INDUSTRY NEWS: NOVEMBER 2003

by Robert M. Hausman

Some 150 executives in the firearms and ammunition imports and national defense sectors gathered in Washington, D.C. July 21 and 22, for the second annual presentation of ATF And The Imports Community, a one-and-a-half day intensive seminar focusing on topics related to the importation of firearms, ammunition and related articles. The heavily attended second annual import regulation conference unveiled a wealth of regulatory data.

A cooperative effort between the Bureau of Alcohol, Tobacco, Firearms & Explosives, the Bureau of Customs and Border Protection, the Department of State and the F.A.I.R. Trade Group (which represents licensed importers), the meeting was held at the Wyndham City Center hotel, in the center of Washington, D.C.

Topics covered at the seminar, which was led by Mary Jo Hughes, ATF Chief, Firearms, Explosives and Arson Services Division, included: an overview of the electronic ATF Form 6, the forthcoming new electronic Import Guide, pending legislation and rulings/change in a licensee’s corporate structure or control, criteria for importation of sporting firearms and conditional imports, regulations regarding machine gun parts kits, Project I.M.P.O.R.T., customs bonded warehouses, foreign trade zones, the Safe Explosives Act, destructive devices and National Firearms Act issues, policies and procedures of the U.S. Department of State’s Bureau of Political-Military Affairs Office of Regional Security and Arms Transfer Policy, and doing business with Canada.

Hughes led off the meeting with a presentation giving an overview of the imports community. In a heavily statistics laden presentation, she explained that the number of applications processed by ATF’s National Firearms Act (NFA) Branch has grown steadily in recent years from 16,772 in fiscal year 1980, to 26,779 in 1985, to a whopping 194,215 in 1990, to 216,026 in 1995, to 309,006 in 2000 and to 343,875 in fiscal year 2002.

The Numbers

The number of firearms registered with ATF’s NFA Branch (which would include machine guns, short-barreled rifles and shotguns, silenced firearms and destructive devices) has also grown through most years. In fiscal year 1980, there were 176,365 NFA firearms registered. In 1985 some 84,839 were registered and this number increased to 439,339 in 1990, to 756,260 in 1995, to 1,271,568 in 2000 and to 1,523,855 in fiscal year 2002. These figures include registrations by individuals, commercial firms, police agencies, etc.

Growth of SOTs

The number of Special Occupational Tax (SOT) Taxpayers has grown steadily as well, Hughes pointed out. In 1980, there were just 920, but this figure grew to 2,696 just five years later in 1985. In 1990, the number grew to 2,827 then declined to 2,468 in 1995 before growing again to 2,668 in 2000. In fiscal year 2002, there were 2,578 SOTs.

FFL Rise & Fall

The dramatic rise and fall of Federal Firearms Licensees was tracked by Hughes as well. In fiscal year 1975, there were 161,927 and in 1980, some 174,619. Dramatic growth ensued over the next five years so that by fiscal year 1985 there were 248,794 and 269,079 in 1990. After the new restrictions ordered on the issuance of FFLs and the increase in the license fees imposed by the Clinton Administration, the number of FFL-holders declined to 191,4495 in fiscal year 1995 and dropped to 103,157 in 2000. In 2002, there were 103,411.

Importer Growth & Decline

The number of licensed FFL importers has also risen and fallen in recent years, Hughes noted. For Type 08 importer licensees, there were 403 in fiscal year 1975, and 430 in 1980. Dramatic growth occurred over the next years as in fiscal year 1985, there were 881 licensees and 946 in 1990. The total declined to 842 in 1995 and dropped to 748 in 2000. In fiscal year 2002, there were 735 Type 08 licensees.

For Type 11 FFL importers, there were just 7 in fiscal year 1975, 11 in 1980, 45 in 1985, 73 in 1990, 71 in 1995, 71 in 2000 and 74 in 2002.

Hughes attributed the decline in numbers of importers in recent years to mergers and acquisitions among import firms.

