An NRA-supported amendment by Sen. John Cornyn (R-TX) to prohibit funds from being used by the Department of Justice to conduct “gun-walking” programs similar to the now-infamous “Fast and Furious” operation was passed in the U.S. Senate with unanimous bipartisan support (99-0).

Specifically, the amendment to the Commerce, Justice, Science Appropriations bill states that: “No funds made available under this Act shall be used to allow the knowing transfer of firearms to agents of drug cartels where law enforcement personnel of the United States do not continuously monitor or control such firearms at all times.”

Responding to the passing of the amendment, Sen. Cornyn said, “Today’s bipartisan effort is just the first step towards ensuring that such a foolish operation can never be repeated by our own law enforcement. The onus is now on Attorney General Holder to hear not just today’s bipartisan call for answers, but the American people’s demands that Washington be held accountable.”

NRA-ILA Executive Director Chris Cox said, “As more details of ‘Fast and Furious’ are unraveled, we are all learning more about the incompetence and dishonesty of those responsible. While it is reprehensible that a program like ‘Fast and Furious’ would be approved by the Obama administration, it is absolutely unacceptable that American taxpayers had to foot the bill. The Senate responded appropriately to ensure future illegal, shameful and deadly scandals aren’t funded and NRA would like to thank Senator Cornyn for his leadership efforts on this important issue.”

Taxpayer Funds May Have Bought Guns for Cartel

Congressional investigators are confronting the Justice Dept. on evidence they say indicates an FBI informant used U.S. taxpayer funds to buy drugs and possibly guns for the Senaloa cartel.

This information was apparently known to the FBI and DEA as early as 2009 but not passed on to the ATF which went on to spend millions of dollars trying to identify that informant.

The informant was allegedly buying guns in January 2010 from Manuel Cells-Acosta, the Phoenix man considered the main target of ATF’s operation Fast and Furious.

In a letter to U.S. Attorney General Eric Holder from Rep. Darrell Issa and Sen. Charles Grassley, the representatives ask Holder to tell Congress how much the Dept. of Justice paid the informant, when he became an informant, and how much the informant spent buying guns for the cartels.

“If ATF had known in January 2010, as the DEA and the FBI apparently knew, that the straw purchasing ring was procuring weapons for this informant, then Operation Fast and Furious may have ended 10-months sooner than it did,” the lawmakers wrote in the letter. “This would have prevented hundreds of assault type weapons from being illegally straw purchased on behalf of Mexican drug cartels.”

“Sources have indicated that this information was communicated to numerous senior people in the DOJ Criminal Division, including Assistant Attorney General Lanny Breuer and several of his top deputies, including Jason Weinstein, Kenneth Blanco and John Keeney,” the letter says.

The letter says that ATF knew by July 2010 that Cells-Acosta had crossed the U.S.-Mexican border 15 times, but chose not to arrest him; even though those crossings and the hundreds of guns ATF agents witnessed him receiving constituted probable cause.

Grassley and Issa have requested Holder turn over the request documents by Oct. 4th. So far, the Justice Dept. has provided just 12 documents over the past month, according to a Grassley spokesman.

Operation Fast and Furious began in October 2009. All told, more than $1.25 million was spent on the illegal guns. ATF later acted as the seller of the guns to known illegal buyers.

New Rules on Guns Leaving the EU

New rules are going into effect on the export of civilian-use firearms in the European Union.

The new EU regulation will give effect to the United Nations Firearms Protocol which aims to put more in place more effective controls of the export of civilian-use firearms.

European exporters will have to seek authorization from Member States to export firearms and ammunition to countries outside the EU. Before issuing an export license, Member States will have to ensure that the destination country has no objection to the import or transit of the shipment. No authorization will be required for hunters and sport shooters if they justify the reason for their journey and return to the EU within 24 months.

A listing of firearms requiring export authorization will be regularly updated.

The new EU rules will not apply to fully automatic, deactivated or antique firearms, or to those for use by the armed forces or public authorities of Member States. Neither will they apply to state-to-state transactions.

ATF Says P.O. Boxes & Rural Routes Are OK

ATF has issued an Open Letter (dated August 29, 2011) stating that FFLs may accept a government-issued identification document that shows only a post office box or rural route address as their residence address after requesting and obtaining a variance from ATF. The ATF offers further guidance on selling to purchasers who present an identification document bearing a rural route address.

The residence address required on Form 4473 must be sufficient to identify the physical location of the purchaser’s residence in the event the firearm is the subject of a trace request. For this reason, Form 4473 states that a post office box is not an acceptable residence address.

Unlike a post office box, a rural route address is considered the person’s legal residence, and that address is sufficient on “identification documents” issued by states recognizing rural routes. Accordingly, ATF has determined that FFLs may transfer firearms to customers who provide an identification document listing only a rural route address, provided that the purchaser resides in a state or locality where a rural route is considered by the jurisdiction to be a legal residence address and no ATF variance is needed prior to making such transfers.

Anti’s Blocking Hatch Amendment

Sen. Orrin Hatch (R-Utah) is seeking to offer an amendment to the Commerce, Justice and Science appropriations bill now being debated on the Senate floor, but anti-gun senators are blocking a vote on the amendment.

The Hatch amendment would make permanent 10 different appropriations “riders” – essentially directions from Congress to the administration about how they must spend, or not spend, funds – into permanent law. Traditionally, each “rider” had to be reauthorized on a year-by-year basis. Some of these riders go back 30 years.

Provisions in the Hatch Amendment:

1. Firearms Database Prohibition – A prohibition on the use of funds to create, maintain or administer a database of firearms owners or their firearms.
2. Curio and Relic Definition – A prohibition on the use of funds to change the definition of a “curio or relic.”
3. Transfer of BATFE Authority – A prohibition on the use of funds to transfer any duty or responsibility of the ATF to any other agency or department.
4. Physical Inventory Prohibition – Prohibition on a requirement to allow a physical inventory of Federal Firearms Licensees.
5. Information Retrieval Prohibition – A prohibition on the use of funds to electronically retrieve personally identifying information gathered by Federal Firearms Licensees.
6. Business Activity -A prohibition on the use of funds to deny a Federal Firearms License or renewal of a Federal Firearms License on the basis of business activity.
7. Information Gathering Prohibition – A prohibition on the use of funds to maintain any information gathered as a part of an instant background check or to maintain information for more than 24 hours.
8. Firearms Trace Data Disclaimer – A requirement that any trace data released must include a disclaimer stating such trace data cannot be used to draw broad conclusions about firearms-related crime.
9. Firearms Parts Export to Canada – A prohibition on the use of funds to require an export license for small firearms parts valued at less than $500 for export to Canada.
10. Importation of Curios and Relics – A prohibition on the use of funds to arbitrarily deny importation of qualifying curio and relic firearms.

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. Visit www.FirearmsGroup.com. He may be reached at: FirearmsB@aol.com.

The cash-strapped Bureau of ATF expects its impending staffing cuts will slow down its criminal investigations and processing of firearm license applications. The cuts to about 5% of ATF’s 5,100-person workforce, would affect about 250 to 275 employees.

There will likely be fewer people processing license applications, which will slow down that process.

The Senate Appropriations Committee approved $1.1 billion for ATF in mid-September – $22 million less than the 2011 level and $57 million below its budget request.

ATF may see as many as 400 employees take early retirement. It expects to save between $15 and $20 million by reducing its ranks.

ATF Inspection Findings

Following is a review of the inspection findings by ATF as presented by Harry L. McCabe, ATF Deputy Assistant Director of Field Operations at SHOT Show 2011.

As of January 2011, there were 47,444 Type 01 (dealer) licensees, 6,941 Type 02 (pawnbroker), 57,393 (collector) Type 03, 1,789 Type 06 (manufacturer of ammunition), 4,487 Type 07 (manufacturer of firearms), 774 Type 08 (importer), 40 Type 09 (destructive device dealer), 242 Type 10 (destructive device manufacturer), and 146 Type 11 (destructive device importer) licensees.

Some 10,538 inspections were completed during fiscal year 2010.

Of the compliance inspections performed during fiscal year 2010, 5,293 had no report of violation or 50.23%; violations were found in 1,366 inspections or 12.96%.

A warning letter was issued in 1,408 cases or 13.36% of violations; a warning conference was held in 820 cases or 7.78%; and a revoke/deny renewal was held in 67 or 0.64% of cases.

The FFL was surrendered in 33 cases or 0.31%; some 1,373 FFLs went out of business or 13.03%; and 178 cases or 1.69% of inspections were resolved by other means.

The total number of FFL inspections climbed from the years 2005 through 2009, going from about 5,000 in 2005 to close to 12,000 in 2009, but dropped in 2010 to 10,538.

The number of FFL’s with no violations grew from about 38% in 2005 to about 53% in 2009 but then began to decline slightly.

The revoked/denied renewal of FFL rate declined from about 2.5% in 2005 to about 0.6% in 2010.

Most Frequent Violations

The most frequent violation found was failure to timely or accurately record entries in the bound record (occurring in 2,380 cases in FY 2010, 2,194 cases in FY 2009, and 2,893 cases in FY 2010).

The second most frequent violation found was that the transferee did not complete Section A of the Form 4473. This occurred in 1,938 cases in FY2010; 1,707 cases in FY2009; and 2,158 cases in FY 2008.

A failure to complete forms as indicated in instructions was the third most frequent violation. This occurred in 1,785 cases in FY 2010; 1,578 cases in FY2009: and 1,846 cases in FY 2008.

The fourth most frequent violation was that the licensee did not record on Form 4473 the date on which NICS was contacted. This occurred in 1,540 cases in FY 2010; 1,385 cases in FY 2009; and 1,818 cases in FY 2008.

The fifth most frequent violation found was that the licensee failed to obtain and/or document the purchaser’s identification. This occurred in 1,425 cases in FY 2010; 1,206 cases in FY 2009; and 1,627 cases in FY 2008.

The sixth most frequent violation was that the licensee failed to report multiple handgun sales. This occurred in 1,166 cases in FY 2010; 928 cases in FY 2009; and 1,159 cases in FY 2008.

Finally, the seventh most frequent violation was that the licensee did not sign and date the Form 4473. This was found to occur in 1,152 cases in FY 2010; 993 cases in 2009; and 1,279 cases in FY 2008.

Other more frequent violations were: licensee failed to properly identify the firearm; licensee failed to require proper evidence of residency for a lawful alien; and, licensee disposed of firearm to a person he/she had reasonable cause to believe was prohibited.

