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 After more than 18 years, the U.S. Department of State rescinded its policy of denial that prevented U.S. companies from exporting suppressors to most commercial end-users.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 jreeves@reevesdola.com or 202-715-9941.

Most readers of this column will have already reviewed many articles regarding the “move” of many firearms and firearms-related articles to the Commerce Department in terms of regulation and administration. This move was universally lauded for eliminating much of the cumbersome and expensive International Trafficking in Arms Regulations (ITAR), as administered by the U.S. Department of State (State Department / State). This migration was many years (decades) in the making and did, in fact, make life easier for many.

Unfortunately, the move did not make life easier for those who manufacture National Firearms Act (NFA) items such as suppressors and machine guns. Manufacturers of those items are still required to register with the State Department’s Directorate of Defense Trade Controls (DDTC), regardless of whether the manufactured items are destined for international commerce. Many manufacturers are aware of the onerous process of maintaining compliance under Department of State control. Fortunately, State has rolled out its new online system, the Defense Export Control and Compliance System (DECCS). DECCS will replace DTRA, DTrade, EFS, ELLIE and MARY, providing users access to a number of DDTC business applications through a single, cloud-based portal. Currently, the Registration, Licensing, Advisory Opinions and Commodity Jurisdictions applications are live in the DECCS Portal.

Many manufacturers of NFA items were grudgingly drawn into the regimented and confounding world of ITAR registration with the Department of State many years ago, and many NFA manufacturers chose to simply ignore the need for registration, despite the dire warnings regarding the consequences of such malfeasance. Frankly, State’s old system was cumbersome and overly complicated. One had to download approved electronic documents; electronically complete some portions of those documents; print out those documents; sign those documents; scan the now-signed documents; save and then submit those documents; and then head on down to your local bank to submit your onerous payment via ACH or wire (though State loved calling it “FedWire”), all the while, cross-referencing applications and payments with all sorts of arcane reference numbers. All that appears to be buried. Applying for a DECCS account is fairly straightforward at deccs.pmddtc.state.gov/deccs. It is also quite secure. Users will immediately notice that the system employs two-factor authentication for each login to the system. This can be done via a smart phone application or via an automated dialer service.

Once logged into the system, users can go directly to the registration programs via pull-down menus. The ITAR registration is significantly streamlined, and users are walked through each step of the process, including identification, documentation and certification. Of note is that documentation is more rigorous and includes items such as articles of incorporation. All of this can be done online and electronically. No printing and rescanning.

The best part? The base registration fee is currently, as of the time of the writing of this column, only $500 (as opposed to $2,250) and can be paid for with a credit card after the registration has been approved! No expensive trip to the bank to make the payment. The NFATCA has railed for ages against the onerous registration scheme employed by State for NFA manufacturers that do not export and have no intention of doing so. We have worked hand-in-hand with other organizations in the long process of reducing the impact of ITAR registration. The current process is a much appreciated first step in reducing the regulatory burden, but we still have a long way to go! We have been committed to assisting the NFA community for almost 15 years. Our goal is to help our community act responsibly and safely within the law. We work with legislators and regulators to expand NFA opportunities for everyone. We thank you for your continued support. Thank you and don’t forget to sign up or renew your membership today at nfatca.org/join.htm.

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.

Firearms importers and exporters were afforded the opportunity of raising their concerns with international regulation of the firearms industry during the recent United Nations arms conference held last summer.

The industry addressed U.N. delegates through remarks made by our Firearms Attorney, who represents the import/export community’s two main trade organizations – the National Firearms Act Trade & Collectors Association (NFATCA) and the F.A.I.R. Trade Group. The U.N.’s ‘Conference to Review Progress Made in the Implementation of the Programme of Action to Prevent, Combat, and Eradicate the Illicit Trade in Small Arms and Light Weapons in All Its Aspects’ has raised great concern on the part of industry as an attempt by the world body to institute global controls on its activities and those of its consumers.

