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Legally Armed

SAR Staff by SAR Staff
September 23, 2022
in Articles by Issue, Articles, Columns, News & Opinion, Search by Issue, V25N2, Volume 25
BOOK REVIEW
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ATF to Industry Firearms Will Be Evaluated for Import Only When Conditionally Imported

By Johanna Reeves, Esq.

Recently the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) announced that only firearms conditionally imported are eligible for evaluation and determination as to whether said firearms are importable under the Gun Control Act (GCA), and such firearms must be delivered to ATF directly from Customs and Border Protection (CBP) after entry on the conditional import permit. ATF will not evaluate for importability any sample submitted by the importer, such as firearms in a country under a temporary import authorization or domestically made prototypes.

ATF’s pronouncement came during a firearm imports webinar on October 29, 2020. When an attendee requested further explanation, ATF legal counsel stated that the GCA regulations provide the only lawful way for importing for the purpose of examination and evaluation. No further information or explanation was provided. So, like a child facing a parent’s retort of “Because I said so,” industry, including the most experienced importers, is left wondering why.

Importing firearms under the GCA is tricky for many reasons, not the least of which is the fact that the statute makes it unlawful to import firearms except those identified in section 925(d) of the statute. See 18 U.S.C. §922(l). These firearms are: (1) those imported for scientific or research purposes; (2) unserviceable firearms imported as a curio or museum piece (not machine guns); (3) non-NFA-controlled firearms that are generally recognized as particularly suitable for or readily adaptable to sporting purposes; and (4) U.S. goods being returned to the United States.

Section 925 also states that the “Attorney General shall permit the conditional importation or bringing in of a firearm or ammunition for examination and testing in connection with the making of a determination as to whether the importation or bringing in of such firearm or ammunition will be allowed under this subsection.”

ATF’s implementing regulations at 27 C.F.R. §478.116 address conditional importation as follows:

The Director shall permit the conditional importation or bringing into the United States or any possession thereof of any firearm, firearm barrel or ammunition for the purpose of examining and testing the firearm, firearm barrel or ammunition in connection with making a determination as to whether the importation or bringing in of such firearm, firearm barrel or ammunition will be authorized under this part. An application on ATF Form 6 for such conditional importation shall be filed, in duplicate, with the Director. The Director may impose conditions upon any importation under this section including a requirement that the firearm, firearm barrel or ammunition be shipped directly from Customs custody to the Director and that the person importing or bringing in the firearm, firearm barrel or ammunition must agree to either export the firearm, firearm barrel or ammunition or destroy same if a determination is made that the firearm, firearm barrel or ammunition may not be imported or brought in under this part. A firearm, firearm barrel or ammunition imported or brought into the United States or any possession thereof under the provisions of this section shall be released from Customs custody upon the payment of customs duties, if applicable, and in the manner prescribed in the conditional authorization issued by the Director.

ATF interprets this regulation as requiring the agency to restrict its import evaluations (to determine whether the firearm meets the criteria of section 925(d)) to only those firearms conditionally imported.

The GCA makes it unlawful for any person to import a firearm into the U.S., unless that firearm is one identified in section 925(d). It stands to reason that whether a particular firearm falls within one of the section 925(d) categories, may require ATF evaluation and confirmation. The statute anticipates this and states that the Attorney General shall permit the conditional importation of a firearm for examination and testing in connection with making a determination as to whether the importation or bringing in of such firearm will be allowed. The requirement (the use of “shall”) attaches to the Attorney General to permit a conditional import for evaluation purposes. Without such language, there would be no way for unknown firearms to be evaluated. But this does not mean that ATF can evaluate only those firearms conditionally imported. Indeed, the statute does not include any language that prohibits ATF from examining firearms submitted by the importer directly to determine classification under section 925(d).

The process for undertaking a conditional import is outlined in the regulation, which states, “[a]n application on ATF Form 6 for such conditional importation shall be filed, in duplicate, with the Director.” Again, the use of “shall” pertains to where and in what form the Form 6 is filed. No reasonable person would interpret this to mean that the only way to have a firearm evaluated for importability under section 925(d) is to file a conditional import permit.

Nevertheless, ATF has extended its interpretation to refuse to evaluate firearms that have been temporarily imported into the U.S. In a recent response to an importer’s request, ATF informed the importer that firearms brought into the U.S. on a DSP-61 temporary import license or similar mechanism (presumably this would include a temporary import of a Commerce-controlled firearm) would no longer be classified for permanent importation. To justify its position, ATF offered a quote from the International Traffic in Arms Regulations (ITAR) stating, “Indeed, under 22 CFR §123.3(c) ‘… A DSP-61 will not be approved to support permanent import requirements.’”

Indeed, ATF’s ITAR quote is either disingenuous or reveals its failure to comprehend another agency’s regulation. Here is section 123.3(c) in its entirety:

A DSP-61 license may be obtained by a U.S. importer in satisfaction of 123.4(c)(4) of this subchapter. If a foreign exporter requires documentation for a permanent import, the U.S. importer must contact the [ATF] for the appropriate documentation. A DSP-61 will not be approved to support permanent import requirements.