A total of 22,270 firearms were found to be missing from FFL’s inventories in FY 2008; 18,323 in FY 2009 and, 21,041 in FY 2010. The foregoing totals do not include those guns that were later ‘found’ after initially seeming ‘lost’.

For FY 2011, ATF expects to have 624 Industry Operations Investigators or “inspectors.” The total number of IOI’s has remained constant from 2005 through 2010 at about 600.

The total number of FFL Application Inspections has been growing since 2007 from about 5,100 to about 7,500 in FY 2010.

The number of FFL applications denied, abandoned or withdrawn has remained constant over the last five years at about 1,000.

NRA Plans Appeal in Federal Age Limit Case

A federal judge in the Northern District of Texas ruled in late-September that the federal ban on dealer sales of handguns to those within the ages of 18 to 20 does not violate the Second Amendment. The National Rifle Association plans to file a prompt appeal of the court’s ruling to the U.S. Fifth Circuit Court of Appeals.

“We strongly disagree with this ruling,” Chris Cox, executive director of the NRA Institute for Legislative Action said. “As we said when we filed this case, adults 18 and up have fought and died for American freedom throughout our country’s history. They are adults for virtually every legal purpose under federal and state law, and that should include the ability to buy handguns from licensed dealers. Our fellow plaintiffs in this case are law-abiding and responsible young adults. We plan to defend their rights to the end.”

The case is Jennings V. Bureau of ATF. A related case challenging Texas’ ban on issuing concealed carry licenses to young adults in the same age group is still pending in the same court.

Smith & Wesson 1st Quarter Fiscal 2012 Financials

Total company net revenue for the first quarter was $99.2 million, up 4.5% from the year-ago quarter. Firearm division revenue was $91.7 million, an 18% increase over the first quarter last year, and was strong across nearly all product lines, particularly in Smith & Wesson brand handguns, which recorded a 26.6% year-over-year revenue increase for the quarter. Security solutions division revenue was $7.5 million for the first quarter, down 56.4% from the year-ago quarter.

Gross profit was $28.1 million, or 28.4% of revenue, compared with gross profit of $32.2 million, or 34% of revenue, for the year-ago quarter, and included the impact of direct costs associated with the consolidation of the Thompson/Center Arms business to Springfield, Massachusetts. Excluding those direct costs, first quarter gross profit margin would have been 29.6%.

Golden Out at S&W

Michael Golden is out as Smith & Wesson’s president and CEO, in a sudden announcement.

In response, the Board has appointed P. James Debney in his place as President and CEO. Debney previously served as Vice President of the company and president of the firearms division.

The change is effective immediately. Golden will continue as Co-vice Chairman of the Board.

Debney, 44, has been president of S&W’s firearms division since November 2009. Prior to that, he was President of Presto Products Company, a $500 million plastic products business.

ATK Relocating HQ to N. Virginia

ATK is relocating its corporate headquarters on October 1st to Arlington, Virginia where the company will expand its office space.

The company will continue to maintain a presence in Minnesota with approximately 210 employees.

Beretta Wins U.S. Army Contract

The U.S. Army has announced that Beretta U.S.A. has been awarded a purchase order for 15,778 Beretta 92FS pistols and cleaning kits.

Delivery of the pistols will begin in early December or January and will proceed at the rate of 6,000 per month.

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. Visit www.FirearmsGroup.com. He may be reached at: FirearmsB@aol.com.

Hidden Gun-Owner Registration Scheme Revealed

Among the many unknown provisions of the national mandatory healthcare law recently passed by Congress is language that will effectively create a national federal database of firearms owners. This fact has been brought out into the open through E.F. Nappen, Esq., general counsel for Pro-Gun New Hampshire, a recently formed group.

Effective January 1, 2012, Nappen writes, the national healthcare law requires all firearms dealers to report to the Internal Revenue Service all of their firearms purchases and any other goods valued at over $600. This reporting requirement applies to purchases made from individuals or companies. IRS 1099 forms will have to be filed in each instance, reporting the purchase by the firearms dealer.

The new regulations apply to all businesses that buy goods from individuals, not just firearms dealers. Thus the law will mandate firearms dealers to send in a 1099 form with the name, address and presumably the Social Security number of the person who sells them a used gun. This personal identifying information will then be sent to the IRS who could use it to create a national database of firearms owners as most people who own guns usually own several.

In addition to being bad for gun owners, the law will create burdensome recordkeeping and reporting requirements on businesses, especially gun dealers. Gun dealers already have mountains of paperwork with 4473s, A&D Bound Book records, receipts, etc. Presently, a 1099 form is required for the sale of goods valued at $5,000 or more. The much lower reporting threshold will capture nearly all sales of firearms by individuals to dealers, creating a de facto gun owner database.

Though firearms dealers presently have to keep detailed acquisition and disposition records, these records are not in a central database maintained by the IRS. This new law, Nappen points out, creates a list of private gun sellers with the IRS. Also, FFLs who fail to file 1099s on those who sold them guns and were paid over $600 may be caught by ATF agents during FFL inspections by way of their A&D books. This will cause ATF and IRS trouble for the gun dealer and tax problems for the private seller.

However there is hope in sight. Rep. Dan Lungren (R-CA) has introduced a bill (H.R. 5141) to repeal this financial reporting mandate section of the healthcare law. The bill was referred to the House Committee on Ways and Means where it has languished since late April. House Passes Bill to Protect Guns from Creditors

In late July, the U.S. House passed a bill that would exempt bankruptcy filers from losing a firearms collection (up to $3,000 in value) from creditors. The bill also allows bankruptcy filers who own only one gun, to keep it, regardless of its value. The bill passed the House by a vote of 307 to 113. A similar measure was introduced in the Senate.

The House measure was introduced by freshman Democratic Rep. John Boccieri of Ohio who said, “We must protect the rights guaranteed to us by our founding fathers, no matter what financial circumstances a citizen might face.”

The National Rifle Association endorsed the measure, noting, “We think it is reasonable for folks who are in financial distress to have an effective means of defending themselves.” Many states already have exemptions on their books for firearms in bankruptcy proceedings.Now the idea is going national – but not everyone likes it.

Anti-gun New York Rep. Carolyn McCarthy (D) argued on the House floor that the bill is a mistake, saying that having guns in households that are going through bankruptcy could increase the risks of suicide and violence. Winchester Ammo’s 2nd Qtr. Sales Gain

Olin Corp.’s Winchester Ammunition division achieved the highest second quarter segment earnings in its history and the second best quarterly earnings ever during the second quarter of 2010, the company reports.

The results reflect the continuation of stronger than normal demand that began in the fourth quarter of 2008 with Democrats sweeping the national elections. During the quarter, Winchester was said to benefit from strong sales to military, and law enforcement customers.

Winchester’s second quarter 2010 segment earnings were $21.1 million compared to $19.1 million in the second quarter of 2009. The increase in segment earnings reflects the combination of lower manufacturing costs and improved pricing, which offset a less favorable product mix and higher commodity costs.

Winchester’s second quarter 2010 sales were $147.7 million compared to $140.6 million in the second quarter of 2009. While military, international and law enforcement sales increased compared to the corresponding quarter in the previous year, commercial sales were lower during the most recent quarter reflecting the start of the slower spring-summer month selling season. For the six months ended June 30, 2010, Winchester’s sales were $279.1 million, compared to $273.5 million during the first half of 2009. Chicago Gun Suit Plaintiffs Apply for Permits

Two years after filing the lawsuit that undid the Chicago handgun ban and applied firearms rights to the states, Otis McDonald walked into a police station and applied for a permit to keep a handgun at home.

The process took only 20-minutes but McDonald told Chicago newspaper reporters that some of the requirements were excessive. He pointed to the $100 application fee, which he said poorer Chicago residents would not be able to afford. There is also the one-gun-a-month limit. Each handgun purchased requires a $100 registration fee. Each handgun owned must be re-registered every three years at a cost of $15 per gun. The initial permit application will take 10-days to three months to process, McDonald was told.

Applicants are required to have a state-issued Firearms Owner’s Identification card (FOID) before they can register a firearm in the city. Also required are four hours of classroom training and spending an hour on a firing range. Applicants must leave the city to obtain the training as the city won’t allow any ranges to admit civilians – they are reserved exclusively for police. “I can’t see to save my life why our government would infringe this on law-abiding taxpaying citizens,” McDonald exclaimed. “This is an inherent right. It was not given based on how much money we’ve got or what we can afford financially.”

McDonald appeared at the police station along with the three other plaintiffs in the suit, all of whom made application. Two weeks after the city rescinded its ban, some 83 applications were filed to buy handguns. NH Governor Vetoes Bill to End Local Dealer Licensing

New Hampshire Governor John Lynch (D) has vetoed legislation that would have scrapped the ability of cities and towns to license handgun sellers. The veto keeps intact a 20-year-old state law.

The sponsor of the legislation called local licensing redundant since the federal government already licenses firearms dealers and regulates firearm sales. State Rep. Daniel Eaton (D), the House majority floor leader, also said local licensing is not uniformly applied. And he warned that towns could use it punitively or for zoning purposes.

Indeed, municipalities in Connecticut have similar authority and have used it punitively. The town of Windsor-Locks, CT recently imposed a $50 vendor’s licensee fee on all vendors at gunshows within the town. The city of Waterbury, CT, while saying it is not against guns, has imposed a $500 vendor license fee on all gun show dealers in the city. Needless to say, there are no gun shows in Waterbury.

Allowing local governments to impose their own rules on gun sellers, even those with storefronts, could effectively put them out of business if a town or police chief decided a local gun seller’s license should cost $5,000 or $50,000 (shades of Chicago’s Mayor Daley and his city council).

Bedford, NH Police Chief David Bailey led the charge against Eaton’s bill saying local licensing applies to some hobbyists who aren’t covered by federal law. While Bedford has no firearm retailers, it licenses a few hobbyists, he said. “There are some that slip through the cracks in the federal system,” Bailey said.

Bailey, who claimed he supports the Second Amendment, showed his actual sentiments are otherwise when he stated he would like to see the state strengthen the local licensing law. He also said the state would get a bad reputation were Lynch to sign the law, noting past criticism that Boston officials have leveled on New Hampshire for its gun laws. “I don’t want to see this as a weak gun state where anyone can get guns here,” Bailey said.

In his veto message, Lynch said New Hampshire police chiefs strongly urged the bill not become law. He said the local license allows for the identification of sellers who may not be subject to federal firearm licensing requirements. “While other state and federal laws prevent selling a firearm to a convicted felon, it does not seem necessary to take away the authority of municipalities,” Lynch said in a statement.

