Small Arms Review
  • Home
  • Articles
    • Guns & Parts
    • Suppressors
    • Optics & Thermals
    • Ammunition
    • Gear
    • News & Opinion
    • Columns
    • Museums & Factory Tours
    • ID Guides
    • Interviews
    • Event Coverage
    • Articles by Issue
      • Volume 1
        • V1N1 (Oct 1997)
        • V1N2 (Nov 1997)
        • V1N3 (Dec 1997)
        • V1N4 (Jan 1998)
        • V1N5 (Feb 1998)
        • V1N6 (Mar 1998)
        • V1N7 (Apr 1998)
        • V1N8 (May 1998)
        • V1N9 (Jun 1998)
        • V1N10 (Jul 1998)
        • V1N11 (Aug 1998)
        • V1N12 (Sep 1998)
      • Volume 2
        • V2N1 (Oct 1998)
        • V2N2 (Nov 1998)
        • V2N3 (Dec 1998)
        • V2N4 (Jan 1999)
        • V2N5 (Feb 1999)
        • V2N6 (Mar 1999)
        • V2N7 (Apr 1999)
        • V2N8 (May 1999)
        • V2N9 (Jun 1999)
        • V2N10 (Jul 1999)
        • V2N11 (Aug 1999)
        • V2N12 (Sep 1999)
      • Volume 3
        • V3N1 (Oct 1999)
        • V3N2 (Nov 1999)
        • V3N3 (Dec 1999)
        • V3N4 (Jan 2000)
        • V3N5 (Feb 2000)
        • V3N6 (Mar 2000)
        • V3N7 (Apr 2000)
        • V3N8 (May 2000)
        • V3N9 (Jun 2000)
        • V3N10 (Jul 2000)
        • V3N11 (Aug 2000)
        • V3N12 (Sep 2000)
      • Volume 4
        • V4N1 (Oct 2000)
        • V4N2 (Nov 2000)
        • V4N3 (Dec 2000)
        • V4N4 (Jan 2001)
        • V4N5 (Feb 2001)
        • V4N6 (Mar 2001)
        • V4N7 (Apr 2001)
        • V4N8 (May 2001)
        • V4N9 (Jun 2001)
        • V4N10 (Jul 2001)
        • V4N11 (Aug 2001)
        • V4N12 (Sep 2001)
      • Volume 5
        • V5N1 (Oct 2001)
        • V5N2 (Nov 2001)
        • V5N3 (Dec 2001)
        • V5N4 (Jan 2002)
        • V5N5 (Feb 2002)
        • V5N6 (Mar 2002)
        • V5N7 (Apr 2002)
        • V5N8 (May 2002)
        • V5N9 (Jun 2002)
        • V5N10 (Jul 2002)
        • V5N11 (Aug 2002)
        • V5N12 (Sep 2002)
      • Volume 6
        • V6N1 (Oct 2002)
        • V6N2 (Nov 2002)
        • V6N3 (Dec 2002)
        • V6N4 (Jan 2003)
        • V6N5 (Feb 2003)
        • V6N6 (Mar 2003)
        • V6N7 (Apr 2003)
        • V6N8 (May 2003)
        • V6N9 (Jun 2003)
        • V6N10 (Jul 2003)
        • V6N11 (Aug 2003)
        • V6N12 (Sep 2003)
      • Volume 7
        • V7N1 (Oct 2003)
        • V7N2 (Nov 2003)
        • V7N3 (Dec 2003)
        • V7N4 (Jan 2004)
        • V7N5 (Feb 2004)
        • V7N6 (Mar 2004)
        • V7N7 (Apr 2004)
        • V7N8 (May 2004)
        • V7N9 (Jun 2004)
        • V7N10 (Jul 2004)
        • V7N11 (Aug 2004)
        • V7N12 (Sep 2004)
      • Volume 8
        • V8N1 (Oct 2004)
        • V8N2 (Nov 2004)
        • V8N3 (Dec 2004)
        • V8N4 (Jan 2005)
        • V8N5 (Feb 2005)
        • V8N6 (Mar 2005)
        • V8N7 (Apr 2005)
        • V8N8 (May 2005)
        • V8N9 (Jun 2005)
        • V8N10 (Jul 2005)
        • V8N11 (Aug 2005)
        • V8N12 (Sep 2005)
      • Volume 9
        • V9N1 (Oct 2005)
        • V9N2 (Nov 2005)
        • V9N3 (Dec 2005)
        • V9N4 (Jan 2006)
        • V9N5 (Feb 2006)
        • V9N6 (Mar 2006)