“Our membership is concerned with the enactment of overly broad international regulatory programs that unnecessarily and adversely impact the legal trade in small arms and light weapons instead of focusing on reducing the illicit trade in small arms and light weapons,” our Firearms Attorney said. In addressing the ‘blanket approach’ taken by the U.N. to encompass all firearms in its regulatory scheme, our Firearms Attorney added that “the definitions currently utilized by the international community when referring to small arms and light weapons do not adequately distinguish between civilian and military firearms. Any policy that is considered should generally be aimed toward fully automatic military firearms.”

Noting that he himself is a registered broker, our Firearms Attorney urged that consideration of the world body of the definition of an “arms broker” not be as stringent as that in the U.S.

“The ITAR (International Traffic in Arms Regulations), the regulatory regime in the U.S., was recently amended,” our Firearms Attorney noted, “to change the definition of brokering activities to include one or more predicate acts. By making it clear that simply one act, such as the financing of a defense article, constitutes brokering under U.S. law, and further, by these same regulations, stating that foreign persons ‘subject to U.S. jurisdiction’ are captured by brokering, you can see that a wide variety of people and conduct can be subject to regulation.”

Our Firearms Attorney argued that such a model is not necessary at the international level nor cost effective in attempting to curtail potential core problems in the small arms trade. He recommended that future U.N. work in this area be narrowly tailored to specific problem areas.

Multi-Jurisdictional Overlap

Our Firearms Attorney also addressed another potential problem area with U.N. regulation of brokering: multi-jurisdictional overlap.

Mentioning that current U.S. law extends U.S. jurisdiction very broadly in regard to brokering, our Firearms Attorney said, “If nations extend their jurisdictions in an overbroad manner, brokers will not be able to conduct transactions due to the sheer number of countries claiming jurisdiction over the broker’s conduct. A broker should only be subject to the jurisdiction of the nation of which he is a national or the nation in which he is truly conducting brokering business.”

Our Firearms Attorney also offered the industry’s view on the topic of establishing brokering norms. Before such norms can be established, he advised, there must be effective import and export regimes established in each nation involved in the shipment, transportation and receipt of firearms.

“Currently, too many nations have weak or non-existent import and export laws,” he said. “Addressing this issue before pursuing further brokering norms is key to the success of eliminating the illicit trade in small arms and light weapons.”

“While some believe that brokers are the primary force behind the movement of firearms, in most cases they are merely the facilitators of sales transactions between two interested parties already governed by the laws of the sending and receiving states. Therefore, brokering norms should be focused on who is able to facilitate a transaction instead of how the firearms themselves are being moved. The movement of the firearms is typically handled by the underlying parties to the transaction and is associated with a particular state. Because of this, placing the burden on brokers through the use of brokering norms will not be effective if the underlying import and export controls of each individual state are the source of the regulatory concern.

“When the preliminary step of improving the import and export regimes in each nation is accomplished, then brokering norms may be considered,” our Firearms Attorney continued. He went on to call for “reasonable” brokering norms that do not interrupt or interfere with the legal trade. “This necessitates that the definition of a brokering transaction be narrowly tailored to ensure that a transaction is defined as an actual transaction rather than, for example, the mere discussion of a possible future transaction.”

The Group of Government Experts within the U.N. will hold a fall meeting on the subject of brokering. Our Firearms Attorney closed by asking that they first consider the issue of establishing effective import and export norms within individual states before recommending international brokering norms.

The subject of international regulation of marking and tracing of firearms was addressed in remarks prepared by Richard Patterson of the Sporting Arms & Ammunition Manufacturer’s Institute (SAAMI) as read by attorney Thomas Mason who is active in the World Forum on the Future of Sport Shooting Activities.

SAAMI views the idea of marking the bullet and/or the case with a serial number (as has been advanced at the U.N.) “flawed” as it would not be possible to “ensure every number on every cartridge matched every number on every box” using the industry’s current production programs. It was added ammunition makers could not afford the capital investment required to make the idea workable.

