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INDUSTRY NEWS: ATF PUBLISHES NFA HANDBOOK

SAR Staff by SAR Staff
August 2, 2022
in Articles, Articles by Issue, Search by Issue, V11N1 (Oct 2007), Volume 11
INDUSTRY NEWS: ATF PUBLISHES NFA HANDBOOK
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By Robert M. Hausman

A comprehensive reference on the National Firearms Act of 1934 has been published by the Bureau of Alcohol, Tobacco, Firearms & Explosives – the ATF National Firearms Act Handbook.

Of interest to those in the business of importing, manufacturing and dealing in firearms defined by the National Firearms Act or persons intending to go into an NFA firearms business, the nearly 200-page handbook is the product of a joint effort between ATF and the National Firearms Act Trade and Collectors Association (NFATCA).

The handbook’s fifteen chapters are intended as a user-friendly reference enabling the user to quickly find answers to questions concerning the NFA. It should also be useful to attorneys seeking information about the NFA and how the law has been interpreted by ATF. Although the principal focus is the NFA, the handbook necessarily covers provisions of the Gun Control Act of 1968 and the Arms Export Control Act as these bodies of legislation impact NFA firearms businesses and collectors.

Contents

The introductory chapter includes a history of the NFA and explains how Title II of the Gun Control Act of 1968 cured a constitutional flaw in the NFA.

As structured in 1934, the NFA imposed a duty on persons transferring NFA firearms, as well as mere possessors of unregistered firearms, to register them with the Secretary of the Treasury. If the possessor of an unregistered firearm applied to register the firearm as required by the NFA, the Treasury Department could supply information to state authorities about the registrant’s possession of the firearm. State authorities could then use the information to prosecute the person whose possession violated state laws. For these reasons, the U.S. Supreme Court in 1968 held in the Haynes case (Haynes v. U.S., 390 U.S. 85) that a person prosecuted for possessing an unregistered NFA firearm had a valid defense to the prosecution – the registration requirement imposed on the possessor of an unregistered firearm violated the possessor’s privilege from self-incrimination under the Fifth Amendment of the U.S. Constitution. The Haynes decision thus made the 1934 Act virtually unenforceable.

Title II of the Gun Control Act of 1968 amended the NFA to cure the constitutional flaw pointed out in Haynes. It did so by first removing the requirement for possessors of unregistered firearms. Under the amended law, there is no mechanism for a possessor to register an unregistered NFA firearm already possessed by the person.

Second, a provision was added to the law prohibiting the use of any information from an NFA application or registration as evidence against the person in a criminal proceeding with respect to a violation of law occurring prior to or concurrently with the filing of the application or registration (26 U.S.C. Section 5848). In 1971, the Supreme Court reexamined the NFA in the Freed case and found that the 1968 amendments cured the constitutional defect in the original NFA (U.S. v. Freed, 401 U.S. 601). Title II also amended the NFA definitions of “firearm” by adding “destructive devices” and expanding the definition of “machine gun.”

