INDUSTRY NEWS: DECEMBER 2005

By Robert Hausman

ATF Grants Extension for Importation of Certain Gun Parts

Bowing to industry concerns, extra time (until the end of the year) has been granted to importers by ATF to effect the importation of frames, receiver and/or barrels of otherwise ‘un-importable’ firearms covered by Title 18 U.S.C. §925(d)(3).

As noted in this column previously, ATF had announced, in a July 13th open letter to the industry, that it had determined that section 925(d) provides “in any case where the Attorney General had not authorized the importation of the firearm pursuant to this paragraph, it shall be unlawful to import any frame, receiver, or barrel of such firearm which would be prohibited if assembled.”

ATF concluded that this language permits no exceptions that would allow frames, receivers or barrels for otherwise non-importable firearms to be imported into the U.S. Accordingly, ATF announced (in-mid July) that it would no longer approve ATF Form 6 applications for importation of any frames, receivers, or barrels for firearms that would be prohibited from importation if assembled. This announcement prompted a showing of great concern from importers, many of whom had already purchased such parts abroad and were then facing the prospect of not being able to import the parts.

ATF also interpreted the language of the regulation to mean that no exceptions, for example for “repair or replacement” of existing firearms, would be allowed. The industry took particular exception to this stance, as since 2001, ATF had allowed importation of such parts for reasons of “repair or replacement.”

Further, in the July 13, 2005 Open Letter, ATF recognized that importers relying upon ATF’s prior policy would suffer economic harm, particularly those who held approved permits. To mitigate the impact of the new policy, ATF provided that it would forego enforcement of section of section 925(d)(3) for 60 calendar days from the date of the Open Letter for those importers who had already obtained import permits for barrels and receivers for non-importable firearms for “repair or replacement.”

Following consultations with the industry and further examination of the number and types of barrels and receivers authorized for importation on approved permits, ATF, by way of an August 12, 2005 Open Letter to industry, decided to extend the period of time for importers to act upon previously approved import permits. ATF says it believes this extended period affords ample time for importers who have entered into binding contracts in reliance upon approved permits to bring their shipments into the U.S. for entry into commerce.

Thus, importers holding ATF approved permits to import frames, receivers, or barrels for otherwise non-importable firearms for repair or replacement may continue to use such permits through December 31, 2005. Effective January 1, 2006, these permits will be suspended. Importers holding unexpired approved permits will be receiving a letter notifying them that their permits will be suspended effective January 1, 2006. ATF will advise Customs and Border Protection that in no event should these permits be accepted to release these items for entry into the U.S. on or after Jan. 1, 2006.

Importers are further reminded by ATF that no new permits for these items will be issued, including the issuance of permits that would be necessary to remove frames, receivers or barrels that are currently held or may be placed in a Customs Bonded Warehouse or Foreign Trade Zone.

Importers are also advised that ATF previously approved permits for non-importable barrels and receivers are for repair or replacement only, and this restriction was stamped on the face of the permit. ATF is taking the position that importers who import such components for any purpose other than repair or replacement of existing firearms, e.g. for assembly into new firearms, will be exceeding the scope of the import authorization in violation of law. If ATF determines, through inspection or otherwise, that an importer willfully has violated the import provision of the Gun Control Act, the importer’s license is subject to revocation pursuant to 18 U.S.C. § 923(e).

The Aug. 12 Open Letter noting the time extension was signed by Walfred A. Nelson, ATF deputy assistant director, enforcement programs and services for Lewis P. Raden, assistant director, enforcement programs and services.

ATF to Open New Office in Toronto

ATF is increasing its world-wide presence as ATF’s Director, Carl J. Truscott, has announced that ATF will increase the assistance, information and intelligence sharing it offers Canadian law enforcement by opening a new office in Toronto.

ATF now has three special agents and an inspector serving in Canada, at the U.S. Embassy in Ottawa, in Toronto and in Vancouver. Their mission is to enhance cooperation between U.S. and Canadian law enforcement, and to help neutralize the illicit movement of U.S.-sourced firearms, ammunition, explosives, alcohol and tobacco.