        • V9N7 (Apr 2006)
        • V9N8 (May 2006)
        • V9N9 (Jun 2006)
        • V9N10 (Jul 2006)
        • V9N11 (Aug 2006)
        • V9N12 (Sep 2006)
      • Volume 10
        • V10N1 (Oct 2006)
        • V10N2 (Nov 2006)
        • V10N3 (Dec 2006)
        • V10N4 (Jan 2007)
        • V10N5 (Feb 2007)
        • V10N6 (Mar 2007)
        • V10N7 (Apr 2007)
        • V10N8 (May 2007)
        • V10N9 (Jun 2007)
        • V10N10 (Jul 2007)
        • V10N11 (Aug 2007)
        • V10N12 (Sep 2007)
      • Volume 11
        • V11N1 (Oct 2007)
        • V11N2 (Nov 2007)
        • V11N3 (Dec 2007)
        • V11N4 (Jan 2008)
        • V11N5 (Feb 2008)
        • V11N6 (Mar 2008)
        • V11N7 (Apr 2008)
        • V11N8 (May 2008)
        • V11N9 (Jun 2008)
        • V11N10 (Jul 2008)
        • V11N11 (Aug 2008)
        • V11N12 (Sep 2008)
      • Volume 12
        • V12N1 (Oct 2008)
        • V12N2 (Nov 2008)
        • V12N3 (Dec 2008)
        • V12N4 (Jan 2009)
        • V12N5 (Feb 2009)
        • V12N6 (Mar 2009)
        • V12N7 (Apr 2009)
        • V12N8 (May 2009)
        • V12N9 (Jun 2009)
        • V12N10 (Jul 2009)
        • V12N11 (Aug 2009)
        • V12N12 (Sep 2009)
      • Volume 13
        • V13N1 (Oct 2009)
        • V13N2 (Nov 2009)
        • V13N3 (Dec 2009)
        • V13N4 (Jan 2010)
        • V13N5 (Feb 2010)
        • V13N6 (Mar 2010)
        • V13N7 (Apr 2010)
        • V13N8 (May 2010)
        • V13N9 (Jun 2010)
        • V13N10 (Jul 2010)
        • V13N11 (Aug 2010)
        • V13N12 (Sep 2010)
      • Volume 14
        • V14N1 (Oct 2010)
        • V14N2 (Nov 2010)
        • V14N3 (Dec 2010)
          • Ammunition
        • V14N4 (Jan 2011)
        • V14N5 (Feb 2011)
        • V14N6 (Mar 2011)
        • V14N7 (Apr 2011)
        • V14N8 (May 2011)
        • V14N9 (Jun 2011)
        • V14N10 (Jul 2011)
        • V14N11 (Aug 2011)
        • V14N12 (Sep 2011)
      • Volume 15
        • V15N1 (Oct 2011)
        • V15N2 (Nov 2011)
        • V15N4 (Jan 2012)
        • V15N5 (Feb 2012)
      • Volume 16
        • V16N1 (1st Quarter 2012)
        • V16N2 (2nd Quarter 2012)
        • V16N3 (3rd Quarter 2012)
        • V16N4 (4th Quarter 2012)
      • Volume 17
        • V17N1 (1st Quarter 2013)
        • V17N2 (2nd Quarter 2013)
        • V17N3 (3rd Quarter 2013)
        • V17N4 (4th Quarter 2013)
      • Volume 18
        • V18N1 (Jan Feb 2014)
        • V18N2 (Mar Apr 2014)
        • V18N3 (May Jun 2014)
        • V18N4 (Jul Aug 2014)
        • V18N5 (Sep Oct 2014)
        • V18N6 (Nov Dec 2014)
      • Volume 19
        • V19N1 (Jan 2015)
        • V19N2 (Feb Mar 2015)
        • V19N3 (Apr 2015)
        • V19N4 (May 2015)
        • V19N5 (Jun 2015)
        • V19N6 (Jul 2015)
        • V19N7 (Aug Sep 2015)
        • V19N8 (Oct 2015)
        • V19N9 (Nov 2015)
        • V19N10 (Dec 2015)
      • Volume 20
        • V20N1 (Jan 2016)
        • V20N2 (Feb Mar 2016)
        • V20N3 (Apr 2016)
        • V20N4 (May 2016)
        • V20N5 (Jun 2016)
        • V20N6 (Jul 2016)
        • V20N7 (Aug Sep 2016)
        • V20N8 (Oct 2016)
        • V20N9 (Nov 2016)
