NY Court Rules Against Producing Trace Data

Justice Frederick J. Marshall of the New York State Supreme Court, Erie County, has ruled that defendants in the Williams v. Beemiller, et al. case do not have to produce firearm trace data that plaintiffs sought as part of their “jurisdictional” discovery requests. The judge cited the Tiahrt Amendment in the Nov. 25 ruling.

Justice Marshall’s ruling helps close the door on private individuals seeking trace data directly from FFLs and the admissibility of such information in litigation. Though trace data does not constitute business records, the case serves as a warning to FFLs that their private business records are discoverable, according to NSSF.

Reid Says Gun Control Will Not Pass

U.S. Senate Majority Leader Harry Reid (D-Nev.) has said again that he does not have the votes to bring a gun control bill to the floor. “I would love to bring it back up, but I can’t do it until I have the votes, and at this stage I don’t have the votes,” Reid told reporters recently. (© FB/IFT)

Sturm, Ruger’s 2nd-Quarter Sales Up

Sturm, Ruger & Co. has reported that second-quarter sales were up 45% and earnings increased 64% compared to the same period a year ago. Said CEO Michael Fifer, “New product introductions were a significant component of our sales growth as new product sales represented $146.6 million, or 32%, of firearm sales in the first nine months of 2013.”

ATK’s 2nd- Quarter Sales up 48%

ATK has reported that second-quarter sales in its Sporting Group – which includes ammunition for law enforcement, military and sporting applications as well as optics, reloading gear and sport-shooting and tactical accessories – were up 48% to $421 million compared to $284 million in the same period last year.

The company said the increase in sales was driven by higher volume in ammunition, sales from Savage of $57 million and a previously announced ammunition price increase, partially offset by a decline in sales in tactical military accessories. ATK reported that its overall net income for the quarter was up 42%.

Interstate Handgun Sale Act Introduced

U.S. Rep. Steve Scalise (R-La.) has introduced the Firearms Interstate Commerce Reform Act (HR 3335) to allow for the out-of-state sale of handguns to law-abiding citizens. While current technology makes the ban on interstate sales of handguns an anachronism in modern times, it stands zero chance of passage in the Democrat controlled Senate.

Excise Tax Revenue Up to Record Levels

The latest Firearms and Ammunition Excise Tax Collection report released by the Department of the Treasury indicates that firearm and ammunition manufacturers reported tax liabilities of $224.3 million in the second calendar quarter of 2013, up 40.3% over the same time period reported in 2012.

This 2013 second-quarter total surpasses the previous highest quarter reported (1st quarter 2013) by 12.6%. The report, which covers April 1, 2013 through June 30, 2013, shows that $64.6 million was due in taxes for pistols and revolvers, $82.5 million for firearms (other)/long guns and $77.2 million for ammunition (shells and cartridges). Compared to the same time period in 2012, tax obligations were up 23% for pistols and revolvers, up 43.3% for firearms (other)/ long guns and up 55% for ammunition.

Canadians Need An I-94 Number to Buy Guns

Nonimmigrant aliens entering the United States are admitted under different classes/categories. Canadians are considered non-controlled aliens and commonly admitted under class/category V (Visitor for business or pleasure). Nonimmigrant aliens receiving an I-94 number are normally entered under categories E and K.

The issuance of an I-94 number is a manual process (may include a small fee) and not necessary for visitors of business or pleasure, including Canadians. For firearm sales, a nonimmigrant alien must possess an I-94 number. Therefore, for a Canadian to purchase a firearm in the United States through an FFL, they will need to obtain an I-94 number.

Responsible Persons on an FFL

Neither the Gun Control Act (GCA) nor its implementing regulations specifically define the term “responsible person.” ATF derives its interpretation of that term from 18 U.S.C. §923(d)(1)(B), to mean an individual who has the power to direct the management and policies of the business entity for which the federal firearms license is being applied. Reference the March 2006 FFL Newsletter:

An existing responsible person (RP) under the applicable federal firearms license must request the addition of the new RP in writing. Written correspondence can be addressed directly to the appropriate Federal Firearms Licensing Center (FFLC) examiner on letterhead or by email. The addition of a new RP does not have to be submitted on a Form 7.

Photographs and fingerprint cards (FPC) must be submitted in addition to all required personal information. If the RP being added to the license is currently an RP on an existing license, no new photographs, or FPCs need to be submitted, but a new background check must be completed before approval of the addition can occur. However, don’t expect ATF to notify you if the new RP is approved – it won’t. ATF will only notify you if the RP is disapproved. To find your FFLC examiner, visit www.atf.gov/files/contact/service-centers/fflc-distribution-map.pdf. Corporate account examiners and a staff directory can be found at: www.atf.gov/contact/service-centers/index.html.

To delete an existing RP under the applicable license, each licensee must also request this deletion in writing to the FFLC.

Transferring Firearms from FFL to Personal Collection

If your business is a sole proprietorship, no ATF Form 4473 or NICS check is required to transfer a firearm from your business inventory to your personal collection.

However, the acquisition and disposition (A&D) record must reflect the disposition of the firearm from business inventory to personal use, and the date of such transfer. Note that if you wish to dispose of the firearm prior to it being held as part of your personal collection for one year, you are required to re-enter the firearm into the A&D record, complete an ATF Form 4473, and conduct a background check on the transferee. However, if the firearm is maintained in your personal collection for one year or longer from the date the firearm was transferred from the business inventory, you are not required to comply with the provisions of §478.102 or 478.124. Reference 27 CFR 478.125a.

An ATF Form 4473 and NICS check is required when a corporation, LLC, or partnership holding a federal firearms license transfers a firearm to one of its officers (or partners in the case of a partnership) for his or her personal use. The disposition of this firearm must also be recorded in the A&D record.

Report Deaths of FFL Responsible Persons

The Federal Firearms Licensing Center reminds all licensees of the requirement to report deceased responsible persons (RP) to the FFLC within 30 days, so the RP can be deactivated in FFLC’s system.

The deactivation of a deceased RP may lead to the right of business succession. Certain persons other than the licensee may secure the right to continue business with the license at the same address on, and for the remainder of the term of, the current license. Upon expiration of the license, the successor would be required to apply for a new license if they wish to continue operating. (A successor cannot renew the existing license.) The guidance for Right of Succession (27 CFR 478.56) is also located on the face of the license. In the case of a Corporation, only a legal corporate entity may continue to be licensed.

If after the death of an individual the corporation is dissolved under state law, the entity no longer exists and may no longer be licensed. For further information or clarification on how the deactivation of a deceased RP may affect your license, please contact ATF Customer Service at (866) 662-2750.

New E-Check Claimed to be Improved

The FBI NICS E-Check has been upgraded and is now said to provide a much more user-friendly experience.

The biggest obstacle many FFLs identified with the old version of the E-Check was that it was difficult to set up on additional computers. Additionally, the old version of the E-Check was not compatible with many browsers.

The new E-Check 2.0 allows you to access the system from any computer or any browser. The FFL and/or manager receives administrative controls, which includes the ability to create and modify accounts. The E-Check 2.0 does not require a digital certificate to be downloaded to your computer. This makes it easier to use from any browser using a computer, laptop, tablet, smart phone, etc. You will log into FBI NICS E-Check using a user name and password similar to how you log in to most on-line accounts.

NFA Paperwork

ATF has become aware of fraudulent misuse of paperwork associated with National Firearms Act (NFA) firearms.

ATF strongly recommends that you never give anyone a copy of the applicable form that is to stay with your NFA firearm. In addition, please be aware that there are several areas to inspect if you are examining an NFA form for transfer. The ATF NFA Branch assigns a control number to every transfer, which is stamped on the applicable NFA form. Also, the serial number for the firearm is included in the tax stamp that is affixed to the applicable NFA form.

Should you suspect any misuse of NFA approved forms, please contact your local ATF office. A listing of the offices may be found at: www.atf.gov/content/contact-us/local-atf-offic.