“ATF’s presence in Canada’s largest city will provide us with the opportunity to offer expertise, assistance and cooperation to our law enforcement partners in the critical Greater Toronto Area,” Truscott said.

ATF’s Canada Country Office is one of four venues – the others are in Colombia, Mexico and with Interpol in Lyon, France – where the bureau maintains a permanent international presence.

The activities of the Canada Country Office, opened in 1994, include providing tracing for thousands of U.S.-sourced crime guns recovered in Canada, and coordinating activities relating to firearms and explosives enforcement, international trafficking activities, enforcement strategies, operational practices and specialized firearms and explosives investigative training.

ATF, Ontario’s Provincial Weapons Enforcement Unit (PWEU) and the National Weapons Enforcement Support Team (NWEST) collaborate closely on firearms tracing, and have cosponsored workshops and training programs on weapons trafficking, smuggling and investigative techniques and methods. ATF also works with the Royal Canadian Mounted Police, Canada Border Services Agency and Canada Revenue Agency to reduce the flow of contraband cigarette trafficking.

ATF is one of several U.S. law enforcement agencies that participate in the Cross-Border Crime Forum, a partnership between the United States and Canada to target cross-border criminal activity and promote information and intelligence sharing.

Native American ID’s No Good for Gun Buys

ATF advises retailers that Native American Identification Cards, which usually include the holder’s photograph, address and birth date, do not meet the identification requirements for purchasing a firearm from a licensed dealer.

ATF has determined that because such documents are not made or issued by or under the authority of the U.S. or a state or local government (within the meaning of 18 U.S.C. 10238(d)(3)), a Native American ID card cannot be utilized as identification to purchase a firearm. Since Native Americans are eligible to receive state-issued driver’s licenses or other federal, state, or local government-issued photo identification documents, this restriction does not prevent Native Americans from acquiring firearms from FFLs.

State Dept. Takes Nearly 11 Years to Notify ATF of Policy Change

The issue of lack of communication between federal agencies enforcing firearms regulations has reached a critical state. No where is this better illustrated then in the following which details two State Department policy changes which took eleven years to be communicated to the Bureau of ATF.

On August 17, 1994 the U.S. Department of State rescinded the sanctions on trade in defense articles and services from South Africa. However, State did not inform ATF of its policy change until March 17, 2005 – nearly 11 years later!

Since it was finally informed of State’s action, ATF has issued an Open Letter to industry dated July 11, 2005 detailing the policy changes.

In addition to rescinding the sanctions on trade in defense articles from South Africa, State also rescinded the ban on technical data relating to defense articles from South Africa as set forth in Category XXII of the U.S. Munitions Import List, 27 CFR Section 447.21. Accordingly, the State Dept. requested that the Attorney General approve import applications for such items that otherwise meet the importation requirements. As a result, ATF will now approve such applications. ATF will also start the process of amending 27 CFR 447.21 to remove Category XXII.

Also on March 17, 2005, the Dept. of State informed ATF that effective July 14, 1994, again nearly 11 years prior, it had fully rescinded the statutory debarment against the Armaments Corporation of South Africa Ltd. (Armscor), the Denel Group (Pty) Ltd. (Denel), and Fuchs Electronics (Fuchs), and their divisions, subsidiaries, associated companies and affiliated persons and successor entities. Accordingly, the Dept. of State requested that the Attorney General approve import applications for such items that otherwise meet the importation requirements. Thus, ATF will now approve such applications.

Philip Warren 73

Philip Warren, president of Century International Arms since September 1996, died Monday, July 25, at the age of 73 from lung cancer.

A board member of the F.A.I.R. Trade Group, Warren was credited with keeping that organization steered on a path of professionalism in dealing with the government and representing the import/export community fairly.

Born October 21, 1929, Warren served his country as a jet fighter pilot during the Korean conflict. Warren was active in the international community for many years and in 1975 King Baudouin of Belgium awarded him the “Chevalier de L’Orde de la Couronne.” Warren spent part of his career in the banking industry. In 1958 he founded Paragon Steel Corp. in Detroit, Michigan. In 1989, he was named chairman of Future Metals Corp. of Ft. Lauderdale, FL. In the early 1970’s he was a partner in the Detroit Pistons basketball team.