        • V20N10 (Dec 2016)
      • Volume 21
        • V21N1 (Jan 2017)
        • V21N2 (Feb Mar 2017)
        • V21N3 (Apr 2017)
        • V21N4 (May 2017)
        • V21N5 (Jun 2017)
        • V21N6 (Jul 2017)
        • V21N7 (Aug Sep 2017)
        • V21N8 (Oct 2017)
        • V21N9 (Nov 2017)
        • V21N10 (Dec 2017)
      • Volume 22
        • V22N1 (Jan 2018)
        • V22N2 (Feb 2018)
        • V22N3 (March 2018)
        • V22N4 (Apr 2018)
        • V22N5 (May 2018)
        • V22N6 (Jun Jul 2018)
        • V22N7 (Aug Sep 2018)
        • V22N8 (Oct 2018)
        • V22N9 (Nov 2018)
        • V22N10 (Dec 2018)
      • Volume 23
        • V23N1 (Jan 2019)
        • V23N2 (Feb 2019)
        • V23N3 (Mar 2019)
        • V23N4 (Apr 2019)
        • V23N5 (May 2019)
        • V23N6 (Jun Jul 2019)
        • V23N7 (Aug Sep 2019)
        • V23N8 (Oct 2019)
        • V23N9 (Nov 2019)
        • V23N10 (Dec 2019)
      • Volume 24
        • V24N1 (Jan 2020)
        • V24N2 (Feb 2020)
        • V24N3 (Mar 2020)
        • V24N4 (Apr 2020)
        • V24N5 (May 2020)
        • V24N6 (Jun Jul 2020)
        • V24N7 (Aug Sep 2020)
        • V24N8 (Oct 2020)
        • V24N9 (Nov 2020)
        • V24N10 (Dec 2020)
  • The Archive
    • Search The Archive
  • Store
    • Books
    • Back Issues
    • Merchandise
  • Podcast
  • Newsletter
  • Events
  • FrankenGun Challenge
  • About
    • About Small Arms Review
    • About Chipotle Publishing
    • Contact Us
    • Other Publications
      • Small Arms Defense Journal
  • Home
  • Articles
    • Guns & Parts
    • Suppressors
    • Optics & Thermals
    • Ammunition
    • Gear
    • News & Opinion
    • Columns
    • Museums & Factory Tours
    • ID Guides
    • Interviews
    • Event Coverage
    • Articles by Issue
      • Volume 1
        • V1N1 (Oct 1997)
        • V1N2 (Nov 1997)
        • V1N3 (Dec 1997)
        • V1N4 (Jan 1998)
        • V1N5 (Feb 1998)
        • V1N6 (Mar 1998)
        • V1N7 (Apr 1998)
        • V1N8 (May 1998)
        • V1N9 (Jun 1998)
        • V1N10 (Jul 1998)
        • V1N11 (Aug 1998)
        • V1N12 (Sep 1998)
      • Volume 2
        • V2N1 (Oct 1998)
        • V2N2 (Nov 1998)
        • V2N3 (Dec 1998)
        • V2N4 (Jan 1999)
        • V2N5 (Feb 1999)
        • V2N6 (Mar 1999)
        • V2N7 (Apr 1999)
        • V2N8 (May 1999)
        • V2N9 (Jun 1999)
        • V2N10 (Jul 1999)
        • V2N11 (Aug 1999)
        • V2N12 (Sep 1999)
      • Volume 3
        • V3N1 (Oct 1999)
        • V3N2 (Nov 1999)
        • V3N3 (Dec 1999)
        • V3N4 (Jan 2000)
        • V3N5 (Feb 2000)
        • V3N6 (Mar 2000)
        • V3N7 (Apr 2000)
        • V3N8 (May 2000)
        • V3N9 (Jun 2000)
        • V3N10 (Jul 2000)
        • V3N11 (Aug 2000)
        • V3N12 (Sep 2000)
      • Volume 4
        • V4N1 (Oct 2000)
        • V4N2 (Nov 2000)
        • V4N3 (Dec 2000)
        • V4N4 (Jan 2001)
        • V4N5 (Feb 2001)
        • V4N6 (Mar 2001)
        • V4N7 (Apr 2001)
        • V4N8 (May 2001)
        • V4N9 (Jun 2001)
        • V4N10 (Jul 2001)
        • V4N11 (Aug 2001)
        • V4N12 (Sep 2001)