Applications for Importation

The number of applications for importation were also tracked during the seminar. In fiscal year 1980, there were 13,959 applications and 20,270 in 1985. The figure for fiscal year 1990 was 19,248. The total dropped to a low of 10,649 in 1995 during the height of the Clinton era in which that administration saw imports as the weak link in the firearms distribution chain and many impediments were imposed on importers during those years. The figure rose to 12,135 in 2000 and dramatically climbed to 19,166 in fiscal year 2002.

Number of Imported Firearms

The number of firearms imported to the U.S. (as tracked by U.S. Customs) has grown most significantly in the last several years. In fiscal year 2000, there were 1,096,782 firearms imported. In 2002, there were 1,957,563!

To put these latest firearms importation figures in perspective, in fiscal year 1980, there were 754,102 firearms imported. In 1985, the total was 697,485, for 1990 it was 843,809, and in 1995 the total number of firearms imported came to 1,103,404.

Hughes mentioned that of the approximately 800 licensed importers in the year 2002, only about 25% of them are very active as some 202 importers filed over 80% of the import permit applications.

Imported Firearms By Type

The importation of handguns has seen the most dramatic rise in volume in the last 20-some years. In fiscal year 1980, a total of 298,689 were imported to the U.S., with the total declining to 229,497 in 1985. By 1990, the volume rose to 448,517, grew to 706,093 in 1995, dropped to 465,903 in 2000, but rose significantly to 971,509 in 2002.

Rifle importation has grown as well. In fiscal year 1980, some 182,305 were imported. This figure jumped to 270,571 in 1985, moved down to 203,505 in 1990, rose again to 261,185 in 1995 and grew to 298,894 in 2000. For fiscal year 2002, there were a grand total of 487,367 rifles imported.

Shotgun importation has grown significantly as well. In fiscal year 1980, a total of 273,108 were imported to the U.S. This figure dropped to 197,417 in 1985 and declined to 191,797 in 1990 before dropping again to 136,126 in 1995. In fiscal year 2000, the total grew to 331,985 and jumped up to 498,687 in fiscal year 2002.

Sauer & Sohn Hits Bull’s Eye With French Government Contract

France has placed an order for 200,000 SIG-Sauer pistols, the largest European order yet placed in post-war years for the delivery of police pistols. J.P. Sauer & Sohn, founded in 1751, will supply the 200,000 SIG-Sauer Model SP2022 9×19 mm pistols with 15-round magazines to equip the French police over the next two years. It was a major coup for the German gunmaker, and many of Germany’s otherwise anti-gun politicians were quick to praise the gunmaker for the achievement as the contract means jobs for the German people and tax revenue for the government.

Sauer was awarded the contract on May 19th by the French Ministry of the Interior. The new pistol will be used by the French police (under the Ministry of the Interior), the Gendarmerie (Ministry of Defense) and French Customs (Ministry of Finance). Many of the well-known pistol producers participated in the competition for the contract that lasted for several months. The chosen sidearm, the SIG SP 2022, is based on the SIG PRO SP2009 with the additional improvements of:

• Picatinny-guide rail at the underside front of the frame to allow fixation of a flashlight or laser sight.
• An enlarged disassembly lever.
• A newly shaped trigger contact surface.
• An installed transponder for electronic service checks.
• A lanyard ring.

Thomas Schnizler, J.P. Sauer’s manager, situated in Eckernfoerde, said, “The French police decided to go for reliability and quality. It’s a great success for our middle-class company and for Germany. By getting awarded this contract, Sauer & Sohn is continuing their worldwide success in the range of police pistols.”

New Structures Within HK Group, Germany

Within the scope of new structures formed recently within the HK Group, which has been under new management since late 2002, the Heckler & Koch Jagd- und Sportswaffen GmbH (HKJS) has been founded as of July 1st. The new entity is the result of a careful economic, legal and political analysis of H&K’s business activities. Thus, the new company’s board has decided to divide the economic activities of H&K into a civilian sector and a defense technology sector.

