By Johanna Reeves, Esq.
Exporting Firearm Suppressors
Will a Policy Change Allow U.S. Industry to Compete in the Global Market?
“Ding dong the witch is dead!” In the midst of the summer heat and the craziness that has gripped our country (the pandemic, social unrest and uprisings, mob violence and political nuttiness), something happened that appeared to bring a ray of sunshine to the firearms industry. After more than 18 years, the U.S. Department of State rescinded its policy of denial that prevented U.S. companies from exporting suppressors to most commercial end-users. Because of this policy, the only permissible exports were to military or official end-users in countries friendly to the U.S.
Hailing the policy change as a win, the firearms industry was quick to praise President Trump and his administration for making such a bold move. Many expect the change will boost suppressor sales and enable U.S. companies to finally compete in the well-established global market. Knox Williams, president of the American Suppressor Association (ASA), said in a statement issued by ASA, “This change in policy will create hundreds of jobs at a time when our country needs them the most” (americansuppressorassociation.com/suppressor-exportation-now-legal).
The projected sales certainly have the anti-Trump and anti-firearm forces worried. In a July 13, 2020, article, the New York Times cites a potential “$250 million a year in possible new overseas sales” of suppressors (Michael LaForgia and Kenneth B. Vogel, “Inside the White House, a Gun Industry Lobbyist Delivers for His Former Patrons,” nytimes.com/2020/07/13/us/trump-gun-silencer-exports.html). “I sure hope that none of these are aimed at U.S. or allied forces” the Times quotes Lincoln Bloomfield, Jr., who served under President George W. Bush as Assistant Secretary of State for Political-Military Affairs when the State Department initiated the so-called ban.
But is this change in policy really all that it’s cracked up to be?
The Department of State—Protector of U.S. Foreign Policy and National Security
Pursuant to the Arms Export Control Act (AECA), Pub. L. 94-329, 90 Stat. 729 (enacted June 30, 1976, codified at 22 U.S.C. Ch. 39), Congress granted the president the power to control the export and import of defense articles and defense services “in furtherance of world peace and the security and foreign policy of the United States” (22 U.S.C. §2778(a)(1)). As part of this authority, the president must determine what items should be controlled as defense articles and what activities constitute defense services.
By way of executive order, the president has delegated to the Secretary of State the authority to control the exports, temporary imports and brokering of defense articles and defense services (most of you are likely familiar with the fact that the Bureau of Alcohol, Tobacco, Firearms and Explosives controls the permanent import of defense articles, but that is not the subject of today’s article). Through multiple layers of delegations, the Political-Military Affairs Bureau’s Directorate of Defense Trade Controls (DDTC) is primarily responsible for administering the regulations that implement the AECA. The regulations are known as the International Traffic in Arms Regulations (ITAR), which have been the subject of many “Legally Armed” columns.
Firearm Suppressors—Significant Military Equipment?
The U.S. government has long controlled firearm suppressors as defense articles under the ITAR, presumably in furtherance of world peace and the national security and foreign policy of the United States. Going back to at least July 1993, firearm suppressors were classified on the United States Munitions List (USML) under Category I, paragraph (b). See 58 Fed. Reg. 39283 (July 22, 1993). Back then, however, the State Department did not consider firearm suppressors to be “Significant Military Equipment” (SME). SME is defined as articles for which special export controls are warranted because of the capacity of such articles for substantial military utility or capability, and includes those articles on the USML marked with an asterisk (*) as well as all classified defense articles. See 22 U.S.C. §2794(9); 22 C.F.R. §120.7.
The State Department did not classify suppressors as SME until 2002. In an April 29 notice, the State Department announced that firearm suppressors were re-designated as SME. See 67 Fed. Reg. 20894 (Apr. 29, 2002). The public notice did not contain any explanation as to what prompted the re-designation, but it is important to note that this announcement came less than 2 weeks after the State Department initiated its policy (unpublished) of prohibiting suppressor exports to private entities.
Eighteen years later, significant change swept across the U.S. export controls landscape. In March 2020, new rules went into effect that completely overhauled the USML categories controlling firearms and ammunition, whereby most commercially available firearms and ammunition moved off the USML and over to the Commerce Control List for exports. Suppressors were left behind on the USML, along with their SME designation. But as it turns out, more change was coming.
State Department Rescinds Its Old Policy
On July 10, 2020, the DDTC announced that it was changing its policy on suppressor exports. The web posting read as follows:
Effective immediately, the Department of State has rescinded its April 18, 2002, firearms sound suppressor policy. This policy provided for enhanced guidelines for the approval and issuance of export licenses for sound suppressors and restricted their export to only official end users such as government or military entities. Henceforth, DDTC will handle suppressor exports in a manner consistent with other USML-controlled technologies. This requires that applicants must identify a specific end user. Applications for the permanent export of hardware must include purchase documentation, a DSP-83 non-transfer and end use certificate (as suppressors are considered Significant Military Equipment under the USML), an end-user statement, and an import permit (if required by the destination country). Consistent with current licensing practices, all licenses will be reviewed and adjudicated on a case-by-case basis, and any pre-license checks or post shipment verifications will be conducted as deemed necessary and appropriate based on the totality of the circumstances of the transaction. Standard staffing protocols within the Department and interagency will be applied as required.