When read in context, ATF’s cited language refers to the scope of a DSP-61 license, which only authorizes temporary imports of defense articles and cannot be used for permanent importation. ATF would have us believe that DDTC would not approve a DSP-61 license for testing and evaluation purposes. But this is ridiculous. U.S. parties temporarily import items for many reasons, including for testing and evaluation purposes. In fact, the ITAR offers license exemptions for defense articles temporarily imported for inspection and testing, among other reasons. See 22 C.F.R. §123.4(a)(1). Although this particular exemption is applicable to U.S.-origin defense items (including items manufactured abroad under government approval), my point here is that the ITAR recognizes testing and evaluation to be a legitimate purpose for temporarily importing an article. Consequently, ATF’s half-hearted attempt to use the ITAR to justify its refusal to undertake a 925(d) evaluation of a foreign-origin firearm temporarily in the U.S. must fail.

Likewise, there is no justification for ATF to refuse to evaluate a Commerce-controlled firearm temporarily imported into the U.S. To illustrate, the Export Administration Regulations (EAR) offer license exceptions for items temporarily in the U.S., including foreign-origin items being returned to the country from which the item was imported and the characteristics and capabilities have not been enhanced. See 15 C.F.R. §740.9(b)(3). Neither the EAR nor the ITAR prohibit testing and evaluation of an item temporarily imported into the U.S., even if such evaluation is undertaken by another agency (imagine how this would affect the Department of Defense). Consequently, ATF cannot (and should not) cite to these regulations to justify its refusal to evaluate temporarily imported firearms.

ATF referenced the GCA’s implementing regulations as setting forth the specific process to import firearms to be evaluated. “Specifically, 27 CFR §478.116 allows the conditional importation of a firearm for purposes of examination and testing to be performed by FTISB to determine whether the conditionally imported firearm meets the permanent importation criteria under 18 U.S.C. §925(d).” As examined above, however, the regulation does not limit a 925(d) evaluation to only those firearms imported on a conditional Form 6. The necessary conclusion, therefore, is that ATF has no justification for refusing to evaluate temporarily imported firearms for importability under the GCA section 925(d).

And, finally, there is equally little support for ATF’s position that it will not evaluate prototypes that are created in the U.S. for ultimate manufacture overseas (think a build-to-print situation).  From a pure logical standpoint, how can a company reasonably invest time and money into developing a prototype they wish to have manufactured overseas if they are not able to confirm before they engage the foreign manufacturer that the firearm prototype is actually importable?  Again, there is no language in the GCA that limits ATF’s review to only those firearms that are conditionally imported. Domestic prototypes have absolutely no reason to be treated differently than those that are imported for evaluation (whether permanently or temporarily).

This ATF policy is having a significant impact on businesses and the reason for the change is not clear. Why does it matter whether an import sample is brought to ATF for evaluation on a conditional Form 6 or a temporary import authorization, or the firearm is a prototype that the importer wishes to have manufactured overseas? ATF has explained that when the industry member submits the firearm for import evaluation, there is no guaranty that what ATF evaluates is what will ultimately be imported. Under that logic, what is the guaranty that what ATF evaluates pursuant to a conditional Form 6 is what the importer will bring in under subsequent Form 6 permit applications? Indeed, ATF even considers that potential when it includes this standard language with their evaluations:

We caution that the above-noted determinations regarding importability are based on the physical examinations of the submitted firearms. If any characteristic of the above­named approved firearm are changed, this approval will be voided, and the new design will require re-examination by FTISB.

With that in mind, what difference does it make if ATF receives for import evaluation a firearm from an industry member rather than from CBP? What justification does ATF have for this policy? Preserving the chain of custody does not carry any justification in these cases because ATF seems to be conflating the one-and-done import scenario with a licensee’s desire for evaluation of a sample of firearms to be imported in the future. While ATF’s evaluation of a firearm results in a determination as to whether that firearm is importable, under ATF’s logic, will the importer have to present on another conditional import for every import it undertakes, creating a never-ending loop of conditional import evaluations?

Is this evidence of a regulatory agency’s profound inability to understand business operations of the regulated? And once again, we have ATF changing its policy with no advance notice or opportunity for the public to comment, or any requirement to provide any meaningful explanation or justification for this policy.

***The information contained in this article is for general informational and educational purposes only and is not intended to be construed or used as legal advice or as legal opinion. You should not rely or act on any information contained in this article without first seeking the advice of an attorney. Receipt of this article does not establish an attorney-client relationship.

About the Author

Johanna Reeves is the founding partner of the law firm Reeves & Dola, LLP in Washington, DC (reevesdola.com). For more than 17 years she has dedicated her practice to advising and representing U.S. companies on compliance matters arising under the federal firearms laws and U.S. export controls. Johanna can be reached at jreeves@reevesdola.com or 202-715-9941.
Tags: 2021ATF to Industry: Firearms Will Be Evaluated for Import Only When Conditionally ImportedFebruary 2021Johanna Reeves Esq.Legally ArmedV25N2
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