Legally Armed: V23N3

By Johanna Reeves, Esq.

How Can a U.S. Company Import U.S.-Origin Military Surplus Firearms?

In continuation of my previous “Legally Armed” column, “How U.S. Foreign Policy and National Security Concerns Impact International Trade,” Small Arms Review, Vol. 23 No. 1 (January 2019), I thought I would delve into the complex issue of the barriers that prevent private companies from importing U.S.-origin firearms back into the United States for commercial sale. This is a surprisingly complex area where law and politics intersect with international trade and the commercial market of military surplus firearms.

There is a tremendous amount of interest among history buffs and firearms enthusiasts in the weapons of World War II and other international conflicts in which the United States was involved. Some examples include the M1 Garand, the M1 Carbine and the 1911 pistol. At the end of these conflicts, much of the most desirable materiel may have been left overseas or given to foreign governments. However, since 2013 private entities have been prohibited from importing these pieces of history back into the United States for sale to the public. This Obama-era block to private industry remains in place because of lack of action on the part of both the Republican-controlled Congress and President Trump.

How can such a prohibition exist? We are talking about U.S.-made products, so why can’t a private importer bring these back into the United States for the domestic collectors’ market if the foreign government doesn’t want them anymore?

As many readers may be painfully aware, there is an intricate process that must be followed to import any article of U.S. origin. Further, surplus military articles are subject to very high government scrutiny for foreign policy implications and the potential impact on public safety. Inevitably, political motivations also find a way into the discussion.

A. Overview of Applicable U.S. Export Laws

First, we must briefly review the U.S. laws governing the original sale and export to the foreign party. In general terms, U.S. law is structured to prevent firearms and other defense articles from being exported unless the foreign recipient promises it will not transfer, dispose or change end-use without prior permission from the U.S. Government. This restriction on transfers, change in end-use or destination applies to firearms obtained through U.S. Government Foreign Military Sales Programs, Grants (Military Assistance Program or Excess Defense Article) and Direct Commercial Sales (DCS), even when the foreign party wants to sell the firearms to a private U.S. entity many years later for import back into the United States.

Arms Export Control Act (AECA). “In furtherance of world peace and the security and foreign policy of the United States,” the Arms Export Control Act (AECA) grants the president the authority to control the export and import of classified and unclassified defense articles and defense services and to provide foreign policy guidance to persons of the United States involved in the export and import of such articles and services. The AECA restricts retransfers of U.S.-origin defense articles by requiring foreign recipients of U.S.-origin defense articles, whether by sale or lease, to request permission from the State Department before it resells, retransfers or re-exports such articles.

Foreign Assistance Act (FAA). The FAA governs defense articles provided to foreign countries on a grant basis. Like the AECA, the FAA places end-use restrictions on foreign recipients of weapons and gives a right of first refusal to the U.S. Government for any weapon a foreign government wants to sell. The FAA also requires the U.S. Government receive the net proceeds from any sale of defense articles provided as aid to a foreign country, unless the State Department waives this requirement.

Also pertinent to our discussion is Executive Order 13637 (“EO 13637”), under which the president delegated to various agencies the functions conferred under the AECA. Under Section 38 of the AECA (Control of Arms Exports and Imports), the functions related to exports, temporary imports and brokering of defense articles and services are delegated to the Secretary of State, who in turn delegated down to the Deputy Assistant Secretary for Political-Military Affairs (PM). The PM oversees the Directorate of Defense Trade Controls (DDTC) and the Office of Regional Security and Arms Transfers (PM/RSAT). DDTC administers the International Traffic in Arms Regulations (ITAR), the registration and licensing regulations governing exports, temporary imports and brokering of defense articles and defense services.

The AECA functions related to permanent imports of defense articles and services are delegated to the Attorney General. The Attorney General in turn has delegated administration of the permanent import regulations in 27 C.F.R. Chapter II, Part 447 to the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). However, EO 13637 makes clear that “[i]n carrying out such functions, the Attorney General shall be guided by the views of the Secretary of State on matters affecting world peace, and the external security and foreign policy of the United States.”

