Industry News: V3N3

By Robert M. Hausman

Guidelines For NFA Transfers In Decedents’ Estates

Since licensed dealers are often involved in assisting executors in disposing of National Firearms Act (NFA) firearms (i.e. machine guns and destructive devices), the Bureau of Alcohol, Tobacco & Firearms (ATF) has issued guidelines to help dealers in these situations.

While the registration information ATF maintains on such firearms is classified as tax data and thus severely restricted on who it may be released to, the agency can provide such information to the executor of an estate. So, if there is any question regarding the registration status of the firearms in the estate for which a dealer is assisting the executor, the executor can contact ATF directly for the information.

If there are unregistered NFA firearms in the estate, such firearms are considered contraband and cannot be registered by the estate. The executor should contact the local ATF office to arrange for abandonment of the unregistered firearms.

For registered NFA firearms in the estate, the executor should take action as soon as possible to arrange for the proper re-registration of the firearms. Possession of an NFA firearm not registered to the possessor is a violation of federal law and the firearm is subject to seizure and forfeiture. ATF allows the executor a “reasonable time” to arrange for the transfer of the registered firearms in a decedent’s estate. This generally should be done before probate is closed.

It is the responsibility of the executor of the estate to maintain custody and control of the firearms and to transfer the firearms registered to the decedent. The firearms may not be provided to another party, such as a licensed dealer for consignment sale. Such an action would constitute a “transfer” under federal law, requiring the filing of federal paperwork and the payment of a transfer tax. The dealer may, however, assist the executor by identifying purchasers and acting as a broker.

The firearms may be transferred on a tax-exempt basis to any beneficiary (heir) of the estate. To do this, the executor would apply on ATF Form 5, Application for Tax- Exempt Transfer and Registration of a Firearm, for a tax-exempt transfer to a lawful heir. A beneficiary for this purpose is anyone named in the decedent’s will or, in the absence of a will, anyone entitled to inherit under the laws of the state in which the decedent last resided.

NFA firearms may be transferred directly interstate to a beneficiary of the estate. When a firearm is being transferred to an individual heir, his or her fingerprints on FBI Forms FD-258 must accompany the transfer application. However, if any federal, state or local law prohibits the heir from receiving or possessing the firearm, ATF will not approve the application.

ATF Form 4 is used to apply for the tax paid transfer of a serviceable NFA firearm to a person outside the estate (not a beneficiary). ATF Form 5 (mentioned above) is also used to apply for the tax-exempt transfer of an unserviceable NFA firearm to a person outside the estate. As noted previously, all requirements, such as fingerprint cards for transfers to individuals and compliance with state or local law, must be met before an application can be approved.

If an NFA firearm in the estate was imported for use as a “sales sample,” this restriction on the firearm’s possession remains. The NFA firearm may only be transferred to a federal firearms licensee who has paid the special (occupational) tax to deal in NFA firearms, or to a government agency.

For more information, contact: Bureau of Alcohol, Tobacco & Firearms, National Firearms Act Branch, 650 Massachusetts Ave., NW, Washington, DC 20226. Telephone: (202) 927-8330.

Shotgun Registration Holdouts

Apparently there are still owners of revolver cylinder and one type of semi-auto shotgun that are not aware these firearms must be federally registered. ATF Rulings 94-1 and 94-2 classified three shotguns as destructive devices pursuant to 26 USC, Chapter 53, the National Firearms Act (NFA), on March 1, 1994. These shotguns are the USAS-12, Striker-12, and the Streetsweeper.

The NFA requires registration of certain types of firearms, such as machine guns, sawed-off rifles and shotguns, and destructive devices. The NFA defines destructive devices to include shotguns with a bore of more than one-half inch in diameter which are not generally recognized as particularly suitable for or readily adaptable to sporting purposes. ATF has determined these shotguns fall within this definition.

Classifying these guns as destructive devices under the NFA requires the current possessor to file an ATF Form 1, fingerprint cards, and a current photograph to effect the registration of the firearm. It is not necessary to complete the law enforcement certification on the reverse side of the form. The initial registration is tax-exempt. Any subsequent transfer must be approved in advance and would result in transfer tax liability of $200.

The possessor must register the gun as soon as possible after learning of the registration requirement, e.g., within thirty days. Firearms not registered within the allowable time frame are subject to seizure and forfeiture, and the possessor is subject to a criminal fine of up to $250,000 or up to 10 years in prison, or both. Any questions regarding these shotguns should be directed to ATF’s NFA branch at the telephone number and address provided above.

Company News

The hottest set-up for carry handle AR-15/M-16s is SSK Industries’ T’ SOB red dot sight. The product mounts between the iron sights and can be used over the peep sight. The iron sights can still be used by sighting through the sight tube while the dot sight is turned off. When sighted in one to two inches above the top of the 4-minute dot at 100 yards, the bullet strikes at the bottom of the dot at 300-400 yards. To install, the carry handle must be cut by a qualified machinist.