Note on FFL Responsible Persons

The Federal Firearms Licensing Center reminds all licensees that an ATF Form 2.5330.20-Certification of Compliance with 18 U.S.C. 922(g)(5)(B) (COC) is currently required for each and every responsible person (RP) every three years, when submitting your renewal application (as indicated in Part C, question 6 on the ATF Form 8 Part II).

The Chief Law Enforcement Officer (CLEO) information is required on all renewals as well. The CLEO information should be entered in Part C, question 4 by the RP completing the renewal form. The CLEO should not complete any part of the application and should not sign the application. The RP completing the renewal should sign the renewal, thereby certifying that all of the information provided is true and correct to the best of his or her knowledge, and that a copy of the application has been provided to the CLEO, as required.

The failure to complete the COC and CLEO information on renewals generate the most returns from the FFLC, which ultimately delays the issuance of the renewed license.

Court Rules Sheriffs Cannot Participate In Suit

A lawsuit seeking to overturn two new Colorado gun-control laws remains alive despite a judge’s ruling that county sheriffs cannot participate. The lawsuit will move forward on behalf of other organizations that support gun rights, which had joined 55 of the state’s 64 sheriffs as plaintiffs.

Chief U.S. District Judge Marcia Krieger ruled that the sheriffs, in their official capacities, do not have standing to challenge the laws. They can join the suit as individuals, however.

The lawsuit seeks a decision from Krieger that the laws are unconstitutional. One of the laws bans magazines with capacities of more than 15 rounds. The other imposes fees and requires background checks for private transfers of firearms. The laws took effect July 1. (© FB/IFT)

Facing the Recall Music, CO Legislator Resigns

Sen. Evie Hudak (D-Westminster, Colo.) became the latest target of recall elections, resigning her seat in the Colorado Legislature just days before opponents were expected to turn in signatures to try to oust her from office.

She was targeted for her support of strict gun-control legislation, which did not sit well with much of her constituency. By resigning, Hudak ensured that Democrats would keep their narrow one-vote majority in the next legislative session, because a committee from the Democratic Party will appoint her replacement. If recalled, voters could have replaced her with a Republican.

November NICS Stats Down Over 14%

What will likely turn out to be an unprecedented gun sales slow-down continues with the November 2013 NSSF-adjusted National Instant Criminal Background Check System (NICS) figure of 1,308,100 is a decrease of 14.2% compared to the NSSF-adjusted NICS figure of 1,525,177 in November 2012.

For comparison, the unadjusted November 2013 NICS figure of 1,805,759 reflects a 9.6% decrease from the unadjusted NICS figure of 1,997,703 in November 2012. NSSF-adjusted NICS for November 2013 is the second highest on record — an 18.8% increase over November 2011.

Plastic Gun Ban Signed Without Schumer’s Trick

A 10-year renewal of the so-called “Undetectable Firearms Act” has been signed into law, without the polymer magazine ban trick Sen. Schumer (D-NY) attempted to insert into it.

Just before the Senate recessed in late November for two weeks, Sen. Schumer abruptly called for unanimous consent for a one-year extension to the Undetectable Firearms Act. Up to that point, all discussion in both the House and Senate were for five or 10 year periods.

His scam was to have the bill expire again during the Senate’s lame duck session in 2014. At that point, Schumer and his compadres on this effort (which included Patrick Leahy (D-VT) who, like Schumer, proclaims himself to be “pro-gun” to constituents) could tack on the gun-control expansions that their vulnerable Democrats in rural and western states would not support in an election year, The Washington Times reported.

Schumer and some Democrats on the Judiciary Committee, such as Leahy, had been trying recently to expand the scope of the so-called “plastic gun ban” ban to include millions of existing and non-threatening polymer magazines.

Sen. Jeff Sessions, the Alabama Republican who is on the Judiciary Committee, objected to Schumer’s request and asked the bill be done in regular order.

Schumer protested not moving immediately. He said on the floor that, “What makes us need to do this rather quickly is that a few months ago someone in Texas published on a website a way to make a plastic gun, buying a 3D printer for less than $1,000.” He’s referring to Cody Wilson who printed a plastic gun which he calls “The Liberator.”

The Times reported that current federal law states that a firearm has to have 3.7 oz. of steel in it — after removing the grips, stocks and magazine. With the invention of 3D printers, a few people have technically abided by the law by adding a non-functional steel clip to the firearm. Even though Wilson has a federal manufacturer’s license, which exempts him from the law, he added a piece of steel to his gun to make it compliant. The Democrats then attempted to create a non-existent political controversy for public relations purposes.

Connecticut Democratic Sen. Richard Blumenthal put out a press release Friday that falsely blamed Sen. Sessions for blocking the bill permanently. Mr. Blumenthal theatrically stated that, “Delaying these protections simply puts innocent American lives at risk.”

Sen. Chuck Grassley, the ranking Republican on the Judiciary Committee, was outraged by the games being played by Democrats. “Congressional Republicans support a lengthy extension of the ban on firearms that cannot be picked up by metal detectors,” the Iowa Republican said in a statement. “Rather than working with us, they sought to move their inadequate bill just before the Senate adjourned, intending to make Republicans object. Democrats have knowingly mischaracterized this debate.” The statute has actually been led by Republicans in the past. It was originally signed into law in 1988 by President Reagan. The GOP congress passed it with strong bipartisan support in 2003, and President George W. Bush signed it.

The author publishes two of the small arms industry’s most widely read trade newsletters. The International Firearms Trade covers the world firearms scene, and The New Firearms Business covers the domestic market. He may be reached at: FirearmsB@aol.com.

By Robert M. Hausman

Ruger Notes, Explains its Sales Decline

For the third quarter of 2014, net sales were $98.3 million and fully diluted earnings were $0.34 a share. For the corresponding period in 2013, net sales were $170.9 million and fully diluted earnings were $1.44 per share. For the first nine months of 2014 net sales were $421.9 million and fully diluted earnings were $2.69 per share.

For the corresponding period in 2013, net sales were $506.4 million and fully diluted earnings were $4.25 per share.

Ruger‘s sales decreased 43% year-over-year and the estimated sell through from the independent distributors to retail decreased 44% year-over-year. During this period, consumer demand appeared to decrease only 3% year-over-year as indicated by NICS background checks. Ruger stated several reasons why the company’s sales and sell through decreased more than NICS checks year-over-year in the third quarter.

With the slowdown in consumer demand, Ruger believes many retailers felt fully stocked and were buying fewer firearms than they were selling in the third quarter in an effort to reduce their inventories and generate cash. By itself, that does not necessarily mean that the company lost any market share.

Many of Ruger‘s competitors were engaging in aggressive price discounting while Ruger says it maintained its price discipline. This continued through the third quarter. Even though many retailers were curtailing their overall purchases some of these discounts were too attractive to ignore and many retailers responded to it.

As in the second quarter, the company maintained price discipline through the third quarter in spite of the continued heavy discounting by competitors. This action very likely resulted in a loss of market share, especially at Ruger’s largest national chain accounts.

New product introductions are an important driver of demand regardless of the political environment with a level of competitors discounting. Early in the third quarter of 2014, Ruger launched the LC9s pistol, an improved striker fire replacement for the popular LC9. The new firearm was well received in the marketplace and initial results were satisfactory with the new firearms stopping the decline in demand for the LC9 platform.

Late in the third quarter, the new AR556 modern sporting rifle was launched. The quantities of AR556 shipped in the third quarter were too small to have much impact on the quarter’s results but the rifle is expected to result in incremental sales for the company going forward.

Ruger’s earnings decreased 76% and its EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) decreased 61% from the third quarter of 2013. The biggest driver of reduced operating margins was the significant decrease in sales of both firearms and firearms accessories. The next biggest driver of reduced operating margins was the deleveraging of fixed costs including depreciation, indirect labor, engineering, and product development costs.

A consequence of price discipline is that there is no pressure relief when distributors have sufficient inventory but demand continues to decline. The only relief is to cut production levels. Ruger continued to cut production levels ever more aggressively during the third quarter as it became evident that there was no improvement in demand. In aggregate, Ruger cut total unit production by 36% year-over-year for the third quarter.