The process for a private entity to bring U.S.-origin military surplus back into the United States consists of two steps: (1) the foreign owner must obtain approval to transfer the firearms to the U.S. importer; and (2) the importer must obtain approval to enter the firearms into the commerce of the United States. You may be thinking, “It’s only two steps, so how hard can it be?” Let me show you.

B. Step One: Obtain Approval for Transfer to U.S. Importer

The first hurdle an importer faces to bringing U.S.-origin military surplus firearms back into the United States is obtaining approval from the Department of State for the transfer from the foreign owner to the U.S. importer. As mentioned above, U.S. Government approval is required before a foreign end-user can transfer, sell, dispose of or change end use of any U.S. origin defense article. This rule applies even when the proposed transferee is a U.S. company interested in bringing the firearms back into the United States.

The transfer approval process begins with the foreign government owner submitting a retransfer request to the State Department, not the U.S. importer. The Bureau of Political-Military Affairs handles all retransfer requests, and the responsibility is divided as follows: (i) for exports undertaken under a foreign military or government-to-government sales program, the retransfer requests should be submitted to PM-RSAT; (ii) for exports that were direct commercial sales, retransfer requests should be submitted to DDTC.

The process for obtaining State Department approval for retransfers of U.S.-origin firearms is anything but easy. Often, the private importer cannot even get the process started because so little is known about how the firearms got to the foreign government in the first place. This is especially true for the curio or relic firearms because so much time has passed since the original export. Regardless, this history is vital to determine what retransfer restrictions attached to the firearms (remember the retransfer restrictions are created at the time of export). Without knowing the terms of the original export, it is virtually impossible to know how to go about obtaining the retransfer approval. In fact, without sufficient evidence to the contrary, for example a bill of sale, conveyance document or export license, the State Department will presume undocumented firearms to be of Grant origin.

All retransfer requests undergo an extensive interagency review prior to being recommended for approval or denial to the Assistant Secretary for Political-Military Affairs or the Under Secretary for Arms Control and International Security. This whole process can take years, and there is no guarantee that the State Department will ultimately approve the retransfer.

C. Step Two: Get ATF Approval for Permanent Import into the Commerce of the United States

If the State Department finally does approve the retransfer, the process then turns to the U.S. importer, who must prepare the Application and Permit for Importation of Firearms, Ammunition and Defense Articles, also known as the “ATF Form 6.”

Generally, the Gun Control Act of 1968 prohibits importation of surplus military firearms unless the import is for government or law enforcement end-users. ATF defines a surplus military firearm as any firearm that belonged to a regular or irregular (e.g., militia) military force at any time. See Firearms-Guides-Importation & Verification of Firearms, Ammunition and Implements of War–Surplus Military (available at atf.gov/firearms/firearms-guides-importation-verification-firearms-ammunition-and-implements-war-surplus, last visited Dec. 14, 2018).

Curio or relic firearms, however, are exempt from this prohibition. To qualify for the curio or relic designation, a firearm must fall into one of the following three categories: (1) manufactured at least 50 years prior to the current date (this does not include replicas); (2) certified by the curator of a municipal, State, or Federal museum which exhibits firearms to be curios or relics of museum interest; or (3) derive a substantial part of its monetary value because the firearm is novel, rare, bizarre or associated with some historical figure, period or event. This last category requires proof of qualification by evidence of present value and that like firearms are not available except as collectors’ items or that the value of like firearms available in ordinary commercial channels is substantially less.

ATF stated policy has been to return without action any application to import U.S. origin curio or relic military surplus firearms unless the application includes a copy of the State Department retransfer authorization given to the foreign supplier. But is ATF obligated to approve an import permit for U.S.-origin firearms once the State Department has approved the retransfer? As at least one case illustrates (discussed below), State Department transfer authorization does not guarantee the importer will be able to enter the firearms into the commerce of the United States for resale.