Sierra has unveiled a new 77-grain MatchKing bullet. Over the last five years, AR-15/M16A2 rifles have come to dominate the service rifle category of HighPower rifle competition. In response to requests for a magazine length bullet of higher ballistic coefficient for this type of shooting, Sierra offers this latest Matchking manufactured with a small meplat, elongated boattail and an ogive compatible with the magazine feed requirements. With a ballistic coefficient of .372, the new bullet is designed to give long-range, wind-bucking ability for the 300 yard line, and even for the longer range Infantry Trophy match. A 1×7 inch or 1×8 inch twist is required in the rifle used with this bullet.

ArmaLite Inc.’s July production levels of AR-15 type rifles were substantially below planned levels due to continued late vendor deliveries. With supplies of parts tight throughout the industry, ArmaLite’s supplies on hand at the beginning of August were substantially above July’s levels and a stronger shipping record was anticipated. The armsmaker reports it has reviewed vendor capacities and has reduced its 1999 production plan until new suppliers can be added during the fourth quarter of the year.

With orders continuing to pour into the factory, April, 2000 delivery dates are currently being quoted for new orders. Capacity is being added to production lines but prices for some key components have risen and the production capacity increases are resulting in the incurring of expenses that must be covered by the end of the first quarter of the year 2000. Increased gun prices are a likely result of the supplier and production problems.

Michaels of Oregon, the world’s largest manufacturer of nylon holsters, has
introduced Duty Suspenders, designed for both uniformed officers and special units. The black nylon web suspenders join the extensive selection of SIDEKICK PROFESSIONAL duty gear currently offered for law enforcement and security officers.

The 1-1/4 inch wide straps transfer the weight of a duty rig from the hips to the shoulders for greater long-term comfort and, in tactical situations, for greater load-bearing capabilities. An innovative breakaway snap design helps defeat attempts at snatching or grabbing, while the fully adjustable front and rear hardware, coupled with a unique cross piece in the back allow the user to tailor the suspenders to fit any situation.

Other News

In the not too distant future, it may be possible for law enforcement officers to ride down the street in a vehicle equipped with a device able to detect firearms and explosives within buildings in three-dimensional real-time video.

Sound far fetched? InVision Technologies, Inc. of Newark, California has announced its wholly-owned subsidiary, Quantum Magnetics, has received three research grants totaling $1.05 million to develop a new passive magnetic sensor technology capable of detecting the presence of metallic objects, locating their positions in three dimensions, and tracking their movements in real time.

Under these contracts, Quantum will develop prototype systems to detect and track concealed weapons, locate underground structures such as bunkers and hidden arms emplacements, and to detect buried mines and unexploded ordnance. Future commercial applications of the sensors and software may include passive detection of guns in public places such as banks, airports and train stations.

An Arlington, Virginia gun owner has successfully challenged a local police chief’s policy requiring a home inspection for county residents who want to obtain a permit to own fully-automatic firearms. Chief Edward Flynn instituted the home inspection policy to ensure county residents who apply for the transfer of Class 3 firearms have a safe and secure place to keep their arms.

Jim Kadison, a member of the Virginia Citizens Defense League, a state gun rights group, intentionally challenged the policy by purchasing a submachine gun and refusing to allow Arlington police to inspect his home as required by Flynn. Kadison asserted Flynn had no statutory authority to enact the policy. Kadison wrote of his concerns to the Bureau of Alcohol, Tobacco & Firearms and reportedly got the purchase approved without Flynn’s signature. “The very idea that this was an excuse to enter a home without a warrant infuriated me,” Kadison was quoted in the local press as saying.

Polish authorities have exposed a smuggling operation responsible for illegally shipping nearly US $6 million worth of light weapons and ammunition, some to countries under United Nations arms embargoes. Five former and current directors of two Warsaw- based arms export companies were arrested in connection with the case and sources say the case is only the tip of the iceberg.

The case raises questions about the ties between the accused companies and Polish officials. Cenzin, a state-run arms trading company, owns 80 percent of Cenrex, a major arms exporter and the largest of the Polish companies involved in the illegal deals. Steo, the other company implicated in the scandal, belongs to a private owner. A Polish newspaper reported Steo has links to Polish intelligence.

The illegal activities are reported as growing out of legal transfers of surplus Polish stocks to Lithuania, Latvia and Estonia in the early 1990s. Some arms intended for the newly independent Baltic states were diverted by middlemen and never reached their intended destinations. In Poland, Cenrex and Steo filed the appropriate paperwork and secured official approval to transfer the weapons to a Latvian company. While an official in the Latvian Ministry of Defense confirmed receipt of the shipments, the arm never in fact reached Latvia. Instead, while at sea, the arms were off-loaded to other vessels and transported to Somalia and Croatia, both subject to UN arms embargoes at the time, while others were shipped to the Sudan.

From 1992 to 1994, Cenrex allegedly exported 1,000 AK-47 rifles, 14,000 TT handguns, 160 grenade launchers, 100 Taurus revolvers, and millions of rounds of ammunition. During 1995 and 1996, the Steo company allegedly smuggled 2,000 rifles, 10,000 TT handguns, and one million rounds of ammunition through Latvia into Estonia. From there, the arms were reportedly sold on the black market to mafia-type groups. Some of the handguns have since been recovered in Russia, Germany, Poland and Japan.

Authorities were first alerted to the trafficking in May 1996, when two men who claimed to be transporting food were stopped at a border crossing between Estonia and Latvia. They were arrested after border officials discovered their Volvo van in fact contained 1,600 handguns.