Eaton said the only communities that he knows of with local handgun sales licensing are Bedford and Portsmouth. He’s yet to decide whether to seek an override. Another confusing matter involved the NH Association of Police Chiefs. Eaton said the organization did not oppose the legislation in committee, and its opposition surfaced at the last minute. Most police chiefs aren’t even aware of the licensing requirement, he said. Police Seizure of Dealer’s Inventory Investigated

A criminal investigation has been launched into the disappearance of part of the knife inventory that had been seized by police in New Hampshire in a raid on retailer Abe’s Awesome Armaments in New Hampton.

According to published reports, a court order for the return of the inventory to retailer Abe Foote was secured by his attorney, Evan Nappen. However, when the knives were returned by the police, Foote reported the inventory was missing about 30% of the knives that were seized. The knives were confiscated when Foote was prosecuted under the state’s former switchblade knife regulations.

New Hampshire now has virtually no restrictions on switchblades, stilettos, daggers and dirks due to legislation signed into law on May 18. Retailers report brisk trade in the knives since the law was passed. Import Ban Results in Smuggling in Dominican Republic

The smuggling of arms in all calibers has risen as the result of a civilian firearms import ban enacted in the Dominican Republic and has also spurred a large black market in firearms, the country’s firearms importers say.

The group cited the recent arrest of four customs officials in Santiago on charges of conspiracy to smuggle guns. The country’s four-year-old civilian firearms import ban was promoted by the Interior and Police Ministry.

Legal firearms or those already in the country, have steadily risen in value since the supply of new legal guns was cut off four years ago. As a result, smuggling of firearms has become a lucrative business. Nosler Resumes Shipping After Plant Fire

No injuries were reported from an explosion at the Nosler bullet manufacturing plant in Bend, Oregon on June 2nd.

Five days after the explosion, the company said it was back at work loading ammunition, assembling rifles and shipping orders. Published reports indicated the explosion and fire occurred just after 2 p.m. during a work shift but that all personnel had been evacuated. The incident began with a flash in the ballistics tunnel followed by smoke and then the explosion which blew out a hole in one end of the 80,000-square-foot building.

Fire inspector Jeff Bond noted that Nosler followed an established evacuation procedure that all employees were required to practice and which certainly helped in this instance. Fire officials have determined that a rifle shot in the company’s underground testing facility triggered the fire and explosion which caused an estimated $15 million in damage. Bend Deputy Fire Marshal Susie Lovisco told reporters the “initiating event was related to the testing of a rifle by an employee in the south tunnel” of the concrete underground firing range used for ballistics testing. Lovisco said a “backdraft effect occurred” in the “oxygen starved environment” of the tunnel, with the pressure blowing out the southeast corner of the building. U.S. Gun Purchase Rate Rose 55% Since 2006

Firearms buying by the American public have risen substantially during the last several years with the trend continuing upward, according to background check data compiled by the federal government.

While between 8.5 and 9 million background checks were conducted annually during the years 1999 to 2005, the FBI reported a surge to 10 million in 2006, growing to 11 million in 2007, rising to nearly 13 million in 2008, and hitting nearly 14 million in 2009. The totals indicate a 55% increase in just four years.

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. Visit www.FirearmsGroup.com. He may be reached at: FirearmsB@aol.com.

Maryland AG: Rimfire Replicas Not Necessarily Assault Weapons

In a victory for marketers of popular .22 caliber replicas of centerfire military pattern rifles, Maryland’s Attorney General has issued a favorable opinion as to what constitutes a “copy” of a so-called “assault weapon.”

The issue was whether .22 caliber rimfire rifles that may cosmetically resemble firearms defined as “assault weapons” in the Annotated Code of Maryland, Public Safety Article § S-101, should be regulated under that section as “copies” of the therein listed center-fire models.

According to the AG’s office opinion, a copy must be similar “in its internal components and function to the designated weapon. Cosmetic similarity to an enumerated assault weapon alone would not bring a weapon within the meaning of the state’s “Regulated Firearms law.” The opinion also states that the Maryland State Police will make the initial decision as to whether the gun’s internal parts make it a “copy” of an “assault weapon.” The opinion was issued at the request of the state police with the active involvement of the Maryland Licensed Firearms Retailers Association.

The statutory definition of “regulated firearm” in Maryland’s Regulated Firearms law (mandating special sale regulations for so-called “assault weapons” or “regulated firearms”) specifies a list of designated assault weapons “or their copies.” The state police asked for an opinion on the meaning of the word “copies” in the law’s context.

For background, a person seeking to purchase, rent or transfer a regulated firearm in Maryland must submit an application for review and approval of the transaction by the Dept. of State Police. The statute defines “regulated firearm” to include two categories of firearms – handguns and “a firearm that is any of the following specific assault weapons or their copies, regardless of which company produced and manufactured that assault weapon…” referring to a long list of firearm makes and models. The statute does not further define the word “copies”.

The AG’s office noted that the list of “assault weapons” in the statute that could be the subject of a “copy” suggests that cosmetic similarity alone would not suffice. For example, three of the four firearms on the list are described by specific calibers. The specification of the caliber, the AG noted, indicates that an otherwise identical firearm of a different caliber would not be a regulated firearm.

More importantly, the AG found, the reference to “copies” of specific arms was intended to ensure that the requirements of the law could not be avoided simply by rebranding or superficially changing a named gun. This also suggests, the AG found, that “copies” was intended to relate to components and function; not simply appearance. “Interpreting ‘copy’ to include any firearm that merely looked like one of the enumerated firearms would run contrary to the choices made by the legislature,” the AG wrote.

“Consistent with the General Assembly’s apparent intent to create a definition with an eye toward the function of the weapon, a ‘copy’ would include a firearm whose internal components and function, necessary to the operation of the firearm, are similar to those of one of the specifically enumerated assault weapons. As the agency charged with administering the regulated firearms law, the Dept. of State Police must make that assessment,” the AG concluded. The Maryland State Police have since formed a committee to study the issue.

New Rule Gives ATF Director Ultimate Decision-Making Authority in FFL Matters

The Bureau of ATF&E has initiated a ruling which provides ATF headquarters oversight of all administrative actions prior to notices being sent to the licensee. The ruling establishes the final approval authority for denial of applications for licenses, suspension or revocation of licenses, or imposition of civil fines.

The rule adopted amends the regulations of ATF to delegate to the Director of ATF the authority to serve as the deciding official regarding the denial, suspension, imposition of a fine, or revocation of FFLs. The rule allows the ATF Director to delegate to another ATF official the authority to decide a revocation or denial matter. Such flexibility, ATF says, is intended to allow ATF to more efficiently conduct denial, suspension or revocation hearings, and make the determination whether to impose a civil fine. The rule is expected to give ATF the ability to ensure consistency in decision-making and to address case backlogs, the agency says.

The regulations in Subpart E of Part 478, §§478.71-78, relate to proceedings involving federal firearms licensees, including the denial, suspension, and revocation of a license. The Dept. of Justice published an interim rule with request for comments at 74 FR 1875 on January 14, 2009 with the comment period ending April 14, 2009. The new rule essentially amends ATF’s regulations to re-designate the ATF Director, as opposed to the Director of Industry Operations (DIO), as the deciding official in matters dealing with the denial, suspension or revocation of federal firearms licenses, and the imposition of a civil fine. The ruling allows the Director to re-delegate this authority though issuance of a delegation order, not through regulation.

ATF contends this approach is consistent with other regulations in Part 478. It cites, for example, § 478.144 provides that the Director is the deciding authority with respect to applications for relief from firearms disabilities. Further, ATF says these changes to the decision-making and related delegation authority were the only substantial changes made by the interim rule. All other aspects of the ATF processes, including notice and review provisions, remain the same.

In response to the aforementioned comment period, ATF received three comments. Two were said to support the interim regulations, while a third expressed opposition. The opposing commenter expressed a concern that under the interim regulations the Director’s decision is not subject to review.

According to ATF, this opposing commenter wrote: “The only other times in the state of American government, aside from the Presidency, where one person is afforded the opportunity to make decisions affecting others without a system of checks and balances is by a judge. Even then, there is an appeals process by which this one individual’s interpretation of legal circumstances may be reviewed.

“…To afford the director of a government agency, or any other appointed individual for that matter, the ability to ‘legislate’ freely as he deems necessary regarding the denial, suspension, or revocation of a federally issued license seems not only unconstitutional, but potentially unethical if this one man’s ruling is subject to a political agenda.”

ATF’s response to this dissenting commenter, written by James P. Ficaretta, ATF Enforcement Programs and Services, and published in the Federal Register, begins by stating that the due process system of checks and balances is already incorporated into the procedures for denying or suspending FFLs. Prior to any adverse decision, ATF notes, the agency must provide notice to the affected applicant or license holder and provide that person with an opportunity to present evidence in a hearing.

Before the interim rule became effective, the DIO for each field division had the authority to issue the final decision. The interim rule vests this same authority to issue a final decision in the ATF Director. The Director may, in turn, delegate that authority to headquarters officials, field officials, or some combination thereof.

ATF further details that under 18 U.S.C. 923(f), a denied applicant still has the opportunity for federal court review of the decision. The court could overrule ATF’s decision in a case. ATF says the rule change simply elevates final decision-making authority within the ATF to the Director.

Kenneth E. Melson, ATF’s Deputy Director, issued a statement saying, “ATF, in an effort to ensure consistency within the FFL community, initiated the ruling which provides ATF headquarters oversight of all administrative actions prior to notices being sent to the licensee.”

Copies of the interim rule, the comment received and the final rule are available for public inspection by appointment during business hours at the ATF Reading Room, Room 1E-063, 99 New York Avenue, NE, Washington, DC 20226, Tel: (202) 648-7080.

False Rumors on U.N. Small Arms Treaty

False rumors are circulating on the Internet to the effect that Secretary of State Hillary Clinton has signed a U.N. small arms treaty. Clinton has not signed any such treaty as no such treaty has yet been negotiated.

The U.N. Arms Trade Treaty will be drafted sometime before now and 2012, and even if signed, would not take effect in the U.S. until it was ratified by the Senate.

All that has happened so far is that the Obama Administration has announced its support for the treaty. The U.N. claims that guns used in armed conflicts cause 300,000 deaths worldwide annually. The solution it offers to keep rebels from getting guns is to make the global arms pool smaller through government action. Proposed is that signatory countries be required to “prevent, combat and eradicate” various classes of firearms to undermine “the illicit trade in small arms.” Inherent in this would be confiscation of personally-held firearms. The U.N. treaty will lead to more American gun control.