      • Volume 5
        • V5N1 (Oct 2001)
        • V5N2 (Nov 2001)
        • V5N3 (Dec 2001)
        • V5N4 (Jan 2002)
        • V5N5 (Feb 2002)
        • V5N6 (Mar 2002)
        • V5N7 (Apr 2002)
        • V5N8 (May 2002)
        • V5N9 (Jun 2002)
        • V5N10 (Jul 2002)
        • V5N11 (Aug 2002)
        • V5N12 (Sep 2002)
      • Volume 6
        • V6N1 (Oct 2002)
        • V6N2 (Nov 2002)
        • V6N3 (Dec 2002)
        • V6N4 (Jan 2003)
        • V6N5 (Feb 2003)
        • V6N6 (Mar 2003)
        • V6N7 (Apr 2003)
        • V6N8 (May 2003)
        • V6N9 (Jun 2003)
        • V6N10 (Jul 2003)
        • V6N11 (Aug 2003)
        • V6N12 (Sep 2003)
      • Volume 7
        • V7N1 (Oct 2003)
        • V7N2 (Nov 2003)
        • V7N3 (Dec 2003)
        • V7N4 (Jan 2004)
        • V7N5 (Feb 2004)
        • V7N6 (Mar 2004)
        • V7N7 (Apr 2004)
        • V7N8 (May 2004)
        • V7N9 (Jun 2004)
        • V7N10 (Jul 2004)
        • V7N11 (Aug 2004)
        • V7N12 (Sep 2004)
      • Volume 8
        • V8N1 (Oct 2004)
        • V8N2 (Nov 2004)
        • V8N3 (Dec 2004)
        • V8N4 (Jan 2005)
        • V8N5 (Feb 2005)
        • V8N6 (Mar 2005)
        • V8N7 (Apr 2005)
        • V8N8 (May 2005)
        • V8N9 (Jun 2005)
        • V8N10 (Jul 2005)
        • V8N11 (Aug 2005)
        • V8N12 (Sep 2005)
      • Volume 9
        • V9N1 (Oct 2005)
        • V9N2 (Nov 2005)
        • V9N3 (Dec 2005)
        • V9N4 (Jan 2006)
        • V9N5 (Feb 2006)
        • V9N6 (Mar 2006)
        • V9N7 (Apr 2006)
        • V9N8 (May 2006)
        • V9N9 (Jun 2006)
        • V9N10 (Jul 2006)
        • V9N11 (Aug 2006)
        • V9N12 (Sep 2006)
      • Volume 10
        • V10N1 (Oct 2006)
        • V10N2 (Nov 2006)
        • V10N3 (Dec 2006)
        • V10N4 (Jan 2007)
        • V10N5 (Feb 2007)
        • V10N6 (Mar 2007)
        • V10N7 (Apr 2007)
        • V10N8 (May 2007)
        • V10N9 (Jun 2007)
        • V10N10 (Jul 2007)
        • V10N11 (Aug 2007)
        • V10N12 (Sep 2007)
      • Volume 11
        • V11N1 (Oct 2007)
        • V11N2 (Nov 2007)
        • V11N3 (Dec 2007)
        • V11N4 (Jan 2008)
        • V11N5 (Feb 2008)
        • V11N6 (Mar 2008)
        • V11N7 (Apr 2008)
        • V11N8 (May 2008)
        • V11N9 (Jun 2008)
        • V11N10 (Jul 2008)
        • V11N11 (Aug 2008)
        • V11N12 (Sep 2008)
      • Volume 12
        • V12N1 (Oct 2008)
        • V12N2 (Nov 2008)
        • V12N3 (Dec 2008)
        • V12N4 (Jan 2009)
        • V12N5 (Feb 2009)
        • V12N6 (Mar 2009)
        • V12N7 (Apr 2009)
        • V12N8 (May 2009)
        • V12N9 (Jun 2009)
        • V12N10 (Jul 2009)
        • V12N11 (Aug 2009)
        • V12N12 (Sep 2009)
      • Volume 13
        • V13N1 (Oct 2009)
        • V13N2 (Nov 2009)
        • V13N3 (Dec 2009)
        • V13N4 (Jan 2010)
        • V13N5 (Feb 2010)
        • V13N6 (Mar 2010)
        • V13N7 (Apr 2010)
        • V13N8 (May 2010)
        • V13N9 (Jun 2010)
        • V13N10 (Jul 2010)
        • V13N11 (Aug 2010)
        • V13N12 (Sep 2010)
      • Volume 14
        • V14N1 (Oct 2010)
        • V14N2 (Nov 2010)