Inventory levels of products at the independent distributors and at the company are now said to be adequate and production rates are close to the estimated distributor sell through to retail. At the end of the third quarter, production levels were approximately 5,750 units per day, a rate of about 1.4 million units per year.

Going forward, Ruger‘s strategy is to use new product introductions to spur demand and to adopt lean methodologies throughout the business to enable it to more efficiently fulfill that demand.

Citing Declining Sales, Colt’s May Default on Loan Payments

Weakening demand for its sporting rifles and handguns in the past year have sharply decreased revenues at Colt Defense LLC, and the gun maker reports that it is at risk of defaulting on a $10.9 million loan payment due shortly.

In a filing with the U.S. Securities and Exchange Commission dated Nov. 12, Colt reported that it is seeking an amendment to the loan and is trying to raise cash but without assistance could default on the loan by year’s end.

Operating income for the quarter ending Sept. 28 was down 50 to 60%, according to the filing. Sales were down 25 to 35%.

Delays in sales to the U.S. government, as well as “the timing of certain international sales,” also hurt the company’s revenues, the filing said.

Colt, based in West Hartford, has a grace period for making the Nov. 17 payment through December 15th, but it will be in default if that payment is missed, the filing reports. Even if it does make that payment, though, “it is probable that the company will not be in compliance with the company’s term loan … at Dec. 31.”

Company Future at Risk

“The company does not have sufficient funds to repay all of its debt upon an actual acceleration of maturity,” the filing states. “Lenders would likely take actions to secure their position as creditors and to mitigate their potential risks. These conditions would adversely impact the company’s liquidity, and raise substantial doubt about the company’s ability to continue as a going concern.”

Colt Defense LLC reunited its military and civilian handgun businesses in July 2013 with a $60.5 million acquisition of Colt Manufacturing Co., a decade after they were split apart. At the time of the merger, it was carrying $250 million in debt. Even then, analysts expressed concerns that Colt would have a difficult time meeting the obligations on the debt.

“The commercial business has done better than we thought, so that’ll be a bit of an offset, but still it’s not nearly enough to come up with the money to pay off those notes,” Christopher Denicolo, an analyst at S&P, said at the time.

SAF Supporting California Dealer Lawsuit v. Kamala Harris

The Second Amendment Foundation has joined the Calguns Foundation and California Association of Federal Firearms Licensees in support of a lawsuit filed by four California gun dealers against State Attorney General Kamala Harris, alleging a violation of their First Amendment rights.

The lawsuit alleges that the California Penal Code violates the First Amendment rights of the plaintiffs by prohibiting them from displaying images of handguns or even the word “handguns” where they would be visible to passersby. However, anti-gun protesters are still allowed to appear with signs that use the words or images, constituting what the lawsuit calls “viewpoint discriminatory.”

“By prohibiting firearms dealers from displaying on-site handgun advertisements, Section 26820 violates the right of firearms dealers to disseminate truthful, non-misleading commercial information about a lawful, constitutionally protected product,” the lawsuit alleges.

Plaintiffs in the lawsuit, which was filed in U.S. District Court for the Eastern District of California, are Tracy Rifle and Pistol, owned by Michael Baryla; Ten Percent Firearms, owned by Wesley Morris; Sacramento Black Rifle, Inc., owned by Robert Adams, and PRK Arms, Inc., owned by Jeffrey Mullen. They are represented by attorneys Bradley A. Benbrook and Stephen Duvernay, Benbrook Law Group, PC, and UCLA Law Professor Eugene Volokh.

In addition to Harris, State Department of Justice Bureau of Firearms chief Stephen Lindley, is named as a co-defendant.

SAF founder and Executive Vice President Alan M. Gottlieb said this case “will serve as a reminder that firearms dealers have First Amendment rights as well as Second Amendment rights, even in California. A state cannot legislate political correctness at the expense of a fundamental, constitutionally-delineated civil right,” Gottlieb said. “SAF is delighted to offer its financial support of this case.”

Russians Can Now Carry for Self-Defense

The Russian government is set to ease restrictions on the carrying of licensed firearms for the purpose of self-defense.

RIA Novosti notes that self-defense is added as a justifiable reason to obtain a firearms license, in addition to hunting or target shooting. Licenses are issued through the Interior Ministry and are renewed every five years. Requirements for foreigners buying guns in Russia have been eased.

License holders are allowed to carry shotguns, handguns, Tasers and tear gas guns. Rifles and certain knives still cannot be carried. Carrying guns in schools, night clubs that serve alcohol and at mass public gatherings will remain prohibited.

Comedian Jay Leno Cancels SHOT Show Appearance

Bowing to anti-gun pressure to the effect that he was “helping to legitimize a crass commercialization which values profit over human lives,” comedian Jay Leno has canceled his upcoming engagement at the S.H.O.T. Show.

Leno reportedly called the National Shooting Sports Foundation (NSSF) and told them he wished to cancel. Leno reportedly then contacted Po Murray, executive director of Newtown Action Alliance, to inform her he had cancelled his S.H.O.T. Show appearance. He allegedly said he “was unaware that the NSSF was a pro-gun lobbying group based in Newtown, CT.” And Leno reportedly told the far left Mother Jones magazine in separate remarks, “I understand its Newtown, and of course I get it. It’s just sometimes, mistakes get made.”

This author observes: Perhaps if NSSF were not situated in Newtown, the site of the Adam Lanza massacre, Leno would have appeared? The anti’s seem to make much of the NSSF being situated in Newtown as if Newtown were some sacred “Mecca” of the anti-gun movement. Leno really was not a suitable speaker as it turns out.

A sort of “petition” was post by the Coalition to Stop Gun Violence, with the theme, “Gun violence is not a joke, Mr. Leno. Cancel your appearance at the 2015 SHOT Show.” The drive was backed by the Campaign to Unload, which pushes for divestment from gun companies, and the Newtown Action Alliance, founded by residents of the Connecticut town who support firearms bans. Moms Demand Action for Gun Sense in America, which has pushed corporate restaurants and retailers to take a stand against open-carry activists in their stores, also launched a social media campaign against Leno.

NSSF Statement on Jay Leno Cancellation of SHOT Show Appearance

The National Shooting Sports Foundation issued the following statement on Leno’s cancellation:

“We are clearly disappointed by Jay Leno’s decision not to perform at the 2015 SHOT Show State of the Industry Dinner. He unilaterally cancelled his promised appearance due to pressure from the anti-gun lobby, which included false statements about our industry and its commitment to genuine firearms safety, which we attempted to personally correct with him, but to no avail.

We are not deterred by their publicity seeking nor are we unfamiliar with the bullying political tactics of the gun control groups that seem to have as little respect for the First Amendment as they continually demonstrate with regard to the Second Amendment.

“We are proud of the many programs that we run that meaningfully contribute to public safety including our long standing Project ChildSafe and Don’t Lie for the Other Guy initiatives in addition to our members everyday work in compliance with comprehensive federal and state laws. We will not allow the lawful commerce in firearms nor our industry to be demonized and we will continue to speak out for the Second Amendment rights of the millions of law-abiding citizens who are our customers.

“Despite Mr. Leno’s cancellation, we look forward to having our biggest and best State of the Industry Dinner to date with a performer that respects the contributions of our industry and the customers it supports.”

The author publishes two of the small arms industry’s most widely read trade newsletters. The International Firearms Trade covers the world firearms scene, and The New Firearms Business covers the domestic market. He may be reached at: FirearmsB@aol.com.

By Robert M. Hausman

Synopsis of Annual Imports Conference

The following is a synopsis of the 13th annual Importer Licensee Conference held by the F.A.I.R. Trade Group (an importer’s industry organization) and the National Shooting Sports Foundation in Washington, D.C. in August. This was the 13th year of the conference, which was attended by about 150 persons.

ATF Panel

The opening panel was from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the agency responsible for administering the import provisions of the Federal firearms laws. Alphonso Hughes, Chief of the Firearms and Explosives Services Division, announced a number of staffing changes, including recent hires to assist in processing import applications and National Firearms Act documents. Chief Hughes announced a goal of reducing the current processing time for tax-paid NFA forms (Forms 1 and 4) from 9 months to 6 months.