“After the treaty is approved and it comes into force, you will find that it has this implication or that implication and it requires the congress to adopt some measure that restricts ownership of firearms,” former U.S. ambassador to the U.N., John R. Bolton warns.

“The Obama Administration knows it cannot obtain this kind of legislation purely in a domestic context. They will use an international agreement as an excuse to get domestically what they couldn’t otherwise,” Bolton concludes.

Kahr Arms Acquires Magnum Research

Kahr Arms, the producer of quality, compact pistols, has announced its purchase of Minnesota-based firearms manufacturer, Magnum Research, Inc., best known for its Desert Eagle pistol. This latest acquisition follows up on Kahr’s buy of Auto-Ordnance some years ago, producer of Thompson submachine gun replicas in semi-auto.

Magnum Research, Inc. was founded in 1979 and its current line includes: Desert Eagle pistol in .50 AE, .44 Magnum and .357 Magnum; Baby Desert Eagle “Fast Action” pistol 9mm and .40 S&W; Desert Eagle 1911; Micro Desert Eagle in .380 ACP; BFR revolvers in .44 Mag., .45LC/.410 and .45-70, Mountain Eagle MAGNUM LITE rifle in .22-250, .223, .30-06, .280 and 7mm; and the MAGNUM LITE rifle in .22 LR, .22 WMR, and .17 MACH-2.

NRA’s Cox Reviews Achievements of Past Decade

During the 2010 NRA’s Annual Meetings & Exhibits in Charlotte, North Carolina, Chris W. Cox, Executive Director of the NRA’s lobbying arm, the Institute for Legislative Action, reviewed accomplishments made for the right to keep and bear arms in an address to the NRA membership.

Noting that while the clock cannot be turned back on Election Day 2008, ten years ago, almost to the day, NRA President Charlton Heston stood in Charlotte and called on NRA members to Vote Freedom First!

Following Heston’s advice, voters on Election Day 2000 stopped Al Gore and the vote later enabled the confirmation of Attorney General John Ashcroft who changed the position of the federal government in support of the Second Amendment as an individual right. Just the year before, Bill Clinton’s Justice Department had said there was no individual right to arms. In 2002, voters elected a Congress that let Bill Clinton’s ban on so-called “assault weapons” expire. By voting freedom first in 2004, Americans kept John Kerry out of the White House, kicked Tom Daschle out as Senate Majority Leader and ended seven years of roadblocks to give lawsuit protection to the firearms industry.

One vote for President Bush secured two pro-gun votes on the U.S. Supreme Court through the confirmations of Chief Justice John Roberts and Justice Sam Alito. This resulted in the Heller decision confirming the right to keep and bear arms.

Cox additionally noted that right-to-carry laws have been improved in seven states so far this year. Calling self-defense reform, real health care reform, Cox detailed:

• Castle Doctrines are in effect in 24 states;
• Laws prohibiting Katrina-type gun confiscations have been passed in 28 states; and
• Reciprocity is spreaing across the country.

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. Visit www.FirearmsGroup.com. He may be reached at: FirearmsB@aol.com.

Mexican authorities handpicked for tracing the firearms that were used to bolster the claim that “more than 90 percent of about 11,000 guns tied to violence in Mexico’s drug wars came from the United States,” according to a report appearing in the El Paso Times.

The Mexican federal attorney general’s staff recently acknowledged that Mexican authorities had seized 35,943 arms, including 2,800 grenades, since the crackdown against the drug cartels began in December 2006. That means Mexico provided the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives with serial numbers for less than a third of the weapons that were seized.

Earlier this year, officials of the ATF stated publicly that 90 percent of the weapons recovered in Mexico in connection with drug violence were traced to the United States.

Using the ATF’s 90 percent figure, President Barack Obama and Mexico’s ambassador to the United States, Arturo Sarukhan, said U.S. guns were fueling drug violence in Mexico.

But the 90 percent figure was overblown because Mexico did not provide the ATF with serial numbers for all the weapons it seized, according to information obtained by the El Paso Times through the Freedom of Information Act.

“During fiscal years (October through September) 2007 and 2008, Mexico submitted to ATF 11,055 crime guns to be traced. ATF determined that 94 percent of those crime guns originated from various sources within the United States,” the ATF said adding “It is important to note that the 94 percent figure only relates to the crime guns that Mexico provided to ATF to be traced.”

An ATF spokesman also said that about 2,800 of the 11,055 weapons were imported to the United States from other countries before they ended up in Mexico, adding “a small percentage could not be determined to have a nexus to the United States.”

The ATF did not respond to other questions posed by reporters about the traced weapons, such as how many were tracked to U.S. foreign military exports or U.S. direct commercial sales.

It is widely believed that most of the seized weapons were not traced because of corruption in Mexico. Police in Mexico are thought to not submit the serial numbers of high-value guns, such as military-grade firearms, because they keep them for themselves.

“The 90 percent figure is being recklessly tossed around,” said Andrew Arulanandam, spokesman for the NRA in Washington. “It is a calculated attempt to pin the tragedy of the Mexican drug wars on the American people and the Second Amendment. The first step to fixing the problem is for Mexico to make sure the rampant corruption that exists in law enforcement, the military, judiciary and even among politicians, is eradicated.”

The United Nations and Amnesty International are among the organizations that lobby for global gun control. Harold Kohn, Obama’s nominee for legal adviser to the State Department, is on record advocating global gun control.

ATF Expands Caribbean Region eTrace Reach

The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) has signed a memorandum of understanding (MOU) that will provide eTrace, an electronic system used to trace illicit firearms with the Ministry of Justice and Police of the Government of Suriname. This is an ongoing effort to combat firearms trafficking in the region consistent with the December 2007 joint Caribbean Community (CARICOM)-U.S. Initiative on Combating the Illicit Trafficking in Small Arms and Light Weapons and Ammunition. (For additional information see website: www.state.gov/p/wha/rls/120209.htm)

eTrace is a paperless firearm trace submission system that is accessible through a secure Internet connection. ATF processed more than 300,000 crime-gun trace requests in fiscal year 2008, including traces from 58 countries. The other countries in the region that have eTrace capabilities include Antigua and Barbuda, Bahamas, Barbados, Belize, Colombia, Costa Rica, Dominica, Dominican Republic, El Salvador, Grenada, Guatemala, Guyana, Honduras, Jamaica, Panama, Mexico, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, and Trinidad and Tobago.

Unauthorized Versions of ATF Application Forms

The Federal Firearms Licensing Center (FFLC) reports it is receiving unauthorized versions of ATF Form 7CR, Application for Federal Firearms License (Collector of Curio and Relics) from curio/relic firearms collector applicants.

Any FFL applications submitted on other than officially approved ATF forms will not be accepted for processing by the FFLC. The unauthorized forms have been modified from the official ATF version and made available to applicants on public Internet sites without the express permission of ATF.

FFL applications on forms other than those officially approved and issued by ATF will be returned with instructions on how to order official application forms from ATF’s Distribution Center (www.atf.gov/dcof/index.htm). Please contact the FFLC at (304) 616-4600 with any questions about this policy.

Most of ATF’s forms are available in a PDF format on the ATF Website (www.atv.gov) and also from www.atf.gov/forms/3000.htm.

ATF Reform Bill Introduced in Both House & Senate

Following the recent introduction of a Senate bill designed to strike a balance between providing ATF with additional regulatory powers and affording licensees more rights and due process in the regulatory process, Reps. Steve King (R-Iowa) and Zack Space (D-Ohio) have introduced similar legislation in the House of Representatives. The legislation would allow ATF new powers to issue fines and suspend licenses of federal firearms licensees (as opposed to current regulations which only allow for license revocation) and would also define what a “willful” violation is. The bill also calls for revocation hearings to be heard before an administrative law judge, rather than an ATF official. The bill however, does allow what many believe to be “excessive” punitive fines to be imposed, which could have the same effect as license revocation through financial ruination.

ATF has announced that the National Firearms Act (NFA) Handbook, the collaborative effort of the ATF and the National Firearms Act Trade and Collectors Association (NFATCA), has recently been updated and the revised version is now available on the ATF website: http://www.atf.gov/firearms/nfa/nfa_handbook/index.htm.

The NFA Handbook is no longer available in a printed version from ATF. ATF’s goal is to ensure the regular update and availability of this document without going through the time intensive and costly process of printing. This will result in the continuous availability of a more current and accurate guidebook.

The updates include:

• Chapter 1 – a revision to section 1.6 to include the new address and telephone numbers for the Federal Firearms Licensing Center.
• Chapter 6 – a revision to section 6.4, Approval of Form 1, and a new section 6.8, Withdrawal or Cancellation of an ATF Form 1 and Refund of Making Tax.
• Chapter 7 – a revision to section 7.4.4, Obtaining variances to the marking requirement, and its subsections.
• Chapter 9 – a revision to sections 9.4.2.2, Transfers of NFA firearms to persons other than an individual or an FFL and special (occupational) taxpayer, 9.5.1.1, Repair of firearm silencers, 9.8, U.S. Government-owned firearms, and 9.12, Are FFLs/SOTs required to initiate a background check of the transferee under the Brady law in connection with the transfer of an NFA firearm?, and a new section 9.14, Transferable Status and the Form 10.
• Chapter 10 – a new section 10.1.5, DEWATS, and 10.1.5.1, Reactivation of DEWATS.
• Chapter 13 – a revision to section 13.7, Reporting information in response to ATF trace requests.
• Chapter 14 – a revision to section 14.3, Disposition of “post-1986 machineguns.”
• Chapter 15 – a revision to section 15.2.1, Criminal.

CA Suit Seeks to Restore Carry Rights

The Second Amendment Foundation, The Calguns Foundation and three California residents have filed a lawsuit seeking to vindicate the right to bear arms against arbitrary state infringement.

Nearly all states allow qualified law-abiding citizens to carry guns for self-defense, but a few states allow local officials to arbitrarily decide who may exercise this core Second Amendment right. In the action, Plaintiffs challenge the policies of two California Sheriffs, in Sacramento and Yolo counties, who reject the basic human right of self defense by refusing to issue ordinary people gun carry permits.

Attorney Alan Gura, representing the plaintiffs in this case, said, “It’s a shame that these Sheriffs don’t think that self-defense is a ‘good cause’ to exercise the right to bear arms, but we’re confident the Second Amendment reflects a better policy.”