        • V14N3 (Dec 2010)
          • Ammunition
        • V14N4 (Jan 2011)
        • V14N5 (Feb 2011)
        • V14N6 (Mar 2011)
        • V14N7 (Apr 2011)
        • V14N8 (May 2011)
        • V14N9 (Jun 2011)
        • V14N10 (Jul 2011)
        • V14N11 (Aug 2011)
        • V14N12 (Sep 2011)
      • Volume 15
        • V15N1 (Oct 2011)
        • V15N2 (Nov 2011)
        • V15N4 (Jan 2012)
        • V15N5 (Feb 2012)
      • Volume 16
        • V16N1 (1st Quarter 2012)
        • V16N2 (2nd Quarter 2012)
        • V16N3 (3rd Quarter 2012)
        • V16N4 (4th Quarter 2012)
      • Volume 17
        • V17N1 (1st Quarter 2013)
        • V17N2 (2nd Quarter 2013)
        • V17N3 (3rd Quarter 2013)
        • V17N4 (4th Quarter 2013)
      • Volume 18
        • V18N1 (Jan Feb 2014)
        • V18N2 (Mar Apr 2014)
        • V18N3 (May Jun 2014)
        • V18N4 (Jul Aug 2014)
        • V18N5 (Sep Oct 2014)
        • V18N6 (Nov Dec 2014)
      • Volume 19
        • V19N1 (Jan 2015)
        • V19N2 (Feb Mar 2015)
        • V19N3 (Apr 2015)
        • V19N4 (May 2015)
        • V19N5 (Jun 2015)
        • V19N6 (Jul 2015)
        • V19N7 (Aug Sep 2015)
        • V19N8 (Oct 2015)
        • V19N9 (Nov 2015)
        • V19N10 (Dec 2015)
      • Volume 20
        • V20N1 (Jan 2016)
        • V20N2 (Feb Mar 2016)
        • V20N3 (Apr 2016)
        • V20N4 (May 2016)
        • V20N5 (Jun 2016)
        • V20N6 (Jul 2016)
        • V20N7 (Aug Sep 2016)
        • V20N8 (Oct 2016)
        • V20N9 (Nov 2016)
        • V20N10 (Dec 2016)
      • Volume 21
        • V21N1 (Jan 2017)
        • V21N2 (Feb Mar 2017)
        • V21N3 (Apr 2017)
        • V21N4 (May 2017)
        • V21N5 (Jun 2017)
        • V21N6 (Jul 2017)
        • V21N7 (Aug Sep 2017)
        • V21N8 (Oct 2017)
        • V21N9 (Nov 2017)
        • V21N10 (Dec 2017)
      • Volume 22
        • V22N1 (Jan 2018)
        • V22N2 (Feb 2018)
        • V22N3 (March 2018)
        • V22N4 (Apr 2018)
        • V22N5 (May 2018)
        • V22N6 (Jun Jul 2018)
        • V22N7 (Aug Sep 2018)
        • V22N8 (Oct 2018)
        • V22N9 (Nov 2018)
        • V22N10 (Dec 2018)
      • Volume 23
        • V23N1 (Jan 2019)
        • V23N2 (Feb 2019)
        • V23N3 (Mar 2019)
        • V23N4 (Apr 2019)
        • V23N5 (May 2019)
        • V23N6 (Jun Jul 2019)
        • V23N7 (Aug Sep 2019)
        • V23N8 (Oct 2019)
        • V23N9 (Nov 2019)
        • V23N10 (Dec 2019)
      • Volume 24
        • V24N1 (Jan 2020)
        • V24N2 (Feb 2020)
        • V24N3 (Mar 2020)
        • V24N4 (Apr 2020)
        • V24N5 (May 2020)
        • V24N6 (Jun Jul 2020)
        • V24N7 (Aug Sep 2020)
        • V24N8 (Oct 2020)
        • V24N9 (Nov 2020)
        • V24N10 (Dec 2020)
  • The Archive
    • Search The Archive
  • Store
    • Books
    • Back Issues
    • Merchandise
  • Podcast
  • Newsletter
  • Events
  • FrankenGun Challenge
  • About
    • About Small Arms Review
    • About Chipotle Publishing
    • Contact Us
    • Other Publications
      • Small Arms Defense Journal
No Result
View All Result
Small Arms Review
No Result
View All Result
Home Articles