Desiree Dickinson, Imports Industry Liaison, discussed the mismatch between terms of validity for ATF’s import permit (2 years) and the International Import Certificate (IIC), which is 6 months. Dickinson advised that the Department of Commerce, which has ownership of the IIC, will soon extend the term of validity to 1 year. She suggested that industry members discuss extension of the IIC to 2 years with Commerce.

Dickinson reviewed the changes made to the U.S. Munitions Imports List (USMIL) by an ATF final rule published in March, 2014 (rule can be accessed at www.gpo.gov/fdsys/pkg/FR-2014-03-27/pdf/2014-06778.pdf). The rule removed a number of categories from the USMIL as part of the Administration’s export control reform initiative.

William Majors, Chief of the Imports Branch, emphasized the staffing challenges presented by the increasing volume of import licenses. Majors made it clear ATF will entertain requests to expedite import applications only with documentation the articles sought for importation are required for a law enforcement agency or other government agency.

Lee Alston-Williams, a senior specialist from the Firearms and Explosives Services Division, gave an update on ATF’s e-Forms. Due to problems with the current software, ATF has removed a number of NFA forms from the e-Forms system. Alston-Williams stated the system currently supports the Form 6 import application, Form 6A, Release and Receipt of Imported Firearms, and the ATF Form 1, Application to Make and Register a Firearm. ATF is working with a new e-Forms contractor and hopes to provide the firearms industry with new and improved e-Forms in the future.

The final speaker on the ATF panel was Helen Koppe, Chief of the Firearms Industry Programs Division. This Division is responsible for marking variances for firearms, which are generally processed within 90 days. Koppe announced that the responsibility for responding to marking variance requests will be transferred to the Firearms Technology Branch in the Fall 2014.

During the question and answer session, a question was raised about publication of the final rule relating to the notice of proposed rulemaking on NFA trusts (ATF 41P, published in the Federal Register September 9, 2013, (www.gpo.gov/fdsys/pkg/FR-2013-09-09/pdf/2013-21661.pdf). Andrew Lange, Chief of ATF’s Regulations Division, stated that the large quantity of public comments may delay publication of the final rule until 2015.

Alphonso Hughes answered a question about possible suspension of permits authorizing import of firearms and ammunition from Russia. Chief Hughes announced that all permits would remain valid until the Department of State directs otherwise. He stated that ATF would process all new applications for permits unless the application lists a party blocked by the Office of Foreign Assets Control (i.e., Kalashnikov Concern).

Automated Export System

Joe Cortez of the Census Bureau’s Trade Division gave an update on the Automated Export System (AES). Cortez outlined recent changes made to the Foreign Trade Regulations and the data elements added to the system by those changes.

United Nations Arms Trade Treaty

Bill Kullman, Deputy Chief of ATF’s International Affairs office, and Rick Patterson, Executive Director of the Sporting Arms Ammunition Manufacturers Institute (SAAMI), gave a presentation on the United Nations Arms Trade Treaty.

Kullman emphasized the role of the United States as raising the small arms import and export requirements of the world to the “gold standard” of the United States and to avoid committing the U.S. to additional unnecessary requirements. Patterson stated that the firearms industry should be concerned about the treaty’s lack of definitions for terms including “small arms,” “ammunition,” and “stockpiles.” He said these omissions are deliberate and provide a placeholder for future amendments that could be detrimental to legitimate commerce in firearms. Patterson also mentioned end-use certificates and more burdensome transshipment requirements as potential problem areas in the treaty.

Round-Table Sessions a Big Hit

Sponsors of the conference made a major change in format by devoting most of the afternoon of the first day to round-table discussions. Ten different tables were set up with government experts ready to discuss imports, National Firearms Act transactions, Firearms Industry Programs issues, ATF e-Forms, ATF field compliance inspections, Immigration and Customs Enforcement, firearms and ammunition excise tax (Treasury’s Tax and Trade Bureau), Automated Export System (Census Bureau), State Department Licensing and Policy, and sanctions imposed by Treasury’s Office of Foreign Assets Control. The smaller groups and informal discussions resulted in many lively interchanges between government experts and industry members. Experts and attendees said the format resulted in great communication and should be continued.

ICE Emphasizes Criminal Smuggling Violations

The final session for Day 1 was from David Whalen of Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI). Mr. Whalen’s experience investigating cross-border firearms smuggling was evident as he gave attendees examples of “red flags” that should raise suspicion in international import and export transactions. He assured attendees that HSI is interested in investigating egregious criminal violations, rather than technical regulatory violations.

Add-On Session for Basic Import/Exports Training

Based on feedback from previous conferences, F.A.I.R. and NSSF offered attendees an optional 2-hour basic course on importation and exportation. Approximately 60 attendees signed up for the course, many new to import/export. Teresa Ficaretta, a Federal retiree with 28 years of ATF experience, gave the imports section of the training, which included an overview of the import provisions of the Gun Control Act, the National Firearms Act, and the Arms Export Control Act. Jim Bartlett, Partner and Director of U.S. Operations for Full Circle Compliance, gave the export portion of the training, covering State Department regulations, Commerce Department’s Export Administration Regulations, and sanctions imposed by the Office of Foreign Assets Control. F.A.I.R. and NSSF report positive feedback for this type of basic training and may expand it at future conferences.

Day 2: ITAR Registration, Brokering, Voluntary Disclosures, and Compliance Programs

Day two of the conference was devoted to the controls over exports of defense articles governed by the Department of State, Directorate of Defense Trade Controls (DDTC). Danielle Pressler from DDTC Compliance gave an overview of registration requirements of the International Traffic in Arms Regulations (ITAR), recent amendments to the brokering requirements of ITAR, and the elements of an effective compliance program. She also discussed voluntary disclosures of violations to DDTC and encouraged self-audits to identify such violations. Pressler emphasized the fact that 99% of all voluntary disclosures are closed without further action.

Pressler’s remarks meshed well with a presentation from a panel titled “Designing and Maintaining an Effective Compliance Program.” James Bartlett from the Law Office of James E. Bartlett III, LLP, Johanna Reeves, Managing Partner of Reeves and Dola, and Thomas Trotto, from Immigration and Customs Enforcement HSI, made up the panel. Many of the compliance program elements emphasized by Bartlett and Reeves were similar to those in Pressler’s presentation. Attendees had questions for the panel about potential violations and when they warrant disclosure to State.

The final presentation at the conference was by Julio Santiago, a licensing officer with DDTC licensing. Santiago made remarks on licensing, end-user monitoring, permanent exports, temporary imports, temporary exports, congressional notification, and licensing exemptions.

The above synopsis was prepared by the F.A.I.R. Trade Group.

Additional Points Noted at the Importer’s Conference

ATF announced that three of its publications are undergoing revision in contemplation of the release of updated editions. The National Firearms Act Handbook and the Imports Guidebook are being revised and industry may bring needed revisions to the attention of ATF at the following e-mail addresses: nfahandbook@atf.gov and importsguidebook@atf.gov, respectively. ATF projects that new revisions of these publications will be available in time for the January 2015 SHOT Show.

ATF provided an update on their e-Forms. ATF has not yet even awarded the contract to the firm that will re-design that part of the system. Once a contract is awarded, the contractor’s personnel will need to go through background checks before they can begin work on the project. So, it could be mid-October before the contractor even learns the details of the issues to be addressed. The e-forms revisions are not expected to take place until sometime in 2015.

NFA Branch

William Boyle, III is now the NFA Branch Chief. Kimberly Ramsburg is now NFA Section Chief.

By October 2014, ATF expects to have 24 examiners in the NFA Branch to help clear up the backlog. By December 2014, they hope to have total of 29 examiners.

Alphonso Hughes, Division Chief, Firearms and Explosives Services Division (FESD) said that he is taking aggressive steps and “hopes” to have Form 1 and Form 4 processing time down to 6 months and Form 3 processing time down to 30 days by the end of the year. He recognized that this is optimistic but it is his goal to achieve.

Average monthly NFA Branch revenue is $1.5 million. The highest revenue month was December 2013 with $2.5 million received in revenue (thanks to the ATF-41P issue).