Added co-counsel Donald Kilmer, “The California carry licensing system is being abused by some officials who are hostile to self-defense rights. The police can regulate the carrying of guns, and that includes preventing dangerous people from being armed. Complete deprivation of the right to bear arms, however, is not an option under our Constitution.”

“The Supreme Court’s decision last year in the Heller case shows that there is both a right to keep arms and a right to bear arms,” said SAF founder Alan Gottlieb. “In most states, authorities do not deny a license to carry an operable firearm to any law-abiding applicant who completes training and a background check. This is also the practice throughout much of California. These two Sheriffs must respect the constitutional rights of their citizens to bear arms.”

S&W Reports Increased 3rd Qtr. Sales

Smith & Wesson Holding Corporation, parent company of Smith & Wesson Corp., the legendary 157-year old company in the global business of safety, security, protection and sport, has announced financial results for its third fiscal quarter ended January 31, 2009.

Net product sales for the three months ended January 31, 2009 were $83.2 million, a $17.1 million, or 25.9%, increase over net product sales for the three months ended January 31, 2008. Net income for the third fiscal quarter was $2.4 million, or $0.05 per fully diluted share, compared with a net loss of $1.8 million, or $0.04 per share, for the comparable quarter last year. Adjusted EBITDAS, a non-GAAP financial measure, was $9.2 million for the third quarter, compared with $3.7 million for the third quarter of fiscal 2008.

Total firearms sales for the third quarter were $78.5 million, an increase of $16.9 million, or 27.5%, over the third quarter of last year. Pistol sales increased 45.7% to $24.9 million, driven by continued consumer demand, law enforcement adoption of the M&P polymer pistol line, and strong consumer sales of the Sigma pistol line.

Sales of M&P pistols increased 77.1% for the third quarter. M&P tactical rifle sales increased by 111% to $8.8 million for the third quarter as demand for this product remained strong in both the consumer and law enforcement channels. Total revolver sales were $22.3 million, an increase of $7 million, or 45.4%, versus the comparable quarter one year ago. Sales of non-firearm accessories, including handcuffs, totaled $4.7 million, a 4% increase over non-firearm accessory sales of $4.5 million for the third quarter last year.

Hunting firearm sales of $6.7 million represented a decline of $5.8 million, or 46.4%, from the comparable quarter in the last fiscal year. Hunting products continued to be negatively impacted by a number of factors, including their position in the consumer discretionary marketplace and a distribution channel that is buying cautiously.

Michael F. Golden, President and Chief Executive Officer, said, “I am pleased to report these very positive results for our third fiscal quarter. Our handgun and tactical rifle products have consistently delivered favorable results throughout the past several quarters, and during the third quarter, we experienced significant increases in the consumer demand for these products. Despite continuing weakness in the overall economy, we focused on our strategy to grow our business in the consumer and the professional channels, and we launched some important new products. At the same time, we addressed recent, very strong demand, for our pistols, revolvers, and tactical rifles. In fact, sales of handguns and tactical rifles into our consumer channel for the third quarter grew 62% over the prior year. We delivered solid profits, and we made significant progress toward bolstering our balance sheet by reducing our inventories and effectively managing our accounts receivable, which resulted in a strengthening of our cash position.”

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. Visit www.FirearmsGroup.com. He may be reached at: FirearmsB@aol.com.

Alliant Techsystems (ATK) has acquired accessory manufacturer Eagle Industries, as it expands its position in the domestic and international tactical accessories markets. While terms of the agreement were not disclosed, ATK expects the acquisition to add more than $80 million to Fiscal Year 2010 revenues, and be slightly accretive to FY10 earnings per share. Eagle Industries will become part of ATK’s Armament Systems group.

Eagle Industries is a manufacturer of operational nylon gear and equipment for tactical operations. It makes more than 5,000 products including tactical assault vests, load-bearing equipment, weapon transport gear, holsters, and personal gear carriers. Main customers are the military and law enforcement agencies in the U.S. and internationally. The company has approximately 2,300 employees.

ATK has also been awarded a contract from the U.S. Army Contracting Command, Rock Island Contracting Center, Rock Island, Ill., to continue operating the Lake City Army Ammunition Plant (LCAAP) for an additional four years. Under the new contract, ATK will continue to supply small-caliber ammunition through September 2013. The award assures an uninterrupted supply of ammunition to the U.S. military beyond ATK’s current 10-year contract.

The U.S. Army also awarded ATK $481 million in orders under the new contract for production of 5.56mm, 7.62mm, and .50 caliber ammunition and to continue work to modernize the Lake City facility.

ATK began operating the plant, located in Independence, Mo., in April 2000 and has increased production from 350 million to more than 1.4 billion rounds annually. The plant has the capability to produce a mix of 5.56mm, 7.62mm, .50 caliber, and 20mm cartridges, as well as ammunition links.

ATK is a premier aerospace and defense company with more than 19,000 employees in 22 states, Puerto Rico and internationally, and revenues in excess of $4.5 billion.

Smuggled U.S. Firearms in Mexico Not a Major problem

The media and some politicians present as “true” the shocking statistic that 90 percent of the arms used to commit crimes in Mexico come from the United States.

• Secretary of State Hillary Clinton said it to reporters on a flight to Mexico City.
• CBS newsman Bob Schieffer referred to it while interviewing President Obama.
• California Sen. Dianne Feinstein said at a Senate hearing: “It is unacceptable to have 90 percent of the guns that are picked up in Mexico and used to shoot judges, police officers and mayors … come from the United States.”
• William Hoover, assistant director for field operations at the Bureau of Alcohol, Tobacco, Firearms and Explosives, testified in the House of Representatives that “there is more than enough evidence to indicate that over 90 percent of the firearms that have either been recovered in, or interdicted in transport to Mexico, originated from various sources within the United States.”

There’s just one problem with the 90 percent “statistic”: It’s just not true. In fact, it’s not even close. The fact is, only 17 percent of guns found at Mexican crime scenes have been traced to the U.S.

What’s true, an ATF spokeswoman told FOXNews.com, in a clarification of the statistic used by her own agency’s assistant director, “is that over 90 percent of the traced firearms originate from the U.S.”

But a large percentage of the guns recovered in Mexico do not get sent back to the U.S. for tracing, because it is obvious from their markings that they do not come from the U.S.

“Not every weapon seized in Mexico has a serial number on it that would make it traceable, and the U.S. effort to trace weapons really only extends to weapons that have been in the U.S. market,” Matt Allen, special agent of U.S. Immigration and Customs Enforcement (ICE), told FOX News.

The Numbers

In 2007-2008, according to ATF Special Agent William Newell, Mexico submitted 11,000 guns to the ATF for tracing. Close to 6,000 were successfully traced – and of those, 90 percent – 5,114 to be exact, according to testimony in Congress by William Hoover – were found to have come from the U.S. But in those same two years, according to the Mexican government, 29,000 guns were recovered at crime scenes.

This means that 68 percent of the guns that were recovered were never submitted for tracing. And when the approximately 6,000 guns that could not be traced are deducted from the remaining 32 percent, it means 83 percent of the guns found at crime scenes in Mexico could not be traced to the U.S.

The crime guns in Mexico come from a variety of sources:

• The Black Market. Mexico is an arms bazaar, with fragmentation grenades from South Korea, AK-47s from China, and shoulder-fired rocket launchers from Spain, Israel and former Soviet bloc manufacturers all readily available to those with cash and connections.
• Russian crime organizations. Interpol says Russian Mafia groups such as Poldolskaya and Moscow-based Solntsevskaya are actively trafficking drugs and arms in Mexico.
• South America. During the late 1990s, the Revolutionary Armed Forces of Colombia (FARC) established a clandestine arms smuggling and drug trafficking partnership with the Tijuana cartel, according to the Federal Research Division report from the Library of Congress.
• Asia. According to a 2006 Amnesty International Report, China has provided arms to countries in Asia, Africa and Latin America. Chinese assault weapons and Korean explosives have been recovered in Mexico.
• The Mexican Army. More than 150,000 soldiers deserted in the last six years, according to Mexican Congressman Robert Badillo. Many took their weapons with them, including the standard issue M16 assault rifle made in Belgium.
• Guatemala. U.S. intelligence agencies say traffickers move immigrants, stolen cars, guns and drugs, including most of America’s cocaine, along the porous Mexican-Guatemalan border. On March 27, La Hora, a Guatemalan newspaper, reported that police seized 500 grenades and a load of AK-47s on the border. Police say the cache was transported by a Mexican drug cartel operating out of Ixcan, a border town.

Many of the fully automatic weapons that have been seized in Mexico cannot be found in the U.S., but they are not uncommon in the Third World.

The Mexican government said it has seized 2,239 grenades and rocket-propelled grenades (RPGs) in the last two years. The ones used in an attack on the U.S. Consulate in Monterrey in October and a TV station in January were made in South Korea. Almost 70 similar grenades were seized in February in the bottom of a truck entering Mexico from Guatemala.

“Most of these weapons are being smuggled from Central American countries or by sea, eluding U.S. and Mexican monitors who are focused on the smuggling of semiautomatic and conventional weapons purchased from dealers in the U.S. border states of Texas, New Mexico, Arizona and California,” according to a report in the Los Angeles Times.

Alberto Islas, a security consultant who advises the Mexican government, says the drug cartels are using the Guatemalan border to move black market weapons. Some are left over from the Central American wars the United States helped fight; others, like the grenades and launchers, are South Korean, Israeli and Spanish. Some were legally supplied to the Mexican government; others were sold by corrupt military officers or officials.

Chris Cox, spokesman for the National Rifle Association, blames the media and anti-gun politicians in the U.S. for misrepresenting where Mexican weapons come from.

“Reporter after politician after news anchor just disregards the truth on this,” Cox said. “The numbers are intentionally used to weaken the Second Amendment. The predominant source of guns in Mexico is Central and South America. You also have Russian, Chinese and Israeli guns.

Industry Conducts Second Annual Washington, D.C. Fly-In to Meet with Legislators

Recognizing the direction current political winds are blowing, the National Shooting Sports Foundation (NSSF) sponsored a second Legislative Fly-In for firearms and ammunition industry executives in early April in Washington, D.C. The nearly 40-industry member delegation heard a keynote address from Sen. Jon Tester (D-MT) and also remarks from Rep. Paul Broun (R-GA), co-founder of the Second Amendment Task Force.