The F.A.I.R. Trade Group will name an award after Warren which will be presented on an infrequent basis to recipients who show particular merit, integrity and business acumen

New Gun Travel Rules in the Netherlands

Members of industry who might be traveling with firearms through the Netherlands should be aware that new regulations are in effect.

The new rules require all passengers transiting through the Netherlands with firearms to obtain a special consent form issued by the Customs office in Groningen (in advance of travel) or face having their guns confiscated.

The Royal Netherlands Embassy in Washington, DC, has confirmed that this new form is required to avoid denied transportation at check-in and/or confiscation of the arms in Amsterdam. Check-in agents for KLM Royal Dutch Airlines and their American partner, Northwest Airlines, have been advised of the new ruling and will be requesting the approval form at check-in. This consent form is required even if you are not flying aboard Northwest or KLM but are merely transiting through the Netherlands. Thus, those traveling with firearms are well-advised to book their itineraries to avoid making a stop in the Netherlands.

Bush Names Bolton to U.N. Post

President Bush has sidestepped the Senate and installed embattled nominee John Bolton as U.S. ambassador to the United Nations, ending a five-month impasse with Democrats who accused Bolton of abusing subordinates and twisting intelligence to fit his conservative ideology.

“This post is too important to leave vacant any longer, especially during a war and a vital debate about UN reform,’’ Bush said. He added Bolton had his complete confidence.

Bush put Bolton on the job in a recess appointment – an avenue available to the president when the Congress is in recess. Under the Constitution, a recess appointment during the lawmakers’ August break would last until the next session of Congress, which begins in January 2007.

Bolton joined Bush and Secretary of State Condoleezza Rice at the announcement ceremony and said he was honored and humbled by the president’s appointment. “It will be a distinct privilege to be an advocate for America’s values and interests at the U.N. and, in the words of the U.N. charter, to help maintain international peace and security,’’ he said.

Bush said that Bolton’s nomination had been supported by a majority of the Senate but that ‘’partisan delaying tactics by a handful of senators’’ had denied the nominee the job. Bush had refused to give up on Bolton even though the Senate had voted twice to sustain a filibuster against his nominee. Democrats and some Republicans had raised questions about Bolton’s fitness for the job, particularly in view of his criticism of the United Nations.

The Bolton appointment is particularly important to firearms importers and exporters, as Bolton has been a strong advocate of protecting American’s firearms rights.

Addressing the UN Conference on Small Arms, on July 9, 2001, Bolton said, “The United States will not join consensus on a final document that contains measures contrary to our constitutional right to keep and bear arms…We do not support measures that would constrain legal trade and legal manufacturing of small arms and light weapons. The vast majority of arms transfers in the world are routine and not problematic.”

Small Gunsmiths Are Excise Tax Exempt

Small gunsmiths (defined as those who produce fewer than 50 firearms) are now exempt from excise taxes in the U.S.

During the same week that the U.S. Senate passed S.397 (the Protection of Lawful Commerce in Arms Act), the National Rifle Association’s Institute for Legislative Action helped win an important but less-publicized victory for small custom gunsmiths.

A massive highway construction bill (that President Bush promptly signed into law) contained an amendment that exempts manufacturers of fewer than 50 firearms from “manufacturing” excise taxes.

For nearly 30 years, under a baffling web of Internal Revenue Service regulations, the Bureau of Alcohol, Tobacco, Firearms & Explosives collected these “manufacturing” taxes from gunsmiths (including years’ worth of back taxes, in some cases), even if they were only modifying firearms that had been made elsewhere in a large gun factory where the excises taxes had already been paid at the original time of manufacture.

Senator Max Baucus (D-MT) is credited with championing this issue for many years. Senate Finance Committee Chairman Chuck Grassley (R-IA) gave critical support to this measure to help its ultimate passage into law.

The author publishes two of the small arms industry’s most widely read trade newsletters, The International Firearms Trade, which covers the world firearms scene, and The New Firearms Business which covers the domestic market. He also offers FFL-mailing lists to firms interested in direct marketing efforts to the industry. He may be reached at: FirearmsB@aol.com