The NFA Branch is receiving on average 8,838 calls per month. In FY 2013, there were 44 Congressional Inquiries.

Presently, it is the first time since 2009 that the NFA Branch is processing more applications per month, than are received. The backlog is approximately 56,000 Forms, which is down from 81,000 in February.

Import Branch

It was announced that under Category 1 of the U.S. Munitions List, scopes no longer require a Form 6 to import.

Category 7 of the U.S. Munitions List has been modified somewhat substantially.

Under Category 14 of the U.S. Munitions List, gas masks no longer require a Form 6 to import.

Shotgun barrels must be brought in on a Form 6, even though they are not on the U.S. Munitions List, because the GCA says they must have a sporting purpose. It is to be treated as an implement of war and the model must be listed on the Form 6. Barrels are NOT being considered a firearm part.

eForms Updates

eForm 1s are back online. eForm 2s should be back online soon, by the end of the year or early next year.

eForm 3 and 4s will be next to go live, on the new site that ATF is developing, which may not be until sometime in 2015.

ATF still cannot update the website to reflect the one additional (not listed) requirement for the eForms password. eForms passwords must have 5 alpha characters.

Marking Variances and Electronic Recordkeeping

There is presently a 90 day turn around on Marking Variance Requests.

ATF says it is updating the Federal Firearms Regulations Reference Guide with new rulings and Q&A. The book hasn’t been updated since 2005.

In response to a question, ATF confirmed that it is a VIOLATION to use cloud storage for electronic A&D Records.

ATF-41P

ATF Counsel Andrew Lang stated that ATF is currently on track to make a decision by January 2015; however, he acknowledged that many of the comments filed by attorneys raised some issues that ATF hadn’t considered.

He stated that the rulemaking may get significantly sidetracked internally, depending on internal responses to their review of the comments and proposals on how to address the concerns.

In response to a question on why ATF didn’t provide the underlying materials used for drafting the proposed rule, Attorney Lang, in addition to saying the petition was posted by the NFATCA at some point in time on its website, said ATF hasn’t had requests for such material in the past (indicating in the words of one attorney present, that ATF may be in violation of the Administrative Procedures Act).

ATF Suspends Imports from 9 Russian Entities

On August 13, 2014, ATF announced immediate action to suspend import permits authorizing the importation of firearms, ammunition, and other defense articles involving Kalashnikov Concern and eight additional defense-related entities.

ATF initiated this action pursuant to guidance from the Department of State under the Arms Export Control Act, 22 U.S.C. 2778 (AECA), which directed ATF to implement the sanctions previously imposed by the Treasury Department’s Office of Foreign Assets Control (OFAC).

Background

On July 16, 2014, the Treasury Department’s Office of Foreign Assets Control (OFAC) designated Kalashnikov Concern as a Specially Designated National (SDN) as part of the Obama Administration’s sanctions on persons and entities in Russia determined to be contributing to the situation in Ukraine. They also identified seven other entities involved in the arms or defense industries in Russia.

It is important to note, however, that ATF’s actions prohibiting imports of defense articles from the targeted entities is under its authority of the AECA and is therefore broader than the OFAC economic sanctions. As mentioned earlier, the State Department has directed ATF to implement the economic sanctions pursuant to its authority under the AECA. The AECA authorizes the President, in supposed furtherance of world peace and the security and foreign policy of the United States, to control the import of defense articles. Consequently, the Administration’s authority under the AECA extends beyond economic sanctions and gives ATF the authority to prohibit the importation of defense articles involving any of the sanctioned entities, regardless of whether the targeted entities retain a financial interest in the defense articles. If the defense articles are manufactured by or otherwise involve one of these entities, they are prohibited from importation into the United States.

Russian Arms Industry Replacing Ukrainian Suppliers

The Russian arms industry has developed a plan to replace its Ukrainian suppliers, lost during the crisis in Ukraine, with companies in Belarus and Kazakhstan, an influential Russian daily reports.

Before the crisis, about 400 Russian defense contractors used materials and components produced in Ukraine, and 70% of all companies supplying the Ukrainian defense industry are located in Russia.

As the new Kiev regime started severing economic contact with Moscow, President Vladimir Putin urged Russian officials to ensure defense orders are fulfilled, and to start replacing Ukrainian suppliers with domestic production or imports.

FDIC Says It Will No Longer Target Firearms Retailers

Gun retailers are no longer on a hit list deemed “high risk” by the Federal Deposit Insurance Corp. after the banking regulator formally withdrew the list it put together that outlined what merchants may be considered risky for banks to do business with as part of the Obama administration’s “Operation Choke Point.”

The agency said its explanatory warning list “led to misunderstandings” about how it’s supervising banks’ ties to third-party payment providers, according to Bloomberg News. The regulator said it never meant to prevent banks from doing financial transactions with the types of businesses on the list.

Those that are operating with the appropriate systems and controls will not be criticized for providing payment-processing services to businesses operating in compliance with applicable law,” the FDIC said in its updated industry guidelines.

Richard Osterman, the agency’s acting general counsel, admitted to the American Banker newspaper that the list had been “misinterpreted” by financial institutions.

Republican lawmakers have criticized the FDIC for unfairly targeting legitimate businesses that operated in its so-called ‘high-risk’ category, including gun retailers and payday lenders. The Washington Times reported in May that many banks were dropping businesses in these high-risk industries as the bankers wanted to avoid higher scrutiny from the federal regulator.

The FDIC has been helping the Department of Justice run “Operation Choke Point,” which is intended to combat online fraud by cutting off fraudsters’ access to payment systems. House Committee on Oversight and Government Reform Chairman Darrell Issa, California Republican, has said the effect of the program has been to squeeze out legitimate businesses.

“If you empower the government to pick winners and losers within lawful enterprises, then there’s no place to stop,” Mr. Issa said in an appearance at the libertarian Cato Institute.

Industry advocates pushing to repeal Operation Choke Point said the FDIC did not go far enough. “Altering a website is window dressing and doesn’t end the unjust practices associated with Operation Choke Point,” said Brian Wise, a senior adviser for the U.S. Consumer Coalition, which is seeking an end to Operation Choke Point.

“While we support the FDIC’s decision to remove the list of ‘high-risk merchants’ from the FDIC website, damage has already been done to countless businesses across the country who have already lost their bank accounts,” he added. “Whether the list is published on the FDIC’s website or not, we expect banks will still be fearful of doing business with these lawful industries.” The author publishes two of the small arms industry’s most widely read trade newsletters. The International Firearms Trade covers the world firearms scene, and The New Firearms Business covers the domestic market. He may be reached at: FirearmsB@aol.com.

The U.S. Supreme Court has ruled that federal law does not allow a person to buy a gun for someone else – even if both are legally eligible to own firearms. The 5-4 ruling on so-called straw purchasing came down in the case of Bruce James Abramski, Jr., who bought a Glock 19 handgun in Collinsville, Va., in 2009 and later transferred it to his uncle in Easton, Pa.

Federal officials brought charges against Abramski because he assured the Virginia dealer he was the actual buyer of the weapon, even though he had already agreed to buy the gun for his uncle.

The high court ruled that the federal background check law does apply to Abramski, rejecting Abramski’s argument that since both he and his uncle were legally allowed to own guns, the law shouldn’t have applied to him.

“We hold that such a misrepresentation is punishable under the statute, whether or not the true buyer could have purchased the gun without the straw,” the court ruled.

Writing for the majority, Justice Elena Kagan said the federal government’s elaborate system of background checks and record-keeping requirements help law enforcement investigate crimes by tracing guns to their buyers. Those provisions would mean little, she said, if a would-be gun buyer could evade them by simply getting another person to buy the gun and fill out the paperwork. Kagan’s opinion was joined by Justice Anthony Kennedy, who is often considered the court’s swing vote, as well as liberal Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor.

In dissent, Justice Antonin Scalia said the language of the law does not support making it a crime for one lawful gun owner to buy a gun for another lawful gun owner. He was joined by the court’s other conservatives – Chief Justice John Roberts and Justices Clarence Thomas and Samuel Alito.