When the announcement came down, it was difficult to tell what was causing the popping sound heard far and wide in Washington, D.C. Was it industry lobbyists and representatives gleefully opening champagne in celebration? Perhaps it was the heads of gun control advocates exploding in frustration and dismay? More likely it was both, but what actually changed? Did this announcement really mark the end of an era? Was the State Department actually lifting a ban and easing restrictions on the exports of suppressors?
It is important to not lose sight of the details, where the devil so often lurks. According to the notice, “DDTC will handle suppressor exports in a manner consistent with other USML-controlled technologies.” The DDTC goes on to explain that “all applicants must identify a specific end-user,” which by the way is a standard requirement for all other articles controlled under the ITAR. When asked for clarification on this point in the civilian context, the DDTC advised that it will not authorize the export of suppressors to dealers or distributors without identification of the ultimate end-user (i.e., the customers) and presentation of a Nontransfer and Use Certificate (Form DSP-83) signed by that individual. All of which are standard requirements for SME. Consequently, applications to export suppressors to distributors or “for commercial resale in NAMED COUNTRY” as an end-use/end-user will be returned without action. See Reeves & Dola, LLP alert, “State Department Updates Suppressor Policy,” July 15, 2020, reevesdola.com/alerts.
So is this change really better for industry? Sure, as long as the exporter is able to identify each ultimate individual end-user and get his or her signature on a Form DSP-83. Is this realistic? Or will industry remain stuck in the same old position of not being able to obtain the elusive State Department approval to export suppressors to non-official entities or persons because of a requirement that is impossible to satisfy? In the haunting words of Pete Townshend, “Meet the new boss, same as the old boss.”
Many in the media and elsewhere will miss this nuance. “U.S. loosens export curbs on gun silencers” screams the headline from a Reuters report, reuters.com/article/us-usa-arms-silencers-idUSKBN24B34K. Loosen? The report goes on to explain that “[s]ilencers will now be able to be licensed and exported like any other weapon on the U.S. munitions list which includes satellites and nuclear weapons.” The use of the phrase “be able to” is an interesting twist on reality. Remember when Democrat politicians and human rights watchdog groups were wringing their hands over the proposed rules to move firearms and ammunition off the USML? They exclaimed that such a change in export controls will add to world instability and undermine our national security. Back then, being able to be licensed and exported like other weapons on the USML was a good thing. Now it’s not? It will make your head spin.
In reality, the harsh truth for industry may very well be the fact that suppressors are licensed and exported like any other weapon on the USML, particularly those articles designated as SME. The dawning of a new era may in practical terms be nothing more than a big fat nothingburger.
But hysterics are never lacking in Washington, and this latest development does not disappoint. There is “concern” over how this change came about, namely the role of a particular White House lawyer who had personal and financial ties to the suppressor industry. These ties are detailed in the July 13 Times article, which quotes government watchdog groups saying, “the case raised concerns about special interests gaining remarkable access in the Trump White House.” The Times goes on to report that “[t]here is a pattern in the Trump Administration of handing over policymaking to allies of special interest groups with a stake in those policies.”
Yes, you read those two quotes correctly. No doubt the watchdog groups were just formed, and the Times reporter is brand new to Washington, D.C.
Predictably, House Democrats are very upset, and not just because of the prospect of U.S.-made suppressors flooding the world market and the risk to U.S. troops. Citing the Times article, Stephen Lynch (D-MA), Chairman of the House Subcommittee on National Security, sent a letter to the Office of Management and Budget requesting documents related to the State Department’s decision to overturn its restrictive policy. “The overseas sale of U.S. defense articles, especially when those weapons could endanger the safety and security of our men and women in uniform, cannot and should not be influenced by personal financial or political interests.” The letter is available at oversight.house.gov.
Of course neither the letter request nor the House Committee on Oversight and Reform’s web announcement acknowledge the legality, popularity and widespread availability of firearm suppressors throughout the world. This accessory has been and remains a very popular item in the commercial market, not just in the U.S. but everywhere. So regardless of whether U.S. industry gets to participate in the world market, suppressors will continue to be bought and sold. How can the U.S. government continue to justify treating suppressors as SME?
The July 13 Times article quotes a State Department spokeswoman as saying “U.S. companies should have the same opportunity to compete in the international marketplace as other manufacturers around the world.” This spokeswoman also explained that suppressors are more readily available in foreign countries now than when the ban was originally imposed. Nevertheless, the State Department has not changed its designation of firearm suppressors as SME.
There is a perception that the Trump Administration has lifted a ban on suppressor exports because a blanket policy of denial is no longer in place. The perception is clearly dominating both sides of the debate. But talk is cheap, and words are easy. The fundamental issue of whether the new State Department policy amounts to the change for which industry so long has been pining is not settled. It seems that as long as suppressors are classified as SME, there really won’t be any change at all. We’ll see.
***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. On March 26, 2019, Johanna testified before the House Subcommittee on Oversight and Investigations on the proposed rules to transition most firearms and ammunition from the export controls of the State Department and over to the jurisdiction of the Commerce Department (foreignaffairs.house.gov/2019/3/proposed-small-arms-transfers-big-implications-for-u-s-foreign-policy). Johanna can be reached at firstname.lastname@example.org or 202-715-9941.
|This article first appeared in Small Arms Review V24N10 (December 2020)|
and was posted online on December 06, 2020