The idea of marking cartridge headstamps with lot numbers has also been advanced. However, it was noted that ammo makers can sell parts of a lot to as many as 500 customers, each of whom break down their shipment to smaller quantities and sell to their own customers. In the end, small boxes of ammunition, though all marked with the same lot number, can be in thousands of different hands, making the marking exercise worthless as a law enforcement tool.

The UN Small Arms Conference ended after nine days on July 7th in deadlock with no formal conclusions or recommendations. In the final analysis, the complexity of the issue and the concerns of firearms owners as well as those expressed by the U.S. government representative (against a world-wide gun regulatory regime as well as the holding of future conferences on the issues of regulation) prevailed. No recommendations on ammunition, civilian possession or future UN meetings, or for that matter any other subjects, were adopted. The failure of this five-year program to impact the legitimate firearms industry, and the 2nd Amendment rights of U.S. citizens was total according to an analysis by the National Rifle Association of America. However, anti-gun non-governmental organizations as well as some governments served notice they would not give up and would present all of their issues to the UN General Assembly this fall.

Micro-Stamping Bill Advances in California

In another note on serializing, at press-time, the California Senate had approved AB 352, which, if passed by the Assembly, will require all manufacturers selling firearms in the state to micro-stamp the arm’s make, model and serial number on the firing pin’s tip.

Manufacturers argue the technology, owned exclusively by Hitachi Digital Imaging, is expensive and would add approximately $150 to the cost of every firearm sold in the state. To make matters worse, the Senate added last-minute language allowing the state to mandate serialization of all ammunition (including shotgun shells) “at a future date.”

Independent research performed by George G. Krivosta of the Suffolk County Crime Laboratory, Hauppauge, New York in the Winter 2006 edition of the AFTE Journal published by the Association of Firearm and Toolmark Examiners demonstrates how easy it is to remove the micro-stamp from the tip of a firing pin, using a power drill and hand-held grinding stone. Krivosta completely removed identifying numbers without removing enough material to render firing pins incapable of firing a round.

“The layman,” Krivosta writes, “believes that two bullets fired from the same gun are identical, down to the last striation. However, the trained firearms examiner knows that is far from reality.”

“The layman might also take as gospel that if you could find a way to place a number onto the tip of a firing pin, then you could certainly read it in the impression. Not until this research was performed and many test fires examined from a firing pin that had a known recognizable pattern, did it become apparent how much change could take place, and why matching firing pin impressions can be so challenging. This research has shown that implementing this technology will be much more complicated than simply burning a serial number on a few parts and dropping them into firearms being manufactured,” Krivosta noted.

“After multiple firings, the information becomes increasingly harder to read on the cartridges. The technical term for what happens is “peening” – the gradual and inevitable smoothing of raised surfaces from continued impacts. It’s the same process that flattens the heads of hammers and chisels.”

Krivosta also notes several firearms variables which would make the microstamp partially or totally illegible: Headstamping on rimfire and centerfire casings can interfere with the impression’s transfer; the hardness of centerfire cases necessary to handle their high pressures make impressions on anything other than primers difficult. Krivosta’s research says the option of tagging other areas have the same problems due to the movement of shell casings during the firing process. Tagging other areas might help identify individual firearm components, but would do nothing to tie ammunition to firearms, effectively defeating the purpose of the process.

FATS, Inc. to be Acquired by Meggitt

Firearms Training Systems, Inc. (OTCBB: FATS) executed a definitive merger agreement with Meggitt-USA, Inc., the U.S. subsidiary of Meggitt PLC, on August 23, 2006.

In the merger, the holders of FATS’ Class A Common Stock will receive cash in the amount of $1.08 per share for each outstanding share owned immediately before the effective time of the merger. The merger is expected to be completed in the fourth quarter.