Legally Armed: V19N2

SAR Staff by SAR Staff
August 2, 2022
in Articles, Articles by Issue, Columns, News & Opinion, Search by Issue, V19N2 (Feb Mar 2015), Volume 19
Legally Armed: V19N1
Share on FacebookShare on Twitter

By Teresa G. Ficaretta, Esq. & Johanna Reeves, Esq.

Legal News From The Nation’s Capital

Manufacturing NFA Firearms Under Government Contract: Exemptions Under Federal Law

U.S. government agencies often enter into contracts with federal firearms licensees (FFLs) to manufacture for the customer’s official government use, machine guns, destructive devices, and other certain firearms subject to the National Firearms Act (NFA Firearms). This article will address first the exemptions available to such manufacturers under the Gun Control Act of 1968 (GCA), the NFA, and the federal explosives laws, and the requirements for qualifying for such exemptions. The article will then discuss what happens when the federal government customer rejects the products manufactured and the manufacturer wishes to sell them commercially.

GCA Exemptions

As many readers are already aware, the GCA imposes licensing, marking, record keeping, and interstate movement requirements on all “firearms,” which include NFA Firearms. Section 925(a)(1) of the GCA provides for a general exemption from the statute’s transportation, shipment, receipt, possession and import provisions for all firearms manufactured for and distributed to federal, state, or local government agencies. However, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) generally interprets Section 925(a)(1) as applying only to activities government agencies undertake themselves and not to the activities of private government contractors. Further, ATF generally will not waive marking requirements under 27 C.F.R. 478.92, but it may approve a variance to manufacturers under a government contract for alternate methods of marking if they will not interfere with administration of the GCA, including firearms tracing.

NFA Exemptions

In addition to the GCA requirements and restrictions, NFA Firearms are controlled through a tax and registration scheme. First, all persons who wish to engage in the business of manufacturing or importing NFA Firearms must be “qualified” to do so. Qualification requires the appropriate FFL and annual payment of a Special (Occupational) Tax (SOT). Second, all NFA Firearms manufactured or imported must be timely registered with ATF on a Form 2 Notice. Non-FFL individuals who wish to make an NFA Firearm (except machine guns) must apply for prior ATF approval on a Form 1 and pay a $200 tax for each NFA Firearm made. SOTs are exempt from the making tax. Finally, every NFA Firearm requires ATF approval before it can be transferred to another party. The NFA also imposes marking requirements on firearms similar to those in the GCA.

The NFA exempts persons who conduct business exclusively with the federal government from the SOT and other provisions of the NFA. However, this exemption is not automatic and applicants must first prove to ATF that the business is exclusively with or on behalf of the federal government. In addition, ATF also has the discretion to relieve any person manufacturing firearms for or on behalf of the federal government from complying with any provision of ATF’s regulations. However, such relief must be sought from ATF in writing.

Federal Explosives Laws

The Federal explosives laws in 18 U.S.C. Chapter 40 impose licensing, storage, record keeping, and distribution requirements on persons who manufacture, import, deal in, or receive explosive materials. The term “explosive materials” is defined to mean explosives, blasting agents, and detonators. ATF’s List of Explosive Materials is published annually in the Federal Register and can be found on ATF’s website at www.atf.gov.

All persons who engage in the business of manufacturing, importing, or dealing in explosive materials must obtain a license from ATF; make and retain records of their manufacture, importation, purchase, distribution, or receipt of explosive materials; and store explosives in accordance with the regulations. The statute provides exemptions from most of the provisions of Chapter 40 for explosive materials manufactured under the regulation of the military department of the United States or their distribution to or storage or possession by the military or other Federal agency. 18 U.S.C. 845(a)(6). Another provision exempts the transportation, shipment, receipt, or importation of explosive materials for delivery to any agency of the United States or to any State or political subdivision thereof. 18 U.S.C. § 845(a)(3).

ATF regulations implementing the Federal explosives laws require identification markings for explosive materials intended for sale or distribution. Markings must include the name of the manufacturer and the date and shift of manufacture. The required marks of identification must be placed on each cartridge, bag, or other immediate container of explosives materials or outside containers used for the packaging thereof. Regulations provide for marking variances in the same manner as in GCA regulations.

Most of the requirements in ATF’s explosives regulations do not apply to “the manufacture under the regulation of the U.S. military department of explosive materials for or their distribution to or possession by, military services or other Federal agencies.” ATF interprets this provision as applying to contractors. Accordingly, manufacture of explosives under contract with the Department of Defense is exempt from the record keeping, marking, distribution, and storage requirements of the Federal explosives laws. ATF takes the position that manufacture of explosives under contract with Federal agencies other than DOD is exempt from the provisions of Chapter 40, with the exception of marking and record keeping requirements. ATF’s permission to utilize these statutory exemptions is not required.

Practical Application of the Exemptions

Persons manufacturing NFA firearms under contract with the Department of Defense or other federal agency are not exempt from the licensing, marking, record keeping and other requirements of the GCA or NFA. This is because according to ATF, contractors do not stand in the shoes of the government and must therefore comply with all requirements of the law. If a government contract specifies markings that do not comply with the regulatory marking requirements, the manufacturer must submit a request for marking variance to ATF. ATF’s current processing time for marking variances is 3 months, so it is important to factor this into the production schedule.

The NFA regulatory exemption in 27 C.F.R. 479.33, which we discussed above, authorizes manufacturers to be excused from most of the provisions of the statute, including payment of the SOT, registration, and transfer applications when the NFA Firearms are manufactured exclusively for the United States. Remember, however, that the exemption is not automatic and requires submission of a letter application to ATF. Manufacturers who wish to utilize this exemption should apply several months in advance of production to give ATF time to process the request. If a marking variance is needed, a separate marking variance request should be submitted to ATF’s Firearms and Ammunition Technology Division. Remember, however, that it is unlikely ATF will completely waive the marking requirements of the law, as this renders the firearms untraceable in the event they are diverted from lawful commerce. But ATF will generally grant reasonable requests to depart from the minimum size requirements, location of markings, and content of the markings when required by a specific government contract.