  • The introductory chapter also mentions that the Firearms Owners’ Protection Act of 1986 amended the NFA definition of “silencer” by adding combinations of parts for silencers and any part intended for use in the assembly or fabrication of a silencer. As most SAR readers know, the 1986 Act also amended the 1968 Gun Control Act to prohibit the transfer or possession of machine guns (18 U.S.C. Section 922(o)). Exceptions were made for transfers of machine guns to, or possession of machine guns by, government agencies, and those lawfully possessed before the effective date of the prohibition, May 19, 1986.
  • An explanation of What Constitutes “Firearms” under the NFA are detailed in Chapter 2, the types of shotguns, rifles, weapons made from a rifle or shotgun, Any Other Weapon, machine gun, silencer, destructive device, explosive device, large caliber weapon, and Curios and Relics. Also covered are applications to remove firearms from the scope of the NFA as collector’s items or by modification/elimination of components.
  • Chapter 3 delves into the Registration of NFA Firearms and explains the National Firearms Registration and Transfer Record, including registration by state and local agencies, registration by makers, importers, and manufacturers as well as registration to transferees. Also covered is how to determine the registration status of an NFA firearm, lost or stolen registration documents, and correcting incorrect registration documents.
  • The Taxes Imposed by the NFA are the subject of Chapter 4 to include making, transfer and special (occupational) taxes, exemption from tax, and the exportation of firearms.
  • Chapter 5 details Qualifying to do Business in NFA Firearms including license fees, standards, registration by firearms manufacturers and exporters with the U.S. Dept. of State, etc.
  • Chapter 6 covers the Making of NFA firearms by Non-Licensees and explains the preparation of ATF Form 1 and other subjects, including the reactivation of a registered unserviceable NFA firearm.
  • The Manufacturing of NFA Firearms is the subject of Chapter 7 to include qualifying for a license, engaging in business in multiple locations, makers of destructive devices, registration exemption for fabricating articles for research and development, and the ATF firearm classification process.
  • Chapter 8 goes into Importing NFA Firearms and explains the necessary licensing, payment of special (occupational) taxes, importation for use as a model by a registered manufacturer, importation as a sales sample, and marking requirements.
  • The Transfer of NFA Firearms is explained in Chapter 9 to include the forms used for transfers, as well as transfer of silencers for repair, distribution of estate firearms, manufacturers’ use of contractors to perform work on firearms, etc.
  • Chapter 10 covers Collectors of NFA Firearms Curios & Relics, transfers, acquisition and dispositions, etc.
  • The Exportation of NFA Firearms is the subject of Chapter 11 to include the Arms Export Control Act, firearms and firearm component parts subject to the AECA, license requirements for permanent and temporary exports of defense articles, etc.
  • Chapter 12 covers Recordkeeping including the manner in which registration documents must be kept, custody of NFA firearms by employees of FFLs/SOTs, etc.
  • The Required Reports and Notifications to ATF for NFA businesses are covered in Chapter 13.
  • Chapter 14 details the procedures that must be followed when Going-Out-of-Business.
  • Chapter 15 warns of the Penalties and Sanctions for non-compliance with regulations.

Spanning nearly 200-pages, the NFA Handbook is available from the ATF website (www.atf.gov) or a reprint may be ordered from the industry trade journal, The International Firearms Trade by e-mailing: INTLFT@aol.com. The cost from IFT is $55. postpaid. Customers outside the U.S. must add $10 shipping.

AG Gonzales Proposes ATF Reforms

U.S. Attorney General Alberto R. Gonzales has announced the Violent Crime and Anti-Terrorism Act of 2007, a Dept. of Justice proposal. The bill provides greater flexibility in the penalties that could be imposed on federal firearms licensees who violate the Gun Control Act.

Specifically, the bill would establish additional, graduated sanctions for certain violations of the federal firearms laws, including suspension of federal firearms licenses and imposing civil monetary penalties. Such lesser sanctions will enable ATF to more effectively address violations of the Gun Control Act, the Justice Dept. has said.

Guidance on Post Office Box Addresses of Gun Buyers

ATF has issued an Open Letter to federal firearms licensees (dated June 7, 2007) advising on procedures to follow when a firearms purchaser presents an identification document showing only a post office box or rural route number as their legal address. Though the Form 4473 (Firearms Transaction Record) includes language stating that a post office box is not an acceptable residence address, it is possible to get a variance.

While the Form 4473 requires that the buyer’s residence address be provided, the term “residence address” is not defined in the law or regulations. Since non-licensed purchasers are generally restricted to their state of residence in acquiring firearms, ATF requires that the residence address provided on the Form 4473 be sufficient to identify the physical location of the purchaser’s residence in the event the firearm is the subject of a trace request. Persons in rural areas may have only a post office box or rural route number as their only legal address, but this does not necessarily mean that such persons are prohibited from buying firearms.

ATF says it wants to assist dealers in verifying the addresses of purchasers and will issue a variance to dealers (who request it) who may then transfer firearms to customers who can only provide a post office box or rural route number as their address. However, the following conditions must be met:

  1. The FFL has information indicating the purchaser resides in a state where a post office box or rural route number is considered by the jurisdiction to be a legal residence address.
  2. . The dealer has no reason to believe the purchaser is not telling the truth about his address.
  3. The government-issued identification document of the prospective buyer must include a photo, date of birth and residence address.
  4. After the variance is approved, the dealer must require the purchaser to indicate the actual physical location of his residence on the Form 4473.