“We have banded together to go up on Capitol Hill and talk to key legislators both in the House and Senate about issues that are really important to our industry. We create jobs in the United States and it’s important that they understand our point of view,” said Smith & Wesson Holding Corp. President and CEO Michael Golden.

This was the second year that the NSSF conducted the legislative effort in Washington, D.C., which was similar to the efforts formerly undertaken by the now defunct American Shooting Sports Council.

Commenting on the meeting, NSSF President Steve Sanetti said, “This was a tremendous opportunity for industry leaders to express their concerns to lawmakers. Participants identified those actions that needed to happen in order to keep America’s firearms and ammunition industry financially sound in an ever-changing global marketplace.”

Fly-In participants heard from Rep. Dan Boren (D-OK), co-chairman of the Congressional Sportsmen’s Caucus (CSC), and Rep. Ron Kind (D-WI), the immediate past co-chairman of the CSC, at a breakfast briefing sponsored by the Congressional Sportsmen’s Foundation (CSF). Other presenters included CSF President Jeff Crane, former congressman Lindsey Thomas, and Ron Regan of the Association of Fish & Wildlife Agencies before going to the Hill to meet with members of congress.

“It’s really critical that we come to Washington from time to time to tell our story,” said Sturm, Ruger CEO Michael Fifer. “If we’re not here telling our story, somebody else is going to tell it for us.”

Among the issues affecting the industry that were discussed was federal excise tax reform, the removal of anti-competitive export controls that harm U.S. manufacturers, support for keeping firearms tracing data secure within the law enforcement community (the Tiahrt Amendment), increasing funding for the Don’t Lie for the Other Guy anti-straw purchasing campaign and support for protecting today’s modern semiautomatic sporting rifles as the Obama Administration begins to move to reenact the federal ban on so-called “assault weapons.”

“These face-to-face meetings play an integral role in policy decisions that impact the everyday business of the entire firearms and ammunition industry,” said NSSF Senior Vice President and General Counsel Lawrence G. Keane. “Engaging legislators directly is a must and our team could not have done a better job representing their companies, employees and this industry.”

Gun Sales Tax Holiday Proposed in Louisiana

A New Orleans area lawmaker is proposing a state sales tax holiday for firearm purchases one weekend each year. Rep. Cameron Henry, a Republican from Jefferson, LA, calls his bill the “Second Amendment Recognition Act.” The proposed firearms sales tax holiday would occur annually on the Friday through Sunday after Thanksgiving, traditionally the busiest time of the year for firearms sales.

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. Visit www.FirearmsGroup.com. He may be reached at: FirearmsB@aol.com.

ATF has released its Annual Firearms Manufacturing and Export Report for the year of 2007.

These latest available production figures break down as follows: a total of 1,216,479 pistols were manufactured and 391,334 revolvers were produced. A total of 1,476,004 rifles were made in the U.S. during 2007 along with 643,722 shotguns.

On the export side, some 45,023 pistols, along with 34,662 revolvers, 74,753 rifles and 26,998 shotguns were exported during 2007.

The largest pistol manufacturer during the year was Smith & Wesson with 256,988 produced in Massachusetts and 45,635 made in Maine for a grand total of 302,623. Other notable makes during the year included Sturm, Ruger with production of 141,917 pistols.

SIG-Sauer did 111,653 pistols during 2007, while Beretta USA made 87,631 and Kel-Tec produced an impressive total of 103,893. Beemiller, Inc., also made an impressive showing with 78,090 pistols, while Kimber made 55,722 and Cobra Enterprises manufactured 36,396. Kahr Arms produced 26,166 pistols and Colt made 17,833.

By caliber groupings, 2007’s pistol production figures break down as follows:

• up to .22 – 180,216
• up to .25 – 11,309
• up to .32 – 43,905
• up to .380 – 138,484
• up to 9mm – 390,380
• up to .50 – 452,185

On the revolver side, Smith & Wesson also led the way with production of 196,255 units. Sturm, Ruger was in second place with 96,598. Other significant revolver makers during the year were Heritage Manufacturing with 39,352 units, North American Arms with 31,893 and Charco 2000 (Charter Arms) with a total of 14,294 revolvers.

By caliber, 2007’s revolver production breaks down as follows:

• up to .22 – 91,963
• up to .32 – 3,509
• up to .357 – 93,320
• up to .38 – 104,498
• up to .44 – 46,719
• up to .50 – 51,325

Rifles

In the rifle arena, Remington Arms Co. was the top producer with a production total of 283,588 units. In second place was Marlin with 227,855 rifles, followed by H&R 1871 with 97,390.

Other notable rifle producers were Henry Repeating Arms with 96,376, Bushmaster with 59,388 and DPMS with 58,674. Keystone Sporting Arms produced 47,438 rifles during 2007, Thompson/Center made 47,564, Smith & Wesson manufactured 24,676 and Century Arms made 24,185. Other makers included Beemiller with 19,200, Colt with 11,138 and Barrett with 4,479 rifles.

Shotguns

Counted as a whole, Mossberg produced the greatest number of shotguns during 2007 with 250,211 in its Connecticut factory and 66,831 made under the Maverick label in Texas. Remington produced 238,245 shotguns while H&R 1871 made 73,145 and Sturm, Ruger did 2,479.

Exports

The top pistol exporter during 2007 was Smith & Wesson with 22,288 units. Others included SIG Sauer, Inc. with 5,680 units, STI Intl. with 3,419 and Sturm, Ruger with export of 2,868.

Smith & Wesson was the most significant revolver exporter during 2007 with 30,220 units. Sturm, Ruger exported 3,015 units. The top two rifle exporters were Sturm, Ruger with 21,611 and Marlin with 20,672 units.

In shotgun exports, Mossberg was the leader with 18,678. H&R 1871 was in second place with 4,348.

Obama’s Gun Ban Plans Confirmed

U.S. Attorney General Eric Holder confirmed Americans’ worst fears in late February when he revealed that the Obama Administration would press for a range of national gun control measures – foremost being the reenactment of the federal ban on so-called “assault weapons” and making the law permanent.

“It’s something, as I said, that the president talked about during the campaign. It is something, however, that we still think would be an appropriate thing to do,” Holder said during an interview.

But House Speaker Nancy Pelosi (D-CA), who controls the House agenda, tried to back away from the issue. The Speaker gave a flat “no” when asked if she had talked to administration officials about the ban.

“On that score, I think we need to enforce the laws we have right now,” Pelosi said at her weekly news conference. “I think it’s clear the Bush administration didn’t do that.”

In response, the National Rifle Association said it would fight the ban. “We’re going to score the vote,” said Chris W. Cox, the NRA’s chief lobbyist. “President Obama spent tens of millions of dollars campaigning as a pro-Second Amendment candidate. So maybe he thinks he has enough political capital to do this. But I’m sure there are some Democrats at the White House and Capitol Hill who are cringing right now.”

Form 4473 Shortage

The Attorney General’s remarks caused a spike in gun sales which further exacerbated the critical shortage of ATF Form 4473. The ATF has issued a follow up to the January 6, 2009, Notice to All Federal Firearms Licensees (FFLs) regarding ATF Form 4473 availability. The January 6th notice provided authorization to FFLs to copy the ATF Forms 4473 for a limited time due to delays in the form’s printing and shipping.

Now, due to the limited supply of booklet-form canary yellow paper, the ATF Form 4473 will be distributed on white booklet-form paper. FFLs may continue to photocopy the Form 4473 in its entirety (including instructions) until they receive any backorders from the Distribution Center.

Additionally, due to the limited availability of the newly revised ATF Form 4473 Part I – Firearms Transaction Record Part I-Over-the-Counter (5300.9) (2008 Spanish Version), FFLs may photocopy this form as necessary.

The licensee must ensure that any photocopies are of good quality and obtain all of the required information on the printed forms. All completed forms must be maintained in accordance with the provisions of 27 CFR Part 478.129. All 6 pages of the form, including the instructions, must be stapled and maintained together. Licensees may contact their local field division’s industry operations offices for further information.

Firearms Sales Remain Strong

Firearm purchaser background checks, an indicator of actual sales, were up 24% at 1.5 million in December 2008 from the year earlier figure of 1.2 million, according to the FBI’s National Instant Criminal Background Check System (NICS).

November 2008 saw a 42% rise in NICS checks, the highest number of checks in the NICS system’s history. Some 12.7 million background checks were reported in 2008, a 14% increase from 2007.

A recent survey of gun owners by Southwick Associates found that 80% of respondents expected they would face challenges in purchasing firearms under the Obama Administration and the new Congress, which is dominated by Democrats.

AccuSport Offers Exclusive Retailer Software

After 40-plus years of filling out Form 4473 by hand, new high-tech EZ 4473 form filling software debuts as an exclusive offering by AcuSport Corp., the noted firearms wholesaler.

The use of the new software is in line with a recent ATF directive allowing the use of such software as an alternative to manually writing out the form by hand with ink. During the 2008 SHOT Show, a Las Vegas retailer was demonstrating the software in the AcuSport booth, before ATF had allowed such software’s use.

The form-filling software is said to guarantee complete and legible information is being obtained from gun buyers and it validates their age and residency. Transactions are not allowed to proceed with an improper “Yes” or “No” answer. Once the process is completed, the software prints the completed ATF Form 4473.

EZ-4473 aids retailers by helping to eliminate clerical errors and the risk of selling to an unqualified customer. Additionally, the software can streamline an ATF audit since records can be instantly searched by last name, date of sale, transaction number, serial number, etc. The software program digitally stores the form and customer information, which are protected by a powerful encryption program.

Jim Broering, AcuSport’s president, said, “This software eliminates any possibility of clerical mistakes that can result in a revoked federal firearms license. This software is extremely innovative and will surely benefit many entities in the firearms industry.”

ATF Considering Form Changes

The Bureau of ATF is considering making some unspecified changes to two of its forms according to a posting in The Federal Register.

The first involves ATF Form 5330.20 intended to prevent nonimmigrant aliens from purchasing firearms or ammunition. The other change involves ATF Form 5300.3A the out-of-business records request for entities ceasing operations. No further information on the proposed changes was available at press time.

Blackwater to Change Name

Blackwater Worldwide, the private security and training company whose work in Iraq was heavily criticized for the tendency of its operators to engage in firefights, is changing its name in hopes of developing a new image. The company is changing its name to “Xe” as it shifts its business focus.

