INDUSTRY NEWS: V16N2

By Robert M. Hausman

CBS News: ‘Fast & Furious’ Was to Be Used for Added Gun Laws

According to CBS News, officials at the Bureau of ATF “discussed using their covert operation, Fast and Furious, to argue for controversial new rules about gun sales in the Southeastern border states. In particular, certain officials wanted guns to fall into Mexican drug cartels’ hands and be traced back to gun dealers in the U.S. to make a case for requiring dealers to report individuals who buy more than one detachable-magazine semiautomatic rifle over .22 caliber in a five-day period, the NRA reports.

According to CBS News, “e-mails show they discussed using the sales, including sales encouraged by ATF, to justify a new gun regulation called Demand Letter 3. That would require southwestern gun shops in the U.S. to report the sales of multiple rifles or ‘long guns.’”

CBS News singled out a July 14, 2010 e-mail sent by ATF Field Operations Assistant Director Mark Chait to Bill Newell, the agency’s Special Agent-in-Charge in Phoenix, from which Fast and Furious was based. In the e-mail, Chait asked Newell to “see if these guns were all purchased from the same (licensed gun dealer) and at one time. We are looking at anecdotal cases to support a demand letter on long gun multiple sales.”

Another means by which Mexico’s drug cartels have acquired firearms is by diversion from legal sales. Apparently, hundreds of firearms sent to Mexico by U.S. firearms manufacturers, through direct commercial sales approved by the U.S. State Dept. since 2006, cannot be accounted for by Mexican officials and are presumed to have made their way to the cartels.

CBS News reports, the Mexican military recently reported nearly nine thousand police weapons missing. Yet, the U.S. has approved the sale of more guns to Mexico than ever. The government of Mexico now buys more U.S.-made firearms than Iraq, whose security forces American and allied troops trained from the ground up, after the fall of Saddam Hussein.

Providing some insight into the scope of the problem, after one U.S.-made rifle sold to the Mexican military ended up in a cartel arms cache, the State Dept. asked Mexico to account for 1,030 more rifles, but received no reply.

Between 2006 and 2009, some 2,400 firearms were sold to Mexico through direct sales. But, apparently trying to avoid further embarrassment, the State Dept. refuses to provide the numbers for 2010 and 2011.

ATF Open Letter to All FFLs

Since 1998, the Gun Control Act (GCA) has prohibited certain nonimmigrant aliens from receiving or possessing firearms or ammunition that have a connection to interstate commerce. (See 18 U.S.C. § 922(g)(5)(B)). In a regulation published on February 5, 2002, ATF interpreted this restriction to apply to all aliens present in the United States in a nonimmigrant classification as defined by section 101(a)(15) of the Immigration and Nationality Act (8 U.S.C. § 1101(a)(15), unless they qualified for one of the exceptions contained in 18 U.S.C. § 922(y)(2). (See 27 C.F.R. § 478.11). ATF’s Firearms Transaction Record Part 1 – Over-the-Counter (Form 4473) reflects this interpretation of the GCA.

Recently, the Office of Legal Counsel (OLC), U.S. Department of Justice, has informed ATF that its interpretation of the scope of persons prohibited by section 922(g)(5)(B) is overly broad. That is, OLC determined that the prohibition contained in section 922(g)(5)(B) does not extend to all nonimmigrant aliens present in the United States, but only extends to aliens who were admitted to the United States under a nonimmigrant visa. Some nonimmigrant aliens, including most Canadian visitors, as well as aliens admitted under the Visa Waiver program, are allowed to be present in the United States without a nonimmigrant visa. Those aliens, and others who are lawfully in the country without a visa, are not within the scope of the GCA prohibition. This interpretation of the scope of persons prohibited by section 922(g)(5)(B) extends to the scope of transfers of firearms by sellers (including Federal firearms licensees) under 922(d)(5)(B).

ATF is in the process of amending its regulations and forms to conform with OLC’s determination concerning the proper scope of the GCA. ATF anticipates that this process will be completed as expeditiously as possible. Until that process is complete, however, the current regulations have the force of law. Accordingly, Federal firearms licensees should continue to use the current forms and abide by the current regulations.

Holiday Gun Sales Up

Holiday gun sales set records at the end of 2011. Industry watchers say the spike is due in part to better marketing by gun shop owners jumping on the Black Friday and Cyber Monday marketing bandwagon In November, licensed gun dealers requested 1.53 million federal background checks for prospective gun buyers, breaking the record for the month set in 2008.