D. Notable Cases and Recent Developments

To illustrate the difficulties in importing U.S.-origin firearms, let us review a case that gained significant media and political attention a few years ago: the case of the Korean M1 Garands and M1 carbines, which the United States sold to the South Korean government for use in the Korean War. Both types of rifles are over 50 years old and obsolete to the South Korean Government, but can bring in revenue if sold to United States importers because of the significant market of U.S. collectors and firearms enthusiasts. Because of the age of their manufacture, these M1 Garands and carbines qualify as “curio or relic.”

While George W. Bush was still president, the South Korean government submitted to the State Department a request to transfer a total of 857,470 rifles (87,310 M1 Garands and 770,160 M1 carbines) to U.S. importers. This request went through an interagency review process, but it was not until May 2009 that the State Department granted approval for the South Korean government to transfer the M1 Garands and carbines. Soon after the approval, the new Obama Administration expressed concerns, including trepidation that transferring the M1 carbines into the United States, particularly in the stated quantities, posed a significant law enforcement and public safety risk. These concerns ultimately led to the State Department rescinding its May 2009 decision to allow South Korea to transfer the M1 firearms.

In 2012, however, there appeared to be a break in the case. On January 18, the Korea Times reported that according to Lee Sun-chul, the Korean deputy defense minister for force and resources management, the U.S. Government had agreed to allow the importation of 86,000 M1 Garand rifles from Seoul. The article cited to an approval letter from the United States, dated September 2, 2011. 600,000 M1 carbines were rejected for import, reportedly because of detachable high capacity magazines.

The prospective import of 86,000 Garands was put on hold indefinitely on August 29, 2013, when President Obama announced a new policy of prohibiting commercial re-importation of U.S.-origin surplus military firearms that the United States supplied to foreign governments, either as direct commercial sales or through foreign military sales or military assistance programs. With no action from President Trump to revoke this policy, the prohibition remains in effect.

It is important to point out that the administrative blocks to the import industry from bringing in military surplus firearms back into the United States do not affect the ability of the Civilian Marksmanship Program (CMP) from obtaining surplus firearms, such as the M1 Garand or 1911 pistols. The CMP is able to acquire U.S. surplus military firearms, including those from overseas, from the U.S. Army. The CMP then refurbishes the firearms and sells them at retail to the public participating in competitive shooting programs. U.S. citizens can purchase these firearms from the CMP, provided they are not prohibited from owning a firearm under the GCA and they are a member of an affiliated club.

On April 7, 2017, Gina Johnson, General Manager of the CMP South operations in Alabama, announced the CMP would be acquiring 86,000 M1 Garands, which the U.S. Army was due to receive back from the Philippines Government. It is unclear when these firearms will be imported, if they have not already been shipped to the United States.

On the legislative front, there have been repeated stabs at passing the “Collectible Firearms Protection Act,” although none successful. The bill would amend the AECA to allow the importation of certain curio and relic firearms into the United States by a licensed importer without the requirement of an authorization from the Department of State upon certification to the Department of Justice that such firearms are lawfully possessed under the laws of the exporting country.

The first introduction was in 2009 by Rep. Cynthia Lummis (R-WY), then again in 2011, 2013 and 2015. The most recent attempt was by Rep. Doug Collins (R-GA) in 2017; each time the bill stalled in committee. What is even more telling is the number of co-sponsors. In 2011 there were 142 co-sponsors. In 2013, the number was only 38, and in 2017 only 3 co-sponsors joined.

So as we near the start of a new Congress, where Democrats will once again control the House, the Collectible Firearms Protection Act is likely a dead issue. In the remaining two years of President Trump’s first term, it is possible he may take action to lift the prohibition against private industry from importing U.S.-origin military surplus firearms. Until then, at least this part of the market is out of reach.

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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 15 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. Since 2011, Johanna has served as Executive Director for the Firearms and Ammunition Import/Export Roundtable (F.A.I.R.) Trade Group (fairtradegroup.org). She has also served as a member of the Defense Trade Advisory Group (DTAG) since 2016. Johanna can be reached at jreeves@reevesdola.com or 202-715-9941.