Abramski had been convicted for knowingly making false statements “with respect to any fact material to the lawfulness of the sale” of a gun, 18 U.S.C. §922(a)(6), and for making a false statement “with respect to the information required… to be kept” in the gun dealer’s records, §924(a)(1)(A).

The court reasoned since the dealer could not have lawfully sold the gun had it known that Abramski was not the true buyer, the misstatement (by Abramski) was material to the lawfulness of the sale.

Background

The question to be resolved in this case, was whether, as the ATF declares in Form 4473’s certification, those statutory provisions criminalize a false answer to Question 11. a. – that is, a customer’s statement that he is the “actual transferee/buyer,” purchasing a firearm for himself, when in fact he is a straw purchaser, buying the gun on someone else’s behalf.

The petitioner was Bruce Abramski, a former police officer who offered to buy a Glock 19 handgun for his uncle, Angel Alvarez. (Abramski thought he could get the gun at a discount by showing his old police identification, though the government contends that since he had been fired from his job two years earlier, he was no longer authorized to use that ID.)

Accepting his nephew’s offer, Alvarez sent Abramski a check for $400 with “Glock 19 handgun” written on the memo line. Two days later, Abramski went to a dealer to make the purchase. On the Form 4473 he falsely checked “Yes” in reply to Question 11.a. asserting he was the actual “transferee/buyer” when, according to the form’s clear definition, he was not. He also signed the certification acknowledging his understanding that a false answer to Question 11.a. is a federal crime. After clearing the background check, the dealer sold him the Glock. Abramski then deposited the $400 check in his bank account, transferred the gun to Alvarez, and got back a receipt. Federal agents found that receipt while executing a search warrant at Abramski’s home after he became a suspect in a different crime. A grand jury later indicted Abramski.

Abramski then moved to dismiss the charges by arguing that his misrepresentation on Question 11.a. was not “material to the lawfulness of the sale” under §922(a)(6) because Alvarez was legally eligible to own a gun. And he claimed that the false statement did not violate §924(a)(1)(A) because a buyer’s response to Question 11.a. is not “required …to be kept in the records” of a gun dealer. The District Court denied those motions. Abramski then entered a conditional guilty plea, reserving his right to challenge the rulings. He was sentenced to five years probation.

The Court of Appeals for the Fourth Circuit affirmed the conviction. But it also noted that of the three courts to have addressed the issue, one agreed with Abramski that a misrepresentation on Question 11.a. is immaterial if “the true purchaser (here Alvarez) can lawfully purchase a firearm directly.” The U.S. Supreme Court decided to review the case principally to resolve the Circuit split about §922(a)(6).

The Supreme Court looked at Abramski’s original claim, that a false answer to Question 11.a. is immaterial if the true buyer is legally eligible to purchase a firearm. (The National Rifle Association and a group of 26 states joined Abramski as amici in making this argument).

Additionally, Abramski made a new and more ambitious argument, which he concedes no court has previously accepted – in that, he alleges that a false response to Question 11.a. is never material to a gun sale’s legality, whether or not the actual buyer is eligible to own a gun. (The NRA and the 26 states did not join Abramski on this argument).

On his first point, Abramski argued that the dealer could have sold him the gun even if he had truthfully answered Question 11.a. by disclosing that he was a straw buyer, because all federal firearms law cares about is whether the individual standing at the dealer’s counter meets the requirements to buy a gun. This argument is based on the federal regulation of licensed dealers’ transactions with “persons” or “transferees,” without specifically referencing straw purchasers. Dealers are prohibited, for example, from selling firearms to persons in certain categories, such as felons, the mentally ill, drug addicts, etc. Abramski thus argued that since Congress (when drafting the regulations) did not make mention of “straw purchasers” or “actual buyers,” it “is not illegal to buy a gun for someone else.”

In its opinion the court declared that Abramski’s reading would undermine and virtually repeal the federal gun law’s core provisions. Thus criminals could employ strawmen with impunity. The record-keeping provisions as well would serve little purpose if they did not reveal the real buyers’ of firearms.

The court also found that by concealing that Alvarez was the actual buyer, Abramski prevented the dealer from transacting with Alvarez face-to-face and thwarted application of the federal firearm’s law requirements. Alvarez however underwent a background check with a dealer in his home state.

Abramski noted that until 1995, the ATF took the view that a straw purchaser’s misrepresentation counted as material only if the true buyer could not legally possess a gun. The majority of the court disregarded this point, noting that only the voice of Congress mattered and nothing Congress did has supported Abramski’s view that straw purchasing for a non-prohibited person was legal.

The Dissent

In the dissent, Justice Scalia joined with chief justice Roberts, and justices Thomas and Alito to note that under §922(a)(6), it is a crime to make a “false…statement” to a licensed gun dealer about a “fact material to the lawfulness of” a firearms sale. While Abramski made a false statement when he claimed to be the gun’s “actual transferee/buyer” as Form 4473 defined that term, that false statement was not “material to the lawfulness of the sale” since the truth – that Abramski was buying the gun for his uncle with his uncle’s money – would not have made the sale unlawful.

The dissenters also wrote that no provision of the Gun Control Act prohibits a person who is eligible to possess firearms from buying a gun for another person who is eligible to possess firearms, even at the other’s request and with the other’s money.

The justices found the government’s contention that Abramski’s false statement was material to the lawfulness of the sale depends on a strained interpretation of provisions that mention the “person” to whom a dealer “sells” a gun. The government contended that Abramski’s uncle was the person the dealer sold the gun to and that Abramski prevented the dealer from running the background check on the real buyer, checking his ID, etc., though this was later done.

The dissenters found that the uncle was not the person who bought the gun, but that it was Abramski who fulfilled all federal requirements albeit providing a false answer to question 11.a. They note that a vendor sells an item of merchandise to the person who physically appears in his store, selects the item, pays for it, and takes possession.

The dissenters also rejected the heart of the majority’s argument in its claim that unless Abramski’s uncle is deemed the “person” to whom the gun was “sold,” and that the Gun Control Act’s identification, background-check and recordkeeping requirements would be “rendered meaningless” as an overstatement. They opined that the purpose of crime prevention might be served more effectively if the requirements at issue looked past the “man at the counter” to the person “getting the gun,” to ensure he is eligible to possess firearms.

The dissenting justices also listed scenarios in which the government regards the man at the counter as the “person” to whom the dealer “sells” the gun:

Guns Intended as Gifts. In the government’s view, an individual who buys a gun “with the intent of making a gift of the firearm to another person” is the gun’s “True Purchaser.” (ATF Federal Firearms Regulations Reference Guide 165 (2005). The government’s position makes no exception for situations where the gift is specifically requested by the recipient. So long as no money changes hands, and no agency relationship is formed, between gifter and giftee, the Act is concerned only with the man at the counter.

Guns Intended for Resale. Introducing money into the equation does not automatically change the outcome. The government admits that the man at the counter is the true purchaser even if he immediately sells the gun to someone else. And it appears the government’s position would be the same even if the man at the counter purchased the gun with the intent to sell it to a particular third party, so long as the two did not enter into a common – law agency relationship.

Guns Intended as Raffle Prizes. The government considers the man at the counter the true purchaser even if he is buying the gun “for the purpose of raffling it at an event” in which case he can provide his own information on Form 4473 and “transfer the firearm to the raffle winner without a Form 4473 being completed or a background check being conducted” on the winner. 2005 ATF Guide 195.

The government concession that the statute is operating appropriately in each of those scenarios should cause the majority to reevaluate its assumptions about the type and degree of regulation that the statute regards as ‘meaningful,’ the dissent stated.

What the just-listed scenarios described show is that the statute typically is concerned only with the man at the counter, even where that man is in a practical sense a “conduit” who will promptly transfer the gun to someone else, wrote the dissent.

Noting that compromises had to be made in the Gun Control Act’s provisions to enable it to pass, the dissenters surmised “perhaps those whose votes were needed for passage of the statute wanted a lawful purchaser to be able to use an agent.”