FFLs may request authority to use this alternate method by sending a request in writing to: ATF, Firearms Programs Division, Room 7400, 650 Massachusetts Ave., N.W., Washington, D.C. 20226.

ATF Seizes Inventory of New Orleans Retailer

The owner and two employees of Elliot’s Gun Shop in the New Orleans area were arrested in mid-May by ATF and Secret Service special agents on charges of falsifying firearms records and aggravated identity theft. The store’s inventory and business records were seized.

Herman Eicke, 65, of Kenner, LA, the store’s owner, and employees Timothy Harris, 54, and Rebecca Zitzmann, 42, both of Jefferson, LA, were arrested without incident. Zitzmann was charged with falsifying federal firearms records and Eicke and Harris with aggravated identity theft.

The ATF investigation found that firearms purchased at Elliot’s had an extremely short “time to crime” – the time from the sale of the firearm to its recovery after use in a crime.

During the period March 1, 2002, to March 1, 2007, more than 2,300 firearms purchased at Elliot’s Gun Shop and its predecessor, Elliot’s Small Arms, were recovered by various law enforcement agencies in relation to crimes. Over 125 of these were related to murder investigations and more than 500 were related to crimes involving illegal drugs.

According to the criminal complaint, an informant and an undercover ATF agent posing as a ‘straw buyer’ were able to purchase a firearm from Elliot’s with Zitzmann’s assistance. Zitzmann illegally sold a handgun to the informant (according to the complaint), but allowed the undercover ATF agent to complete the ATF paperwork to make it appear that the agent purchased the gun.

In February 2005, ATF revoked a FFL held by Harris, who was operating the store as Elliot’s Small Arms. Prior to losing his license, ATF cited Harris on numerous occasions for failing to comply with federal firearms regulations regarding the sale of guns. Immediately after having his license revoked, Eicke, who had been an employee of Harris at Elliot’s Small Arms, obtained a FFL under the trade name of Elliot’s Gun Shop. An ATF undercover investigation reportedly revealed that Harris was still running the business even though Eicke held the license.

ATF announced it also uncovered an Eicke-Harris scheme that included forging law enforcement officers’ signatures and using a photocopy of their law enforcement credentials to purchase handguns from a distributor in New York at discounted prices to increase the store’s profit margin. Upon confirming that Eicke and Harris were “stealing” the identities of law enforcement officers, ATF invited the Secret Service into the investigation due to its expertise in identity theft and financial crimes investigations. The Secret Service has jurisdiction for crimes of aggravated identity theft.

Anti-Violence Activist Arrested by ATF on Gun Charges

The founder (and an allegedly “documented” gang member) of “NOGUNS-Networks Organized for Gang Unity and Neighborhood Safety,” an alleged gang intervention program, has been arrested on California state firearms charges.

During the investigation, an undercover agent was able to facilitate the purchase of a machine gun, three assault rifles, one handgun and two silencers from the founder of the group.

Hector Marroquin Sr., 51, of Downey, CA was held on charges for the illegal transfer/possession of the arms and conspiracy. Two others were also arrested.

CA Assembly Approves Micro-Stamping Bill

California Democrats are refueling a firearm micro-stamping proposal that has already passed the state Assembly. The measure, AB1471, would require starting in 2010 that all semiautomatic pistols sold in California contain a mechanism to stamp the gun’s make, model and serial number on the shell casing of the bullet every time the pistol is fired.

California state Department of Justice records reportedly show that about 2,400 homicides are committed each year and about 60% involve the use of a handgun. Moreover, about 70% of new handguns sold in California are semiautomatic pistols.

Last year, then-Assemblyman Paul Koretz, D-West Hollywood, introduced a similar bill that passed several hurdles but came up two votes shy in the Assembly on the last day of the legislative session. The latest bill was approved by the Assembly in a 44-29 vote, largely along party lines. The bill now heads to the state Senate.