Anne Tyrrell, a spokeswoman for the company, said it was changing its name because, “the idea is to define the company as what it is today and not what it used to be.” Tyrrell said there is no meaning to the new name, which is pronounced “zee.” Xe is also the chemical symbol for the element xenon.

The company made headlines in September 2007, during a chaotic confrontation in downtown Baghdad, when Blackwater contractors allegedly shot and killed 17 Iraqis in a crowded square. That incident led to congressional inquiries. Blackwater also had inked an agreement to serve as the training center for Heckler & Koch firearms, but that was rescinded after concerns were raised by the German government.

The company’s name – Blackwater – was inspired by the dark, brackish water on its expansive tract of land in North Carolina, near the Great Dismal Swamp.

Tyrrell said the Blackwater name is being shed from all business units. Blackwater Airships, which offers surveillance services for intelligence gathering, becomes Guardian Flight Systems.

Blackwater Target Systems, the unit that develops and builds targets, is now known as GSD Manufacturing. The most well-known part of the business, Blackwater Lodge and Training Center, will now be called U.S. Training Center.

RJ Hillhouse, a national security expert and author of the blog called The Spy Who Billed Me, said the company is “obviously trying to distance itself from their image as reckless cowboys that’s etched into the world’s mind from the September shooting. With a new name, there are a lot of people who probably won’t connect the dots. In a year or two, people won’t remember that’s Blackwater.”

ATF Offers State Laws Publication in Digital Format

ATF has announced that its widely-read publication, 2007, 28th Edition, State Laws and Published Ordinances-Firearms (ATF P 5300.5) is now available in digital form on CD-ROM.

Presented in an Adobe Acrobat PDF format, the publication appears as it would in print and the software allows reprinting by personal computer. The electronic format will make searching and identifying information easier.

The publication is designed to help federal firearms licensees comply with federal and state firearms laws by listing all state firearms laws on a state-by-state basis. The publication assists licensees in complying with the Gun Control Act of 1968 which prohibits licensees from selling or delivering a firearm to a non-licensee whose receipt or possession of the firearm would violate state or local laws applicable at the place of sale or delivery.

Further by checking this publication, licensees can ensure they are making lawful over-the-counter sales of long guns to out-of-state residents. Such transactions must meet the legal requirements of both the licensee’s and the purchaser’s state of residence. Copies of the CD-ROM will be mailed to all licensees. The paper version of the book is still available.

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. Visit www.FirearmsGroup.com. He may be reached at: FirearmsB@aol.com.

After a very quiet summer and lackluster autumn sales season, firearms industry sales became electrified in late October when it became evident that the Democrats would win the White House on Election Day.

Coming just six months after a landmark Supreme Court ruling confirming that the Second Amendment affirms and protects a fundamental individual civil right to keep and bear arms (which probably initially caused many gun owners to lapse into complacency thinking that the gun rights battle had been “won”), America is now faced with an incoming administration that the NRA calls “the most anti-gun in history”.

Far too many red flags have now been raised even for those who were supporters of Barack Obama during the campaign having relied on his vague statements of support for Americans right to keep and bear arms without ever going into specifics.

For those who could bypass the sophisticated, well-financed marketing campaign that delivered the Oval Office to Obama and had taken the time to do some research, they would have discovered that President-elect Obama is on record as supporting gun registration, permanent renewal of the federal ban on so-called “assault weapons”, adding an exorbitant increase to the federal excise tax on firearms and ammunition, undoing “shall issue” concealed carry legislation in the states and banning handgun ownership outright. Vice president-elect, Delaware Senator Joe Biden, a veteran gun-banner, is the actual author of the original federal “assault weapons” ban legislation.

Obama’s staff appointments in recent weeks have further driven gun and ammo sales. Rahm Emanuel as his chief of staff who was the former point man for the Clinton Administration on gun control issues and Eric Holder, his nominee for U.S. Attorney General, also a former Clinton Administration official, formerly used the power of the U.S. State Department’s import regulation authority to stifle the imports of firearms and ammunition for American shooters and collectors. Holder also signed an amicus brief in support of the Washington, D.C. gun ban.

The more the Democrats talk about “change” the more things actually stay the same – or actually regress. By bringing back anti-gun stalwarts from the Clinton Administration, there can be no doubt of what the new administration has in store for America’s gun owners. And that is why firearms sales, particularly tactical models, have spiked. Mail order ammunition marketers who sell in case lots also report sales have gone through the roof as Americans begin to hoard ammo in anticipation of surplus ammo import bans and the imposition of high ammo taxes on domestic products from the new Administration.

ATF Announces the Release of the e-Form 4473

The ATF has released an electronic ATF Form 4473 (5300.9), Firearms Transaction Record Part I, Over-the-Counter, in response to requests from the firearms industry. FFLs may download the e-Form 4473 from the ATF Web site at www.atf.gov/applications/e4473/.

The e-Form 4473 is an automated software program designed to reduce errors and identify omissions through the use of prompts in the accurate completion of the form. Through the use of pop-ups and warnings, FFLs are alerted to possible prohibited transactions, helping to ensure that firearms are kept out of the hands of prohibited persons.

The most prominent benefits of using e-Form 4473 are its ability to identify the omission of required information and assistance in preventing the transfer of a firearm(s) to prohibited persons. Though the information is entered into a computer, the information will be printed onto paper, and will replicate an ATF Form 4473, which is reviewed and certified by both the seller and purchaser. Using these techniques, the e-Form 4473 helps minimize errors and omissions, and alerts the FFL to possible prohibited sales (i.e. felons, underage purchasers, etc., or answers which indicate possible prohibited purchasers).

The software is compatible with most personal computers or Macintosh workstations and can be integrated into many Point-of-Sale (POS) systems. No fee is required to download the form. Once downloaded, it is not tied to any ATF computer system, and no information on e-Form 4473 is transmitted to ATF.

Once FFLs have accessed the ATF e-Form 4473 website they will be able to:

• reference the list of System Requirements and Supporting Software
• access links to download the supportive software
• access the Frequently Asked Questions (FAQ’s) section
• obtain support via email e4473@atf.gov
• download and install the ATF e-Form 4473 program on their computers. (While you may get a message that states that the time it takes to download the application is rather lengthy. The actual download will only take 3-5 minutes.)
• download copies of the e-Form 4473 User’s Manual, Seller’s Quick Reference Guide, and the Buyer’s Quick Reference Guide.

ATF Ruling 2008-3:

ATF Ruling 2008-03 allows FFLs to use any electronic 4473 (ATF’s or any commercial software product) provided it meets some basic criteria as outlined in the ruling. Under this ruling, if a licensee meets the basic criteria, a licensee will not have to request a variance to use any electronic 4473. The FFL must still comply with all law and regulation requirements. (http://www.atf.gov/firearms/rules/index.htm).

ATF will continue to seek and welcome feedback from users on further enhancing its electronic forms.

Sensation Over Palm Pistol Results in Loss of FDA Classification

The recent flurry of media attention on a new and unique, but as yet not on the market firearm product to be called the “Palm Pistol” has resulted in the Food and Drug Administration withdrawing and canceling its classification of the firearm as a “Class I Medical Device” as such is defined in the federal Food, Drugs and Cosmetic Act. The brief six day period (from December 2 to 8) when the pistol was registered with the FDA, was probably the first time ever that a firearm was listed as a medical device.

The single shot 9mm pistol is intended to be marketed by Constitution Arms, a New Jersey firm headed by Matthew Carmel who is in the process of gathering investors and hopes to have the unique single-shot design in production by the year 2010. The pistol is an ergonomically novel double-action only defensive firearm that uses the thumb for firing pin release instead of the index finger. Being somewhat oval in shape, with trigger releases at its top and bottom ends, and a protruding barrel, the device does not look anything like a firearm. However, Carmel has a letter from the ATF Firearms Technology Branch stating that his invention does not meet the definition of an Any Other Weapon, and thus could be sold subject to the same regulations as any common handgun.

Despite the declassification of his design as a medical device by the FDA, which may be appealed, Carmel says he is still moving ahead with his plans to design and produce the Palm Pistol. One major group to which the pistol is intended to be marketed is to handicapped individuals with limited ability to use their hands as the device may readily be used by those with limited finger and hand mobility.

Carmel had hoped to obtain a Center for Medicare and Medicaid Services Durable Medical Equipment (DME) coding for the Palm Pistol. Among the conditions to be met to obtain this coding is that the device “primarily be used to serve a medical purpose” and is “suitable for use in the home.” Carmel’s argument says that his device meets this definition.

Carmel believes his pistol meets this definition as the medical purpose served is the extension of life expectancy – i.e. “all living individuals are subject to the ‘injury’ of shortened life expectancy due to loss of life from criminal assault and it (the pistol) most assuredly is appropriate for use in the home. An additional function of the device is prevention of sudden onset death” (such as from a criminal attack) “analogous to the benefits offered by on-body alarm systems which permit independent unassisted living without the need for Certified Nursing Assistants.”

Carmel added, “If we are successful in obtaining DME coding, it is possible the medically-prescribed purchase of the Palm Pistol will be reimbursable by Medicare or private health insurances companies for qualified insured’s!”

The declassification of the pistol by the FDA has put a halt to Carmel’s efforts to obtain DME coding.

More details on the design and additional information can be found on line at www.palmpistol.com.

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. Visit www.FirearmsGroup.com. He may be reached at: FirearmsB@aol.com.

The Bureau of Alcohol, Tobacco, Firearms & Explosives has revised ATF Form 4473 (Firearms Transaction Record Part I – Over-the-Counter). The new form includes numerous changes as follows:

GENERAL

• Color. Changed the color of the form from white to yellow. This change will ensure FFLs do not use obsolete versions of the form.
• Form. The form is composed in a booklet format.
• Blocked Format. Streamlined the recordkeeping process to help ensure all required entries are accurately completed.
• Warning Statement. Added law cites “18 U.S.C. Section(s) 921 et.seq.” Bolded and put into all capital letters “PLEASE PRINT” and added “handwritten in ink.”
• Page Numbering. Each page is now numbered, and if pages are separated must be stapled together. The page also guides the transferee (buyer) and transferor (seller) to continue to the next page where needed.