ATF

The dissent next turned its attention to ATF, noting that for decades, “even ATF itself did not read the statute to criminalize conduct like Abramski’s. After Congress passed the Act in 1968, ATF’s initial position was that the Act did not prohibit the sale of a gun to an eligible buyer acting on behalf of a third party (even an ineligible one). (See Hearings Before the Subcommittee To Investigate Juvenile Delinquency of the Senate Committee on the Judiciary, 94th Cong., 1st Sess., pt. 1, 118 (1975).

“A few years later, ATF modified its position and asserted that the Act did not “prohibit a dealer from making a sale to a person who is actually purchasing the firearm for another person” unless the other person was “prohibited from receiving or possessing a firearm,” in which case the dealer could be guilty of “unlawfully aiding the prohibited person’s own violation.” (ATF Industry Circular 79-10 1979, in (Your Guide to) Federal Firearms Regulation 1988-89 (1988) p. 78. The agency appears not to have adopted its current position until the early 1990’s. See U.S. v. Polk, 118 F. 3d 286, 295, n.7 (CA5 1997).“

Thus, the ATF read and interpreted the Gun Control Act in a manner consistent with Abramski’s argument for a period of about 25 years, it was noted. “It is especially contrary to sound practice to give this criminal statute a meaning that the government itself rejected for years,” wrote the dissenters.

On another point, the dissenters note that the list of information required to be kept in a dealer’s records does not include whether the transferee is buying the gun for an eligible third party. The majority argued that since federal regulations requires dealers to retain Form 4473’s, any false answer on that form, even one that is not enumerated in the regulations (such as Question 11.a.) “pertains to information a dealer is statutorily required to maintain.”

Thus in the majority’s view, if the bureaucrats responsible for creating Form 4473 decided to ask the buyer’s favorite color, a false response would be a federal crime!

The statute punishes misstatements “with respect to information required to be kept,” not with respect to “information contained in forms required to be kept.” Because neither the Act nor any regulation requires a dealer to keep a record of whether a customer is purchasing a gun for himself or for an eligible third party, that question had no place on Form 4473-any more than would the question whether the customer was purchasing the gun as a gift for a particular individual and, if so, who that individual was, the dissenters note.

Note on Abramski Case

Though not mentioned in the preceding article, the Abramski case originated when Abramski bought a handgun in Virginia, in 2009 on behalf of his uncle using his uncle’s money and later transferred it to him in Pennsylvania through a firearms retailer after a background check of the uncle. Thus, Abramski did not just “give” the gun to his uncle, but sent it to a dealer in the uncle’s home state where it was transferred by the dealer after a background check.

SHOT Show to be at Sands Through 2020

NSSF and Sands Expo and Convention Center have extended their agreement so that the SHOT Show will be presented at the Sands Expo through 2020.

The author publishes two of the small arms industry’s most widely read trade newsletters. The International Firearms Trade covers the world firearms scene, and The New Firearms Business covers the domestic market. He may be reached at: FirearmsB@aol.com.

ATF Bans 7N6 5.45×39 Ammunition From Importation

On March 5, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) received a request from the U.S. Customs and Border Protection agency (CBP) to conduct a test, examination and classification of Russian-made 7N6 5.45×39 ammunition for purposes of determining whether it is considered “armor piercing ammunition” as defined by the Gun Control Act (GCA), as amended. Since 1986, the GCA has prohibited the importation of armor piercing ammunition unless it is destined for government use or testing. The imported ammunition about which CBP was inquiring was not destined for either excepted purpose.

The Gun Control Act of 1968, as amended, defines the term “armor piercing ammunition” as:

“(i) a projectile or projectile core which may be used in a handgun and which is constructed entirely (excluding the presence of traces of other substances) from one or a combination of tungsten alloys, steel, iron, brass, bronze, beryllium copper, or depleted uranium; or (ii) a full jacketed projectile larger than .22 caliber designed and intended for use in a handgun and whose jacket has a weight of more than 25 percent of the total weight of the projectile.”

When ATF tested the 7N6 samples provided by CBP, they were found to contain a steel core. ATF’s analysis also concluded that the ammunition could be used in a commercially available handgun, the Fabryka Bronie Radom, Model Onyks 89S, 5.45×39 caliber semiautomatic pistol, which was approved for importation into the United States in November 2011.

Accordingly, ATF found the ammunition is “armor piercing” under the section 921(a)(17)(B)(i) and is therefore not importable. ATF’s determination applies only to the Russian-made 7N6 ammunition analyzed, not to all 5.45×39 ammunition. Ammunition of that caliber using projectiles without a steel core would have to be independently examined to determine their importability.

The National Rifle Association advised that notably absent from the ATF-issued advisory is any mention of the “sporting purposes” exemption provided for in the federal armor piercing ammunition law. The law gives the Attorney General discretion to exempt certain projectiles from being considered armor piercing ammunition. This exemption already applies to 5.56×45 M855 and .30-06 M2 AP ammunition.

NRA has repeatedly encouraged ATF to rule that projectiles originally made for rifles and any projectile not designed and intended to penetrate armor when fired from a handgun are exempt from the federal armor piercing ammunition law. Just last year, NRA sent comments to ATF that explained how Congress intended for the armor piercing ammunition law to cover a very limited class of projectiles and provided ATF with guidance on granting “sporting purposes” exemptions to projectiles.

NRA is also working with members of Congress to get more answers from ATF on how the agency determines if a projectile is “armor piercing ammunition.” The efforts include inquiries as to whether ATF considers 7N6 ammunition, which has been widely used as an affordable alternative for target shooting and rifle training, a candidate for a “sporting purposes” exemption.

Reps. Bob Goodlatte (R-Va.), James Sensenbrenner (R-Wis.), and Howard Coble (R-N.C.) have already sent a letter to BATFE Director B. Todd Jones encouraging him to act on other outstanding petitions for “sporting purposes” exemptions.

The congressman’s letter notes that, despite the clear intent of the architects of the law, to ban only bullets capable of penetrating body armor and designed to be fired from a handgun, ammunition clearly designed and intended for use in rifles has been scrutinized as potentially being “armor piercing” under the statute. The letter further notes that manufacturers have been looking at new and innovative materials to replace traditional lead components in markets such as California, where the use of traditional ammunition for hunting has been banned. Some of these alternative materials cause the ammunition to fail the composition test in 18 USC 921(a)(17)(b)(i) and the products are further subjected to a ruling on their intended use by the ATF.

Some manufacturers of ammunition designed for use in rifles have stopped production as a result of guidance from ATF that their products may be considered armor-piercing. The congressmen note that at least 19 companies that produce ammunition for hunting or other shooting sports have submitted petitions to ATF, requesting the agency exempt their products as “primarily intended for a sporting purpose” as required by federal law.

ATF Allegedly Withholding Audio Tapes

The congressmen also wrote about several meetings that were held last year at ATF headquarters to gather input on this issue from manufacturers, groups representing hunters and sportsmen, and groups opposed to alternative ammunition being brought to the market. The audio of all of these meetings was recorded and attendees were told multiple times that the recordings would be made available to them.

When the requests for the tapes were made, the Congressmen write, ATF, however, did not respond. As a result, some organizations filed Freedom of Information Act requests to obtain the recordings, which were also ignored. This lack of transparency is extremely troubling especially considering the fact that attendees were told in no uncertain terms that the meetings were being recorded and the tapes would be provided, the congressmen wrote.

The congressmen close by noting that the unintended consequences of misinterpreting the statute are steep, particularly considering the fortunate lack of instances of officers being shot with rifle-hunting ammunition from handguns. ATF was also encouraged to issue a ruling consistent with congressional intent.

Dems Step Up Effort for Import Semi-Auto Gun Ban

U.S. Sen. Dianne Feinstein (D-Calif.), sponsor of the federal gun ban of 1994-2004, is asking President Barack Obama to direct the BATFE to reinterpret a provision of the Gun Control Act of 1968 to prohibit the importation of various semiautomatic firearms and their parts.

In a letter to Obama, the text of which was included in an article published by the Daily Caller, Feinstein said that, “at a minimum,” ATF should: prohibit importation of all semiautomatic rifles that can accept, or be readily converted to accept, a large capacity ammunition magazine of more than 10 rounds… prohibit semiautomatic rifles with fixed magazines with a capacity of more than 10 rounds, prohibit the importation of the frame or receiver of any prohibited rifle… prohibit the practice of importing assault rifles in parts… prohibit the use of a “thumbhole” stock… and prohibit the importation of assault pistols.