“A strategic merger with Meggitt significantly advances our continued strategy of expanding our worldwide customer base, leveraging our strategic partnerships, and otherwise growing beyond our historical roots as a small arms training company to lead the industry in virtual training solutions,” said Ronavan Mohling, President and Chief Executive Officer of FATS. “Combining Meggitt’s strong development and commercialization capabilities in the aerospace and defense industries with FATS’ cutting edge technology in the virtual training solutions market, creates an excellent opportunity to leverage the significant strengths of both companies.”

The Meggitt group designs and makes high performance components and systems for aerospace and defense with capabilities in sensors, engine condition monitoring, avionics, air data systems, fire-proof cabling, ignition, environmental and fluid control, brakes and wheels and anti-skid systems, aerial and ground targetry, countermeasures and ammunition-handling. The group’s specialist capability is also deployed in the medical, mainstream industrial, test-engineering and transportation markets. At the end of its 2005 fiscal year, Meggitt PLC reported revenues of approximately $1.16 billion. North America accounts for just over half of Meggitt PLC’s sales. Meggitt-USA is the U.S. subsidiary of Meggitt PLC.

Georgia CWPs Now Qualify as NICS Alternative

On July 1, 2006 Georgia’s Concealed Weapons Permit (CWP) again qualified as an alternative to a National Instant Criminal Background Check System (NICS) check.

In 1998, the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) sent an Open Letter to Georgia FFL-holders advising them that the Georgia CWP would qualify as an alternative to the background check required under the Brady Law. ATF’s recognition of these permits as a Brady alternative was based on the fact that Georgia met statutory and regulatory requirements for the exception permitted under the Brady Law.

In March 2004, ATF began a review of all states that had permits that qualified as NICS check alternatives to determine if they still qualified. In May 2005, ATF informed Georgia’s officials that the state no longer met the qualifications.

Georgia initially was not able to adequately address the deficiencies of the Georgia CWP in meeting the statutory and regulatory requirements for qualifying as a NICS alternative. Thus, on Oct. 17, 2005, ATF sent an Open Letter to Georgia FFLs stating that effective Oct. 19, 2005, the CWP no longer qualified as a NICS check alternative.

Georgia has since passed legislation, which took effect July 1, 2006, which addresses the CSP’s shortcomings in qualifying as a NICS alternative. Accordingly, the permit again qualifies.

Georgia retailers should note that if a firearms buyer presents a Georgia CWP, no NICS check is necessary. However, the required information about the permit must be recorded in question 23 of the ATF Form 4473, Firearms Transaction Record. For questions call ATF’s Operations Branch, Tel: (304) 616-4200.

KY Permits Qualify as NICS Alternative

Kentucky FFLs should note that effective July 12, 2006, state Carry Concealed Deadly Weapon Licenses (CCDWL) issued on or after July 12, 2006 qualify as an alternative to a National Instant Criminal Background Check System (NICS) check.

In 1998, the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) sent an Open Letter to all Kentucky FFLs stating Kentucky concealed weapons permits issued after Nov. 30, 1998, would not qualify as an alternative to the NICS check requirement. Kentucky recently passed a law, which took effect July 12, 2006, that changes the way CCDWLs are issued. The state asked ATF to review if the CCDWL now met the statutory and regulatory requirements for the NICS exception. ATF’s subsequent review found that based on the new law, any CCDWL issued on or after July 12, 2006, does meet the requirements.

As of July 12, 2006, when a firearms buyer presents the retailer with a Kentucky CCDWL issued on or after July 12, 2006, no NICS check is necessary. However, the required information about the license must be recorded in question 23 of the ATF Form 4473.

The author publishes two of the small arms industry’s most widely read trade newsletters. The International Firearms Trade covers the world firearms scene, and The New Firearms Business covers the domestic market. He also offers FFL-mailing lists to firms interested in direct marketing efforts to the industry. He may be reached at: FirearmsB@aol.com.