The primary difference in this year’s bill is that the measure requires the micro-stamping mechanism to etch the information from at least two different places in the pistol. Last year’s bill only required one and the firing pin was widely considered as the most logical piece of the firearm to stamp the information.

Opponents argued then, and now, that the firing pin can be removed and defaced, or simply replaced. That’s why this latest bill requires the etching to occur in more than one place inside the gun.

To negate the arguments of opponents that the proposal will greatly add to the manufacturing costs of handguns equipped with the technology, proponents of the measure have gotten the patent owner, NanoMark Technologies of Londonderry, N.H., to agree to give away the patents to gun manufacturers if the bill is enacted.

The proposal has also gotten the attention of the U.S. Congress. One of the leading proponents of gun control of all sorts, Sen. Edward Kennedy, D- Massachusetts, has said that he will craft a micro-stamping bill to be introduced in the U.S. Congress in the near future.

Denel Eyes New Ventures

South African arms manufacturer Denel has been holding talks with various overseas and local companies, as part of its strategy to unbundle the organization and make it more open to mergers and acquisitions, according to trade sources.

Bushmaster in Joint Venture

Bushmaster Firearms International, LLC (Bushmaster) and Iron Brigade Armory, Ltd. (IBA) have formed Bushmaster Custom Shop by Iron Brigade (BMCS) – a new joint venture to focus on premium AR rifle systems, and customized tactical precision bolt action rifle platforms, initially for law enforcement and military applications.

The new firm will be based in Jacksonville, North Carolina with Norm Chandler, Jr. as its CEO. Bushmaster will be the majority owner and will provide the initial funding for facilities and personnel. “The opportunity to work with IBA allows Bushmaster to extend our brand to the premium end of the AR-15 market place with customized solutions at lower volumes than our Windham facilities can handle economically, and is something that our customer base is telling us is important in addressing their needs,” stated E. Scott Blackwell, Bushmaster President and Chief Sales and Marketing officer.

Initially, BMCS will focus on custom AR-15 platforms based on the .223 and 5.56 caliber ammunition, with first products being available for sale in mid summer 2007. BMCS will also leverage the work done by Iron Brigade Armory and its founder – weapons designer and sniper author LTC. (ret) Norm Chandler, Sr. – to offer tactical precision rifles later this year.

Formed in 1994, IBA specializes in designing, producing and selling customized Sniper Weapon Systems (SWS). IBA’s focus is to provide field/combat reliable SWS that are capable of urban as well as long range operations.

Beretta has New Director of Sales

Beretta USA Corp. has promoted Rob Viner to Director of Sales/Dealers. Viner joined the company in 1997 as a Commercial Field Sales Representative. Most recently he held the position of South East Commercial Regional Business Development Manager. At the Beretta National Sales Meeting Awards Banquet he was recognized with the coveted Beretta Trident Ring for being named the 2006 Regional Business Development Manager of the Year.

Sabre Defence Has New Director of Commercial Operations

Sabre Defence Industries of Nashville, Tennessee has hired Michael Curlett as Director of Commercial Operations. Curlett will oversee all of the production, sales and marketing activities for Sabre’s Commercial Products in the U.S. He will assist with commercial, police and military sales in the international market.

Curlett comes to Sabre Defence from EOTech, a subsidiary of L3 Communications, one of the largest defense contractors in the U.S. As Director of European Sales for L3-EOTech, he worked to expand their sales and distribution channels throughout Europe and the Middle East

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 also offers FFL-mailing lists to firms interested in direct marketing efforts to the industry. He may be reached at: FirearmsB@aol.com.

This article first appeared in Small Arms Review V11N1 (October 2007)

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Tags: 2007AB1471ATFATF Form 4473Bureau of Alcohol-Tobacco-Firearms & Explosivesdestructive devicesfirearmIndustry NewsMachine GunNational Firearms Act Trade and Collectors AssociationNFA HandbookNFATCARobert HausmanRobert M.HausmansilencerV11N1
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