Unlike the NFA, the federal explosives laws do not require advance approval for exemption from the requirements, but the applicable exemptions will depend on the federal agency for whom the explosives are made. This breaks down as follows: (1) the regulatory marking, storage, and record keeping requirements will not apply as long as the product is manufactured for and distributed to the Department of Defense; (2) for explosives manufactured under contract with a federal agency other than DOD, the manufacturer must still adhere to the marking and record keeping requirements, but be exempt from the other requirements. A manufacturer who is producing product for both a federal government customer and for the commercial market should take care to segregate the product lines to avoid comingling and accidental violation of ATF’s regulations.

Failed Performance Testing and Commercial Sale

Most Federal government contracts specify performance testing standards that products must meet before the government will accept delivery from the vendor. What happens to products that fail the performance tests, and is it possible to sell them commercially? The answer to this question is complex and depends on a number of factors within ATF’s control.

As stated above, all requirements of the GCA continue to apply to government contractors, so selling products commercially will not change those legal requirements. Under the federal explosives laws, once products are no longer manufactured for and distributed to the Department of Defense or another federal agency, the exemptions in the statute cease to apply. Explosive materials, including those contained in grenades, mines, bombs, and other destructive devices, must be stored in accordance with regulations in 27 C.F.R. Part 555, Subpart K. Records relating to such explosive materials must be created and maintained in accordance with 27 C.F.R. Part 555, Subpart G, and products must be marked in accordance with 27 C.F.R. 555.109.

The most difficult issues raised by a change in use arise under the NFA. If a manufacturer obtained from ATF an exemption from registration under 27 C.F.R. 479.33, the firearms originally produced for the government customer will not be registered. The firearms may also not be marked in accordance with the GCA or NFA. However, pursuant to the GCA, firearms may not be commercially distributed until marked appropriately and, in the case of NFA Firearms, registered under the NFA.

Regulations require that manufacturers register all NFA Firearms on a Form 2 no later than close of business following the day of manufacture. If a manufacturer submits a Form 2 with a date of manufacture that is weeks, months, or years earlier, it is likely the NFA Branch will either deny or not process the form because it will be apparent the manufacturer violated the regulations by not timely registering the firearms. If a manufacturer submits a Form 2 indicating a date of manufacture that is false, the manufacturer will be making a knowing false statement in violation of 26 U.S.C. 5861(l). Such violations are felonies and subject the firearms to seizure and forfeiture.

Manufacturers in this situation have two options for complying with the law. The first is to submit a variance request to ATF’s NFA Branch requesting approval to submit a late Form 2 for the firearms in question. If ATF approves a variance for late registration, the firearms must then be marked appropriately. If ATF will not approve a variance request for late filing of the Form 2, destruction of the firearms to avoid violating the law may be the only available option.

Planning for Possible Commercial Sale

Manufacturers may wish to plan for possible commercial distribution of unregistered NFA firearms that fail product testing standards by requesting variance approval for late registration prior to their manufacture. Such a variance request would be submitted pursuant to 27 C.F.R. 479.26. The request would seek approval to submit Forms 2 for products manufactured for a federal agency on a tardy basis, within a specified timeframe (e.g., close of the next business day) after they have failed product testing standards specified in the government contract. If ATF approves such a request, submission of the Forms 2 later than close of the business day following the date of manufacture would not violate the law or regulations.

The other way to prepare for possible commercial sale is to register and mark all firearms manufactured under the government contract. If the government contract specifies limited markings (and a variance has been granted for such markings by ATF), manufacturers may need to add markings to the firearms to comply with the regulatory marking requirements for commercially distributed firearms. Registering and marking all firearms in advance will also slow down the process of transferring firearms to a government customer, as a transfer application must be submitted to and approved by ATF. However, this option should be considered to create an alternate market for firearms that fail government product testing standards.

Conclusion

Licensed manufacturers entering into contracts with federal agencies for the manufacture and distribution of NFA firearms should be aware of the statutory exemptions under the federal firearms and explosives laws. Unregistered NFA firearms and firearms that are not marked in accordance with the law may present challenges in the event the manufacturer wishes to sell the firearms commercially.

The information in this article is for informational purposes only and is not intended to be construed or used as legal advice.