According to FBI data, the number of such checks done on this year’s Black Friday, the traditional kick-off of the holiday shopping frenzy, went from the previous high in 2008 of 97,848 to 129,166 – a whopping 32 percent increase.

Killings Prompt Swiss to Tighten Gun Laws

Several recent killings have led Switzerland’s Security Policy Committee to take steps to remove weapons from the hands of people with a history of violence.

The parliamentary committee said confiscating firearms was a matter of urgency for individuals known to have made threats or perpetrated acts of violence. To help avoid further tragedies, a unanimous committee called on the National Assembly to pass a motion requiring the Federal Council to combat unwanted arms possession in cooperation with the cantons.

In its proposal, the committee calls for the police and prosecuting authorities to confiscate all civilian and military weapons held by violent individuals. Moreover, the committee says that military and judicial authorities should collaborate more effectively both at the cantonal and federal levels. “The different authorities involved won’t move things forward by mutually abdicating their responsibilities or trying to justify themselves regarding the misuse [of weapons],” the commission said. Military weapons have been used in the fatal shootings of two people in western Switzerland since the beginning of the month, news service ATS reports.

On November 4th, a man shot his 21-year-old girlfriend with his assault rifle in Saint Léonard, in the south of the country. The alleged murderer, a 23-year-old man, had several previous convictions for threatening behaviour and property damage. A week later, a 37-year-old man died from injuries sustained in a shooting incident at a Geneva shopping center. On Sunday, November 13th, a young woman in Boudry killed a 23-year-old man with a military gun which she had believed to be a toy gun.

There are around 2.5 million firearms in private hands in Switzerland, giving the country the highest per-capita rate of gun ownership in Europe. It is estimated that about 30% of Swiss households keep revolvers, shotguns and even assault rifles in their cabinets. A heated debate has raged for years in Switzerland about firearm control and the appropriateness of militiamen keeping weapons at home during military service. A referendum in February 2011 resulted in a rejection of proposals to change the current laws.

Arms & Hunting 2011 – Moscow, Russia

The 2011 Russian trade show “Arms & Hunting” held in Moscow from Oct. 14 through 17 at the Gostiny Dvor Exhibition Centre attracted more than 21,000 visitors.

The exhibition on 4,600 sq meters featured one of its highest exhibitor numbers ever at 235. International pavilions for manufacturers from Germany, Italy, Belgium, the U.S. and the Czech Republic were organized by MAPIPO – the International Association of Owners, Manufacturers and Sellers of Arms. Many top brands were represented at the show, including Winchester, Blaser, Carl Walther, Fausti, Benelli and many more.

AK-47s as Jewelry

When Cara Buono arrived at the Emmy Awards in September, nominated as best guest actress in a drama series for her role as Dr. Faye Miller in “Mad Men,” she wore a $150,000 political statement in her lobes. “These earrings,” she said, “are made from AK-47 gun metal.”

On a visit to Kenya in 2008, Thum, a leader in humanitarian efforts like Ethos Water, which finances water projects in underdeveloped countries, was struck by the profusion of AK-47s. An estimated 20 million of them are circulating in Africa, according to Thum, citing Small Arms Survey reports and data.

“We saw the AK-47 as an opportunity because it’s such a successful design,” he said. “It’s something that’s globally recognizable. What better way to turn things around than with this object, which represents so many things ugly, and turn it into something beautiful?”

Sales of the jewelry go to the Fonderie 47 Foundation, a tax-exempt nonprofit organization (fonderie47.com). It finances nongovernmental organizations, like the Mines Advisory Group, which are contracted by Congo’s government to destroy the weapons.

Smith & Wesson Still Strong

On the financial side, Smith & Wesson reports net sales from continuing operations for its second fiscal quarter were $92.3 million, up 10.5% from the year-ago quarter. Strength was seen in sales of nearly all firearms products, offset by a decline in hunting products.

Gross profit was $24.6 million, or 26.7% of sales, compared with gross profit of $25.4 million , or 30.4% of sales for the year-ago quarter, reflecting the costs of a Thompson/Center product recall as well as direct costs and the efficiency impact associated with the consolidation of the Thompson/Center business to Springfield, Mass.

At the end of the quarter, firearm backlog was $149.9 million, which was $117.5 million higher than at the end of the second quarter last year and $1.1 million higher than the most recent sequential quarter.

The author publishes two of the small arms industry’s most widely read trade newsletters. The International Firearms Trade covers the world firearms scene, and The New Firearms Business covers the domestic market. Visit www.FirearmsGroup.com. He may be reached at: FirearmsB@aol.com.