SECTION A

• Question 2. U.S. Postal abbreviations are acceptable. Made block for county wider.
• Question 3. Changed question to read “U.S. City and State or Foreign Country.”
• Question 5. Added “lbs.” to clarify weight is being asked in pounds.
• Question 9. Added instructions for the buyer “see instructions for question 9.”
• Question 10. Added instructions for the buyer “see instructions for question 10.”
• Question 11. Added instructions for buyer to clarify answering this section “Answer questions 11.a. (see exceptions) through 11.l. and 12 (if applicable)” by checking or marking “yes” or “no” in the boxes to the right of the questions.
• Question 11.a. Added instructions for the buyer “see instructions for question 11.a. Exception: If you are picking up a repaired firearm(s) for another person, you are not required to answer 11.a. and may proceed to question 11.b.” Added a block for “yes” to be checked or marked and a block for “no” to be checked or marked.
• Question 11.b. Added instructions for the buyer “see instructions for 11.b.” Added a block for “yes” to be checked or marked and a block for “no” to be checked or marked.
• Question 11.c. Added instructions for the buyer “see instructions for 11.c.” Added a block for “yes” to be checked or marked and a block for “no” to be checked or marked.
• Question 11.d. Added a block for “yes” to be checked or marked and a block for “no” to be checked or marked.
• Question 11.e. Added a block for “yes” to be checked or marked and a block for “no” to be checked or marked.
• Question 11.f. Added instructions for the buyer “see instructions for 11.f.” Added a block for “yes” to be checked or marked and a block for “no” to be checked or marked.
• Question 11.g. Added a block for “yes” to be checked or marked and a block for “no” to be checked or marked.
• Question 11.h. Added instructions for buyer “see instructions for question 11.h.” Added a block for “yes” to be checked or marked and a block for “no” to be checked or marked.
• Question 11.i. Added instructions for buyer “see instructions for question 11.i.” Added a block for “yes” to be checked or marked and a block for “no” to be checked or marked.
• Question 11.j. Added a block for “yes” to be checked or marked and a block for “no” to be checked or marked.
• Question 11.k. Added a block for “yes” to be checked or marked and a block for “no” to be checked or marked.
• Question 11.l. Added “see instructions for question 11.l.” Added a block for “yes” to be checked or marked and a block for “no” to be checked or marked.
• Question 12. Added information “If “yes,” the licensee must complete question 20.d. See instructions for question 12. If question 11.l. is answered with a “no” response, then do NOT respond to question 12 and proceed to question 13.” Added a block for “yes” to be checked or marked and a block for “no” to be checked or marked.
• Question 13. Changed question to read “What is your State of residence (if any)? (See instructions for Question 13.)” Blocked questions 13-15 to make the form easier to follow.
• Question 14. Added “If you are a citizen of the United States, proceed to question 16.” Blocked questions 13-15 to make the form easier to follow.
• Question 15. Blocked questions 13-15 to make the form easier to follow.

PAGE 2 of FORM 4473

• Certification Statement for buyer. Added “complete,” moved “and” to make statement read “I certify that my answers to Section A are true, correct, and complete.” Reworded second sentence to read “I have read and understand the Notices, Instructions, and Definitions on ATF Form 4473.” Added “and may also violate State and/or local law” in the third sentence and the second-to-last sentence. Also added “(See Instructions for Question 16).”
• Question 18. Changed “Both” to “Other Firearm (Frame, Receiver, etc. See instructions for Question 18.)” and added “(check or mark all that apply):”
• Question 19. Added “Name of Event” and a line for writing. Moved “City, State” to the front of line.
• Question 20.a. Added “(e.g. Virginia driver’s license (VA DL)” and “(See Instructions for Question 20.a.)”; also added “Issuing Authority and” before type of identification.
• Question 20.c. Added “All Aliens,” removed “only,” and added “(See Instructions for Question 20.c.).”
• Question 20.d. Added “Must Provide,” bolded the word “exception,” and added “(See Instructions for Question 20.d.).”
• Question 21.a. Date was put into a blocked format and added “Month, Day, Year.”
• Question 22. Added “(See Instructions for Question 22).”
• Section C. Added “Must be Completed Personally by Transferee (Buyer).”
• Below Section C and before signature. Added “(See Instructions for Question 24 and 25).”
• Above Section C signature line. Added “and complete” to wording.
• End of Page 2. Added page numbering 2 of 6. Each page is now numbered and a statement “DO NOT SEPARATE PAGES” has been added. The page also guides the transferee (buyer) and transferor (seller) to continue to the next page where needed.
• Question 26. Added “(If the manufacturer and importer are different, the FFL should include both.).”
• Question 29. Added “receiver, frame” and “(See instructions for question 29).”
• Question 30.a. Added block “Total Number of Firearms (Please handwrite by printing e.g., one, two, three, etc. Do not use numerals).”
• Question 30.b. Added block “Is any part of this transaction a Pawn Redemption?” with a “Yes” or “No” block for marking.
• Question 30.c. Added block “For Use by FFL (See Instructions for Question 30.c.).”
• Question 32. Added “(Must contain at least first three and last five digits of FFL Number X-XX-XXXXX).”
• Certification Statement for seller. Added “I certify that my answers in Sections B and D are true, correct, and complete.” Reworded second sentence to read “I have read and understand the Notices, Instructions, and Definitions on ATF Form 4473.”
• Question 33. Bolded “please print.”
• Question 36. Changed question to read “Date Transferred.”
• Notices, Instructions, and Definitions. Combined “Important Notices” “Instructions to Transferee/Buyer,” “Instructions to Transferor/Seller,” and “Definitions” to apply to each question.
• Purpose of the Form. (Previously number 2 under “Important Notices”) Added “lawfully,” changed “keep” to “maintain,” and added after long gun “(rifle or shotgun).”

Licensees may order a supply of Form 4473s on-line at: http://www.atf.gov/dcof/index.htm or by contacting the ATF Distribution Center at (703) 455-7801.

Notes on ATF Compliance Inspections

With certain exceptions, the GCA allows ATF to conduct one warrantless, annual compliance inspection of a federal firearms licensee (FFL). The purpose of the inspection program is to educate the licensee about regulatory responsibilities and to evaluate the level of compliance.

During inspections, ATF industry operations investigators (IOI) review records, inventory, and the licensee’s conduct of business. Compliance failures, which constitute violations of law and regulation, commonly disclosed during the inspection process include failure to verify purchaser eligibility; inability to account for firearms received and disposed; failure to ensure firearms traceability due to improper recordation of firearms receipt and disposition; failure to properly document firearms transfers; and failure to report multiple sales of handguns.

During compliance inspections conducted in 2007, ATF investigators identified nearly 130,000 firearms that FFLs could not locate in inventory or account for by sale or other disposition. By working with industry members, IOIs reduced this number to approximately 31,000 firearms that FFLs could not account for. As such, ATF investigators improved the success rate of potential firearms traces of previously unaccounted firearms by 76 percent. Although this is a significant improvement, over 30,000 firearms remained missing.

When violations of the law and regulations are disclosed during an inspection, a Report of Violations is issued to the licensee that outlines the discrepancy and the requirements for corrective action. ATF also works to gain cooperation and compliance from FFLs by issuing warning letters and holding warning conferences.

In Fiscal Year 2007, ATF conducted approximately 10,000 compliance inspections. More than 40 percent of the licensees inspected were determined to be in full compliance with the law and regulations and no violations were cited. Approximately 100 federal firearms licenses were revoked or were denied renewal due to willful violations of the GCA. This figure is approximately 1 percent of the number of licensees inspected.

License Revocation Process

When an ATF inspection results in a warning conference or potential revocation, the licensee is provided an opportunity to develop a written plan that details the steps taken to correct the problems identified and measures implemented to ensure future compliance. To assist licensees in achieving and maintaining compliance, ATF conducts recall inspections on all licensees who have committed violations that warranted a warning conference. In 2007, recall inspections resulted in an overall 85-percent reduction in the total instances of violations. Recall inspections also resulted in a 78-percent reduction in disclosed prohibited sales and a 90-percent decrease in inventory discrepancies.

Willfulness is not defined in the regulations but is defined by case law to mean the intentional disregard of a known legal duty or plain indifference to a licensee’s legal obligations. ATF does not revoke for all willful violations. Recommendations for revocation often result from FFLs repeating violations despite ATF efforts to educate and assist them with compliance. Violations commonly cited in revocation cases include failure to account for firearms, failure to verify and document purchaser eligibility, failure to maintain records requisite for successful firearms tracing, and failure to report multiple sales of handguns.

The revocation process begins when an IOI recommends revocation following an inspection. The recommendation is subject to a rigorous, thorough internal review process. The authority to revoke rests with ATF’s directors of industry operations (DIO). If the DIO concurs with revocation of the license, the report is reviewed by ATF field division counsel for legal sufficiency.

To ensure consistency throughout the country, a newly implemented procedure requires the DIO to notify Bureau Headquarters of his or her preliminary decision to pursue revocation. If the DIO, division counsel, and Headquarters review results in disagreement on pursuing revocation, the report is reviewed and a final determination is made by a panel consisting of two Headquarters deputy assistant directors and the deputy chief counsel.

If revocation is pursued, procedures are followed as specified under Title 27 Code of Federal Regulations Part 478. The licensee is provided with a Notice of Revocation that includes findings describing the reasons for pursuing revocation. The licensee has 15 days from receipt of the notice to request a hearing before a hearing officer. The licensee may be represented by an attorney at the hearing and may bring employees and documentation to address the violations cited in the notice. ATF is generally represented at hearings by ATF Counsel and the IOIs who conducted the inspection(s) resulting in the revocation recommendation. Unless special circumstances apply, the licensee can continue operations while a final decision is made by the DIO.

During a hearing, the licensee has the opportunity to challenge the violations, establish that the violations were not willful, and address intention for future compliance. Based on the evidence presented at the hearing by the licensee and ATF, the hearing officer submits a report of findings and a recommendation to the DIO. Based upon the hearing testimony, exhibits presented during the hearing, and the hearing officer’s recommendation, the DIO decides whether to continue with the revocation. If the DIO’s decision is to revoke following a hearing, or in cases where a hearing is not requested, then a Notice of Final Revocation is sent to the licensee with a summary of the findings that warrant revocation.

A licensee who receives a Notice of Final Revocation may, within 60 days of receipt of the final notice, file a petition for de novo review with the U.S. District Court. If the licensee makes a request to the DIO to allow continuance of business operations, the DIO may allow the licensee to operate during the appeal process. If the DIO prohibits continuance of operations during judicial review because of the risk to public safety, the FFL can appeal to the court to continue operations during the review process. Of those cases that were appealed to the U.S. District Court between April 2001 and April 2008, 49 of 52 final decisions in District Court have supported ATF’s decision to revoke.

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. Visit www.FirearmsGroup.com. He may be reached at: FirearmsB@aol.com.