HKJS is dedicated exclusively to the hunting and target shooting markets. The goals of having divisions of the company dedicated to serving narrow markets is to get a faster reaction time to meeting customer requirements and an increased conception of new products with an identifiable market need. Design, manufacture, distribution and logistics will be handled by the HKJS staff on their own. Close cooperation with headquarters staff at Heckler & Koch is believed will ensure that HK-typical attributes such as highest quality and innovation will be applicable to HKJS products.

Korth 50th Anniversary Set Coming

Korth Germany GmbH, in celebration of its 50th anniversary since its founding coming in 2004, will produce an exclusive set consisting of a revolver and a semiautomatic pistol available in a limited quantity of five sets including an engraved collector knife. The guns will be highly engraved and carry an innovative finish. More information can be obtained from: info@korthwaffen.de

Russians Disfavor Self-Defense Guns

Sixty percent of Russians oppose the sale of firearms for self-defense purposes, and only 18%, mainly young people aged 18 to 24, favor the idea, a recent poll has found.

When asked what arms they would buy if they could, 51% of the respondents said they would not buy any arms, 19% said they would buy a pepper spray gun, 18% a pistol, 4% an automatic rifle and 3% a hunting rifle.

Only a quarter of respondents (26%) believe that easier access to arms would make Russia safer. An estimated 43% of the respondents believe that this would make Russia less safe, 19% said it would have no effect and 12% were undecided.

The overwhelming majority of Russians (90%) do not have registered personal firearms and only one-tenth of the respondents said they do have such firearms. Four percent of the respondents own hunting rifles and 3% have arms as a requirement for their jobs.

The information was obtained by sociologists from the company ROMIR Monitoring in a poll conducted of 1,500 Russians in July.

Sen. Shelby Holding Trade with Serbia & Montenegro In Check

A number of firearms and ammunition importers have expressed concern regarding delayed Senate action on S.671 which would normalize US trade relations with Serbia and Montenegro; the Congressional Quarterly reports. The House passed its version (H.R. 1047) back on March 5. Recently, nearly 70 senators wrote Majority Leader Bill Frist (R-TN) urging swift consideration. So what is causing the delay? Socks.

Sen. Richard C. Shelby (R-AL) wants to reverse a provision in last year’s trade law (PL107-210) that allows companies in Caribbean countries to sew up the toes of socks made in the U.S., package them, and send them back to the US on a duty-free basis. He says the change could cost 10,000 jobs in his state.

Fort Payne in DeKalb County, AL, calls itself the “Sock Capital of the World,” and Shelby is determined to keep it that way. The county is home to over 150 sock mills. While there is nothing about socks in the bill, Shelby has placed a hold on it; insisting something be done to help the sock industry in his state before lifting the hold.

The annual miscellaneous trade bill is designed to excuse companies from paying duties on imports if there is no domestic source for the item, repay companies that accidentally paid duties, and make other trade-related adjustments. Provisions in the bill must be non-controversial and have minuscule budgetary consequence.

The June 26 letter to Frist from Sen. Kay Bailey Hutchison (R-TX) and 65 colleagues said the delay in moving the bill has cost U.S. companies $32 million in the first five months of this year. There are reportedly 57 companies in Texas alone affected by the delay.

Serbia’s Prime Minister, Zoran Zivkovic visited Washington in late July to meet with top White House officials and members of Congress on the matter. Sen. George V. Vornovich (R-OH) warned that a leading candidate in upcoming elections in Serbia is a “far right nationalist. “They could easily go in the wrong direction if economic conditions do not improve,” warned Vornovich.

A senator can put a hold on a bill or a nominee by informing leadership that he or she might object if the matter is brought to the floor. The procedural tradition, which greatly increases the power of individual senators, is honored regardless of which party is in power. “Our first commitment must be to preserve jobs in this country – in my case, those of my fellow Alabamians,” Shelby said.