Industry News: V18N1

By Robert M. Hausman

Obama Bans Re-Import of U.S. Origin Firearms

The firearms industry has known for the last four years that an import ban was on the horizon, and now the first of what may be several has arrived as Obama issued an executive action banning almost all re-imports of military surplus firearms.

The move follows Obama’s largely tooth-less executive actions issued January 16th, during which the industry expected some sort of import ban, particularly on over 10-round capacity magazines to be issued. Obama takes credit for now doing “something,” as Congress has failed to pass new gun or magazine bans.

Additionally, seeking a weak spot domestically, Obama has placed new restrictions on the ability of some in acquiring National Firearms Act arms.

One big stumbling block for many unlicensed individuals to acquiring an NFA firearm has been to obtain a local chief law enforcement official’s (CLEO) signature on their federal acquisition/registration paperwork. This is a relic of the 1930s and asks the local CLEO to sign that he doesn’t know anything that would make the transfer illegal to the applicant. FFL’s can pay a Special Occupational Tax and thus avoid the need for a CLEO signature.

Seizing on the public and press confusion and lack of knowledge on the content of federal firearms law, along with ATF’s refusal to set the record straight about the on-going efforts they were involved in to end the antiquated CLEO requirement and replace it with modern checks, Obama is free to put over another con job. The White House issued its announcement that Obama has “closed a loophole to keep some of the most dangerous guns out of the wrong hands.”

“Current law places special restrictions on many of the most dangerous weapons, such as machine guns and short-barreled shotguns. These weapons must be registered, and in order to lawfully possess them, a prospective buyer must undergo a fingerprint-based background check,” the announcement correctly reads.

“However, felons, domestic abusers, and others prohibited from having guns can easily evade the required background check and gain access to machine guns or other particularly dangerous weapons by registering the weapon to a trust or corporation. At present, when the weapon is registered to a trust or corporation, no background check is run. ATF reports that last year alone, it received more than 39,000 requests for transfers of these restricted firearms to trusts or corporations.” the release reads.

However, it is unlikely that a hardened criminal is going to go through all that is required in setting up a trust or a corporation and then wait 3 to 6 months or more to acquire an outrageously expensive NFA firearm. This is political posturing at its worst, and simply impedes the transfer process.

The release continues, the “ATF is issuing a new proposed regulation to close this loophole. The proposed rule requires individuals associated with trusts or corporations that acquire these types of weapons to undergo background checks, just as these individuals would if the weapons were registered to them individually. By closing this loophole, the regulation will ensure that machine guns and other particularly dangerous weapons do not end up in the wrong hands.”

While at press time this proposed regulation had not yet been released, if trusts or corporations seeking to acquire these types of firearms must get a local CLEO signature on their paperwork, this will unnecessarily constrict civilian ownership of NFA arms in some areas, and unduly burden police departments liable for performing signature services. It is unknown at present what “background checks” actually will entail.

Import Gun Ban

When the United States provides military firearms to its allies, either as direct commercial sales or through the foreign military sales or military assistance programs, those firearms may not be imported back into the United States without U.S. government approval. Since 2005, the U.S. Government has authorized requests to re-import more than 250,000 of these firearms.

However, the Obama Administration has announced a new policy of denying requests to bring military-grade firearms back into the United States to private entities, with only a few exceptions such as for museums. The White House justifies this new policy by saying it “will help keep military-grade firearms off our streets.”

In regard to this new initiative, the F.A.I.R. Trade Group, which represents importers, noted, “Pursuant to this new policy, the State Department is denying the Korean request to retransfer M1 Garands to U.S. importers. Pay close attention to this, because the reason for denial is that M1 Garands are “military-grade” firearms.

“The White House’s careful word choice of “military grade” must not be overlooked. This is an undefined term, and as is evident with the M1 Garands, there could be no limit to what constitutes a “military-grade” firearm. Consequently, this is likely the first step in restricting importation of other firearms into the US.

This is a direct assault on the firearms import trade, collectors and enthusiasts, and it has nothing to do with curbing crime. We urge you to immediately contact your representatives in the House and the Senate and voice your opposition to this unilateral and unjustified action taken by the President.”

Background

As noted herein, this action will effectively ban the importation into the United States of all U.S.-origin curio and relic rifles. This ban will make it impossible to import historically relevant rifles such as the M1 Garand. This action reinstitutes a presumptive denial policy that was in effect during the Clinton Administration.

U.S. law generally prohibits the importation of U.S.-origin surplus military firearms. The law does, however, carve out an exception for those firearms that qualify as curios or relics. A firearm will qualify as a curio or relic if (1) it was manufactured at least 50 years earlier than the current date; (2) it was certified by the curator of a municipal, State, or Federal museum that exhibits firearms to be curios or relics of museum interest; or (3) it derives a substantial part of its monetary value because it is novel, rare, bizarre or associated with a historical figure, period, or event.