This article first appeared in Small Arms Review V19N2 (March 2015)

Author

  • SAR Staff
    SAR Staff

    View all posts

Tags: 2015Johanna ReevesLegally ArmedMARCH 2015Teresa G. FicarettaV19N2
Previous Post

NFATCA Report: V19N2

Next Post

The Noreen Firearms ULR .50 BMG

Next Post
The Noreen Firearms ULR .50 BMG

The Noreen Firearms ULR .50 BMG

TRENDING STORIES

  • U.S. NAVY MK18 MOD O CUSTOM CLOSE QUARTER COMBAT WEAPON FOR THE SEAFARING SERVICE

    U.S. NAVY MK18 MOD O CUSTOM CLOSE QUARTER COMBAT WEAPON FOR THE SEAFARING SERVICE

    0 shares
    Share 0 Tweet 0
  • Recreational Use Of 40MM Grenade Launchers

    0 shares
    Share 0 Tweet 0
  • Customizing the Already Custom SIG P320 Spectre Comp

    0 shares
    Share 0 Tweet 0
  • Col. Rex Applegate: The Knife Designs of a Close-Combat Legend

    0 shares
    Share 0 Tweet 0
  • Evolution of the U.S. Grenade Launcher From World War II to Today’s Conflicts

    0 shares
    Share 0 Tweet 0
  • Trending
  • Comments
  • Latest
U.S. NAVY MK18 MOD O CUSTOM CLOSE QUARTER COMBAT WEAPON FOR THE SEAFARING SERVICE

U.S. NAVY MK18 MOD O CUSTOM CLOSE QUARTER COMBAT WEAPON FOR THE SEAFARING SERVICE

Recreational Use Of 40MM Grenade Launchers

Recreational Use Of 40MM Grenade Launchers

SIG Spectre Comp with AXG Grip Module

Customizing the Already Custom SIG P320 Spectre Comp

Col. Rex Applegate: The Knife Designs of a Close-Combat Legend

Col. Rex Applegate: The Knife Designs of a Close-Combat Legend

New Review: V19N1

New Review: V23N3

SAR|Special

SAR|Special

The Grand Power Q100

The Grand Power Q100

A Fading Star: The star S135 Submachine Gun, That is

A Fading Star: The star S135 Submachine Gun, That is

The Iron Door: Soviet Russian Weapons Designers Stop the Germans in Their Tracks

The Iron Door: Soviet Russian Weapons Designers Stop the Germans in Their Tracks

The American FN FAL Rifle: In Search of the Perfect Lightweight Rifle

The American FN FAL Rifle: In Search of the Perfect Lightweight Rifle

Ahead of Its Time: British Fosbery Pump-Action Shotgun with “Stoner” Bolt

Ahead of Its Time: British Fosbery Pump-Action Shotgun with “Stoner” Bolt

The Big Bang! : Great American Fun at the 2018 Big Sandy Machine Gun Shoot in Wikieup, AZ

The Big Bang! : Great American Fun at the 2018 Big Sandy Machine Gun Shoot in Wikieup, AZ

QUICK LINKS

  • About Chipotle Publishing
  • About Small Arms Review
  • Advertise with Us
  • Write for Us

CONTACT DETAILS

  • Phone: +1 (702) 565-0746
  • E-mail: office@smallarmsreview.com
  • Web: www.chipotlepublishing.com
  • Chipotle Publishing, LLC 631 N. Stephanie St., No. 282, Henderson, NV 89014
Small Arms Review

FOLLOW US

  • Privacy Policy
  • Disclaimer

© 2022 Chipotle Publishing | All Rights Reserved

No Result
View All Result
  • Home
  • Articles
    • Guns & Parts
    • Suppressors
    • Optics & Thermals
    • Ammunition
    • Gear
    • News & Opinion
    • Columns
    • Museums & Factory Tours
    • ID Guides
    • Interviews
    • Event Coverage
    • Articles by Issue
      • Volume 1
      • Volume 2
      • Volume 3
      • Volume 4
      • Volume 5
      • Volume 6
      • Volume 7
      • Volume 8
      • Volume 9
      • Volume 10
      • Volume 11
      • Volume 12
      • Volume 13
      • Volume 14
      • Volume 15
      • Volume 16
      • Volume 17
      • Volume 18
      • Volume 19
      • Volume 20
      • Volume 21
      • Volume 22
      • Volume 23
      • Volume 24
  • The Archive
    • Search The Archive
  • Store
    • Books
    • Back Issues
    • Merchandise
  • Podcast
  • Newsletter
  • Events
  • FrankenGun Challenge
  • About
    • About Small Arms Review
    • About Chipotle Publishing
    • Contact Us
    • Other Publications
      • Small Arms Defense Journal

© 2022 Chipotle Publishing | All Rights Reserved

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.

Subscribe To Our Weekly Newsletter

Are you in the know?
Stay up to date with the latest articles.

Facebook-f Linkedin Instagram

Redirecting to External Website

You are leaving the Small Arms Review website and will be redirected to an external link in a 5 Seconds.
VISIT NOW!