongly encouraged that an individual do such, even if the change is temporary.

It was reported that the NFA Branch had little to no issues with the electronic fingerprint submissions. They advised that most prints they received were fine.

Lastly, for those curious about the process within the NFA Branch regarding trust applications, I was given this simplified process.

The application is received along with the payment. Payment is cashed and the data entry occurs. After the data is entered (it is kept in the order received) it is submitted to NICS for a check. Obviously the more Responsible Persons the more room for error, delays, etc. If a delay comes back on one person, the entire application is held up. This work is done by the legal assistants. By the time it hits the examiner, it is ready for approval or denial.

As I’m writing this, it I realized I forgot to ask about the disparity between approvals and postmark dates.

Firearms Ammunition Technology Division

Form 1 silencer builders have been in a constant state of argument as to what they can or can’t do. As of where we stand today, it is the opinion of FATD that a Form 1 maker CANNOT repair their silencer. They cannot replace a baffle if it is destroyed, repair a damaged endcap, or shorten the silencer. While not the answer the community wants to hear, that is the current position. Essentially, you’d have to file a new Form 1 and build a new silencer.

For those wondering about the new Autoglove, FATD has not seen a sample of that product.

If you’re thinking about building a clone of a firearm that has been approved as a non NFA firearm (ala Tac 14 or Shockwave, etc.) there is no requirement that you submit a determination request (which is true of any domestically built firearm). However, it was strongly encouraged to ensure your compliance.

 

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DDTC Issues Guidance on ITAR Registration

DDTC

On Friday July 22, 2016, the Directorate of Defense Trade Controls (“DDTC”) released a letter issuing guidance on the requirement of firearm manufacturers and gunsmiths to register with DDTC under the International Traffic in Arms Regulations (“ITAR”).

There has been constant discussion on the internet regarding whether an individual who has obtained a federal firearms license (“FFL”) is required to register for ITAR. Some of the Industry Operations Inspectors (“IOIs”) have taken it upon themselves to inform Type 07 FFLs that they must register for ITAR without any guidance from DDTC. There are certain instances where an FFL does not need to register for ITAR.

22 C.F.R. § 122.1 discusses the registration requirements for ITAR.

(a) Any person who engages in the United States in the business of manufacturing or exporting or temporarily importing defense articles, or furnishing defense services, is required to register with the Directorate of Defense Trade Controls under § 122.2. For the purpose of this subchapter, engaging in such a business requires only one occasion of manufacturing or exporting or temporarily importing a defense article or furnishing a defense service. A manufacturer who does not engage in exporting must nevertheless register.

The crux of the registration for ITAR (for most FFLs) lies within the definition of manufacturing. DDTC has not promulgated a definition for manufacturing which is the source of a lot of confusion and misinformation.

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DDTC’s letter states that individuals who “do not actually manufacture ITAR-controlled firearms (including by engaging in the activities described below, which DDTC has found in specific cases to constitute manufacturing) need not register with DDTC – even if they have an FFL from ATF.” This is because the requirements for obtaining an FFL are separate and distinct of the requirements for registering under ITAR.

As DDTC does not have a definition for the term “manufacturing”, it relies on “the ordinary, contemporary, common meaning of the term.”

DDTC’s guidance is only in relation to “domestic (U.S.) activities involving firearms (as defined in Category I(j)(1) of the United States Munitions List (USML) (22 CFR § 121.1)) and related ammunition that are .50 caliber (12.7 mm) or smaller – i.e., firearms in Category I, paragraphs (a) and (b), related items in paragraphs (e)-(h), and ammunition in Category III(a) for those firearms. Activities involving items elsewhere on the USML, including Category I, paragraphs (c) and (d), are not included in the scope of this guidance.”

DDTC has found that the following instances do not require registration.

a)  Occasional assembly of firearm parts and kits that do not require cutting, drilling, or machining;

b)  Firearm repairs involving one-for-one drop-in replacement parts that do not require any cutting, drilling, or machining for installation;

c)  Repairs involving replacement parts that do not improve the accuracy, caliber, or other aspects of firearm operation;

d)  Hydrographic paint or Cerakote application or bluing treatments for a firearm;

e)  Attachment of accessories to a completed firearm without drilling, cutting, or machining—such as attaching a scope, sling, or light to existing mounts or hooks, or attaching a flash suppressor, sound suppressor, muzzle brake, or similar item to a pre- threaded muzzle;

f)  Cosmetic additions and alterations (including engraving) that do not improve the accuracy, caliber, or other aspects of firearm operation beyond its original capabilities;

g)  Machining new dovetails or drilling and tapping new holes for the installation of sights which do not improve the accuracy or operation of the firearm beyond its original capabilities; and

h)  Manual loading or reloading of ammunition of .50 caliber or smaller.

The guidance goes on to clarify that “[a]ctivities limited to the domestic sale or resale of firearms, the occasional assembly of firearms without drilling, cutting, or machining, and/or specific gunsmithing activities that do not improve the accuracy, caliber, or operations of the firearm beyond its original capabilities (as described above) are not manufacturing within the context of the ITAR. If you are not manufacturing, exporting, temporarily importing or brokering defense articles or services, you are not required to register with DDTC.”

Which then begs the question, what does DDTC require the registration under ITAR for?

DDTC states that if you are engaged in any of the following you are required to register for under ITAR.

a)  Use of any special tooling or equipment upgrading in order to improve the capability of assembled or repaired firearms;

b)  Modifications to a firearm that change round capacity;

c)  The production of firearm parts (including, but not limited to, barrels, stocks, cylinders, breech mechanisms, triggers, silencers, or suppressors);

d)  The systemized production of ammunition, including the automated loading or reloading of ammunition;

e)  The machining or cutting of firearms, e.g., threading of muzzles or muzzle brake installation requiring machining, that results in an enhanced capability;

f)  Rechambering firearms through machining, cutting, or drilling;

g)  Chambering, cutting, or threading barrel blanks; and

h)  Blueprinting firearms by machining the barrel.

Of particular interest is the guidance that now offering barrel threading services will result in an FFL being required to register for ITAR. This will certainly put a financial burden on the smaller gunsmiths who are threading barrels as registration for ITAR is $2,250 a year.

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Additionally, the penalties for violating ITAR are significant and able to be applied retroactively. Penalties for each violation of ITAR can result in up to $1,000,000 in fines and 20 years imprisonment. 22 U.S.C. § 2778(c)

DDTC does allow for voluntary disclosures of violations.

“The Department may consider a voluntary disclosure as a mitigating factor in determining the administrative penalties, if any, that should be imposed. Failure to report a violation may result in circumstances detrimental to U.S. national security and foreign policy interests, and will be an adverse factor in determining the appropriate disposition of such violations.” 22 C.F.R. § 127.12.

Lastly, DDTC does have a mechanism for an individual or company to inquire whether the activity they are engaging in requires registration under ITAR. This is an area that myself and Attorney Joshua Prince have experience in. It is certainly advised that a determination from DDTC is sought prior to engaging in the activity (if it is unknown or questionable whether it would require registration under ITAR) in order to mitigate any potential penalties.

 

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