Following the enactment of the Gun Control Act of 1968 (GCA) through the early 1980s, the GCA did not permit the importation of historical military surplus firearms. In the 1980s, however, Congress enacted 18 USC § 925 (e) to permit the importation of curio or relic firearms. Despite the change in law, the Department of State continued to enforce a policy opposing the importation of U.S.-origin curios or relics. During the 1990s, the Clinton Administration continued the presumptive denial policy against the importation of U.S. origin curios or relics. Finally, in the early 2000s, an appropriations amendment passed that prohibited the use of any funds to pay expenses to deny any application what was submitted to ATF or import U.S.-origin curio or relic firearms. In 2005, during the Bush Administration, the Department of State advised ATF that it had changed its policy of presumptive denial to one of approval (which in practice has been selective approval). This announcement by the White House reverses that approval policy and reinstitutes the presumptive denial policy that plagued the importing and collecting community through 2005.

The announcement stifles the ability of licensed importers to import into the United States the M1 Garand rifles that had been approved at all levels in the Federal government for importation, but were awaiting the White House’s approval. Now we know the answer from the White House.

Double-Standard

In fact, the U.S. government, through a separate quasi-government program, known as the Civilian Marksmanship Program, is doing exactly what licensed importers are not allowed to do. How’s that for a double-standard?

Many of these firearms are obsolete, or antique, and are pieces of history that should not be treated as “crime guns.” In fact, they are not currently “military-grade” as described in the White House’s fact sheet. These guns are over 50 years old and are in no way a threat to the safety of the general public.

As stated herein, the Department of Defense already brings in large quantities of M1 Garand rifles for the Civilian Marksmanship Program, without obtaining any Department of State or ATF approval. This executive action threatens access to these firearms by the more than 60,000 federally licensed collectors, and millions of American consumers, who actively pursue these historic collectibles. Many of these individuals are World War II and Korean War veterans, for whom these firearms have significant sentimental and patriotic value. For little practical reason, this executive action would eliminate veterans’ access to these firearms.

However, a legislation fix is at hand. The Collectible Firearms Protection Act, H.R. 2247. This Act, reintroduced this year by Representative Cynthia Lummis (WY), would amend the Arms Export Control Act to permit curio and relic firearms to be imported into the United States by a licensed importer, without obtaining authorization from the Department of State or the Department of Defense.

Jones Sworn In As ATF Permanent Director

B. Todd Jones received the ceremonial oath–of–office as Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) administered by Vice President Joe Biden August 29th, at the White House. With his confirmation, Jones becomes the agency’s first permanent director in seven years.

Jones has served as the acting ATF director since being appointed to the post on August 31, 2011. While serving as the acting director of ATF, Jones was also the United States Attorney for the District of Minnesota, a post he held since August 7, 2009. Jones served as both ATF Acting Director and U.S. Attorney until his confirmation as ATF Director.

In fiscal year 2012, ATF says it recommended 17,366 defendants for prosecution resulting in 7,210 convictions but these were not necessarily all firearms cases. However, as Jones himself has confirmed, the Justice Dept. rarely prosecutes straw buyers. Of 48,321 cases involving straw buyers, the Justice Dept. prosecuted only 44 of them — saying that “hard decisions” to prosecute were made based on “limited resources.” Jones has also acknowledged that as the U.S. attorney in Minnesota, he never prosecuted anyone accused of being a straw buyer.

Also in 2012, ATF industry operations investigators conducted 13,100 federal firearms licensee inspections and 5,390 federal explosives licensee inspections.

Democrats Propose Taxing Civil Right Out of Existence

A pair of Democratic lawmakers are proposing steep new taxes on handguns and ammunition, and tying the revenues to programs aimed at preventing gun violence.

Called the “Gun Violence Prevention and Safe Communities Act,” the bill sponsored by William Pascrell, D-N.J., and Danny Davis, D-Ill., would nearly double the current 11 % tax on handguns, while raising the levy on bullets and cartridges from 11 to 50 %.

“This bill represents a major investment in the protection of our children and our communities, and reflects the long-term societal costs of gun and ammunition purchases in our country,” Pascrell said.

The two say the bill would generate $600 million per year, which would be used to fund law-enforcement and gun violence prevention, the two say as they try to mask its true purpose – confiscatory taxation.

The bill would also increase the transfer tax on all weapons covered under the National Firearms Act (which excludes most common guns) from $200 to $500 and index to inflation and increase the transfer tax for any other weapons from $5 to $100.

Davis, who represents a portion of Chicago that has been ravaged by gun violence in recent years, said money raised from the new taxes will go to good use.

“This legislation is a pro-active approach to reducing gun violence by using proven preventive programs which have been starved for funds until now,” Davis said. “As part of a comprehensive, multidimensional strategy to reduce gun violence, this legislation closes major loopholes in tax law and lays out an equitable, long term, sustainable strategy to provide the requisite resources.”

ATF Authorizes Electronic Filing of AFMER Forms – ATF Rul. 2012 – 3

ATF authorizes an alternate method or procedure to the requirement that licensees submit a form containing certain required record information. Specifically, licensed manufacturers may submit the Annual Firearms Manufacturing and Exportation Report (AFMER) ATF Form 5300.11, electronically using ATF eForms, provided all conditions set forth in this ruling are met.

The manufacturer may now obtain through the Internet, electronic copies of submitted ATF Forms 5300.11, which can be printed and preserved as documentation of compliance with the filing requirement. FFL’s can register on the ATF website (atfonline.gov) to get access to the forms.

ATF Authorizes Electronic Filing of Forms 6 – Part 1 & Form 6a ATF Rul. 2013 – 1

To register to use the eForms system, licensees must access the ATF website at atfonline.gov and obtain a unique user ID and password. Applicants may also continue to use the paper forms.

CDC Report Finding Disputes Obama’s Rhetoric

Tasked by the Obama administration “to research the causes and prevention of gun violence,” the Centers for Disease Control (CDC) delivered a report in June that has been largely ignored by the media and certainly does not advance the president’s gun-control agenda. Coming as it does from the CDC, reading that, “Almost all national survey estimates indicate that defensive gun uses by victims are at least as common as offensive uses by criminals.”

In-Person Firearms Disposition to Foreign Purchasers In Airports

ATF advises that FFL arrangements of exportation of firearms and ammunition through an in-person disposition to foreign purchasers at the airline ticket counter of international airports violates the Gun Control Act.

The typical scenario involves an FFL bringing a firearm to the airport ticket counter where the foreign purchaser is waiting to check in baggage for an out-bound flight. The firearm is then either checked in its own shipping case or inserted by the FFL or an airline employee into the foreign purchaser’s baggage. The FFL has usually obtained the required export license and approval from the U.S. Dept of State. Neither a Firearms Transaction Record, ATF Form 4473, nor a NICS check is completed by the FFL in connection with the transaction.

Delivering and disposing of a firearm to a foreign purchaser at the airport without completing an ATF Form 4473 or conducting a NICS check would violate 18 U.S.C. § 922(b)(3), (b)(5), (m), and (t), and 27 CFR. §§ 478.102, .121©, and .124(a). Because the purchaser has lawful authority and control over his/her baggage, it makes no difference whether the FFL enlists the aid of an airline employee to act as an intermediary in taking the firearm from the FFL without the foreign purchaser ever actually handling the firearm. Even after check-in, the foreign traveler may request and retrieve his or her baggage containing the firearm prior to a flight.

Circumstances may also arise preventing the purchaser from travelling, and the baggage holding the firearm would be returned to the foreign visitor. Likewise, it makes no difference whether the firearm is inserted into the purchaser’s baggage or kept in a separate container, because both would constitute baggage of the foreign purchaser.

Further, if the foreign purchaser is legally present in the U.S. on a tourist or other non-immigrant visa, the sale or disposition of the firearm and/or ammunition would be unlawful under 18 U.S.C. § 922(d)(5)(B), unless the person falls within one of the exceptions listed in 18 U.S.C. § 922(y)(2). Additionally, it is unlawful under 18 U.S.C. § 922(a)(9) for a non-licensee who does not reside in the U.S. to receive any firearms unless such receipt is for lawful sporting purposes.

Proper Procedure to Follow

However, an FFL acting as an exporter may lawfully complete an export transaction at the airport consistent with the GCA. The proper procedure would be for the FFL, consistent with the airline’s freight policy, to deliver the gun or ammo directly to the airline as freight to be sent by the FFL to the foreign purchaser. The airline would then ship or transport (i.e. export) the firearm on behalf of the FFL to the purchaser outside the U.S. Since the gun and/or ammo being sent would be under the exclusive direction and control of the FFL exporter, this procedure would not result in an unlawful disposition at the airport.

Kansas Gun Act Superseded by Federal Law

The passage of the Kansas Second Amendment Protection Act effective April 25, 2013 does not exempt Kansas licenses from fulfilling their federal obligations, notes Debra Satkowiak, chief, ATF Firearms & Explosives Industry Division.

The Act exempts personal firearms, firearms accessories, and ammunition manufactured in the state of Kansas, and that remain in Kansas, from federal regulation.

ATF maintains that federal law supersedes the Act, and accordingly all provisions of the Gun Control Act and National Firearms Act, continue to apply.

In pertinent part, federal law requires a license to engage in the firearms or ammunition manufacturing business, or to deal in firearms, and the 4473 form must be filled out, the NICS check conducted, etc., etc. even if the firearms or ammunition remain within the same state.

These requirements, as well as other federal requirements and prohibitions, continue to apply whether or not the firearms or ammunition have crossed state lines.

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. He may be reached at: FirearmsB@aol.com.