This request is similar to the type of failed legislation Feinstein introduced in Congress last year (which would have imposed the biggest gun ban in American history), only this time she’s trying to achieve some of her ends through soliciting the president’s use of executive authority over firearm imports.

Recently joining Feinstein in the fray were 80-plus U.S. House members who wrote their own semi-auto firearms import ban proposal letter to President Obama. Initiated by Reps. John Conyers (D-Mich.) and Eliot Engel (D-N.Y.), the letter urged Obama to compel the Bureau of Alcohol, Tobacco, Firearms and Explosives to expand its ban on the importation of semiautomatic firearms.

Obama Total Ivory Ban Coming Into Effect

As part of the Obama Administration’s “National Strategy to Combat Wildlife Trafficking,” Secretary of the Interior Sally Jewell announced that the U.S. Fish and Wildlife Service will implement a U.S. ban on commercial trade of elephant ivory.

The ban will impose new restrictions on the import, export, and commercial sale of elephant ivory within the United States, with some limited exceptions. The limited exceptions include a narrow class of antiques that are exempt from regulation under the Endangered Species Act; and items imported for commercial purposes before international commercial trade in these species was prohibited under the Convention on International Trade in Endangered Species of Wild Fauna and Flora. Anyone proposing to sell elephant ivory or rhino horn would be responsible to document that they are exempt, in effect, creating a total ban on the sale of ivory. The ban will:

• Prohibit Commercial Import of African Elephant Ivory
• Prohibit Commercial Export of Elephant Ivory
• Significantly Restrict Domestic Resale of Elephant Ivory – sales across state lines are prohibited, except for bona fide antiques, and will prohibit sales within a state unless the seller can demonstrate an item was lawfully imported prior to 1990 for African elephants and 1975 for Asian elephants, or under an exemption document.
• Clarify the Definition of “Antique.” To qualify as an antique, an item must be more than 100 years old and meet other requirements under the Endangered Species Act. The onus will fall on the seller to demonstrate that an item meets these criteria.

The United States Fish and Wildlife Service plans to have the new regulations in place in June. Those looking to acquire ivory from past legal stockpiles to restore antiques, make pistol grips, or otherwise refurbish items will no longer be able to do so.

An unusual assortment of trade groups opposes the regulations, including the National Association of Music Makers, the Art and Antiques Dealers League of America and the National Rifle Association. The critics say the rules are confusing, unfair and should be rewritten to account for ivory that came into the country long ago. For example, to make an interstate sale an owner would have to prove the ivory entered the country through one of 13 American ports authorized to sanction ivory goods: A near impossible requirement. Some ability to sell ivory within a state will remain. But most owners will now have to document that the item has been in the United States for at least 100 years – again impossible.

The Fish & Wildlife Service has said it intends to end domestic demand instead of helping African countries end elephant poaching.

Excise Tax Liabilities Up 22%

The latest Firearms and Ammunition Excise Tax Collection report released by the Department of the Treasury indicates that firearm and ammunition manufacturers reported tax liabilities of $213.5 million in the 4th calendar quarter of 2013; up 22% over the same time period reported in 2012.

Additionally, the 2013 annual FAET collections (January 1 – December 31) totaled $863,696,528 making it the highest year on record to date, surpassing the previous record 2012 FAET of $643,915,884 by 34.1%.

NICS Checks Second Highest April Figure

The April 2014 NSSF-adjusted National Instant Criminal Background Check System (NICS) figure of 988,726 is the second highest April on record for the system, even with a decrease of 16.6% compared to the April 2013 NSSF-adjusted NICS figure of 1,185,231.

For comparison, the unadjusted April 2014 NICS figure of 1,733,651 reflects a 1.8% increase from the unadjusted NICS figure 1,702,455 in April 2013.

New Form for Requesting Marking Variances

ATF announces the availability of a new form that aids licensed manufacturers and importers who apply for marking variances.

The new ATF Form 3311.4 satisfies the requirements of a marking variance letter application. When properly completed, this form is said to reduce processing time as it specifically requests information required to process a marking variance, thus eliminating delays caused when a request omits needed information.

The form is available on-line at www.atf.gov and is fillable on-line. The ATF Form 3311.4 can be submitted electronically (preferred method), and accepts an electronic signature when available. Otherwise, the form should be printed, signed by both parties, scanned and forwarded to: marking_variances@atf.gov or Faxed to (202) 648-9601. Submissions should be made about 90-days prior to the intended manufacture. The ATF Form 3311.4 is available at: www.atf.gov/content/library/firearms-forms.

Over 30-Round Mags Banned From Export

The National Shooting Sports Foundation reports that the U.S. State Department has made a “policy decision” to limit the export of ammunition magazines of more than 30 rounds capacity solely to government, law enforcement and military end users.

The policy has yet to be posted to the Directorate of Defense Trade Controls (DDTC) website. An update on this policy development will be provided as more information becomes 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. He may be reached at: FirearmsB@aol.com.

ATF Issues Ruling 2013-5 on Electronic Previous Variances Rescinded

The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) recently posted ATF Rul. 2013-5 to its website. The ruling authorizes licensed importers, licensed manufacturers, licensed dealers, and licensed collectors to maintain their acquisition and disposition records electronically, rather than in paper format, provided the requirements of the ruling are met. The ruling supersedes ATF Rul. 2008-2, Records Required for Firearms Licensees. The F.A.I.R. Trade Group notes that the significant requirements of ATF Rul. 2013-5 include the following:

1. The electronic record keeping system must retain any correction of errors as an entirely new entry, without deleting or modifying the original entry. This can be accomplished through a “notes” column to explain corrections.

2. The system must allow queries by serial number, acquisition date, name of the manufacturer or importer, name of purchaser, and address of purchaser or other transferee.

3. The licensee must print or download all records from the system at least semiannually, upon request of an ATF officer, prior to discontinuance of the database, and prior to discontinuance of the licensees’ business. Note that ATF Rul. 2008-2 required periodic printing of all records and did not authorize periodic downloading of records. This is a significant change in policy, as licensees may now download records to external media that require far less storage space than printouts.

4. The printouts/downloads outlined in 3. above must include all firearms in inventory and all firearms transferred during the period covered. ATF Rul. 2008-2 required that the printouts/downloads be limited to information required by the regulations, while ATF Rul. 2013-5 allows inclusion of other information in separate columns, as long as the required information is “readily apparent.”

5. As with ATF Rul. 2008-2, ATF Rul. 2013-5 allows storage of required records on portable storage devices, including CDs, DVDs, and flash drives. Information must be retained on the portable storage device until the next download is prepared and licensees must present the device in printed format at ATF’s request.

6. ATF Rul. 2013-5 requires that electronic records be stored on a computer server owned and operated solely by the licensee and that the records be readily accessible through a computer located at the licensed premises during regular business hours. This requirement, new since issuance of the 2008 ruling, gives licensees more flexibility in determining the location for their servers. For licensees with multiple locations, records may be stored at one location as long as all other locations have a computer with the ability to access the server storing the records. Significantly, the ruling holds that the server storing the records must be located within the United States.

7. The electronic record keeping system must back up the firearms acquisition and disposition records on a daily basis. This requirement has not changed since issuance of the 2008 ruling.

8. ATF Rul. 2013-5 specifically replaces and rescinds all previously approved variances covering electronically maintained firearms acquisition and dispositions records. Licensees holding such variances may not, consistent with the law and regulations, create and maintain their records in reliance on such variances. Licensees must either comply with the requirements of ATF Rul. 2013-5 or submit a new variance request to the Firearms Industry Programs Branch of ATF.

9. ATF Rul. 2008-2 has been superseded, which means it is still in effect but has been modified by ATF Rul. 2013-5. Clients should rely solely on ATF Rul. 2013-5, as its provisions are more specific and stringent than those outlined in the 2008 ruling.

Abramski vs. U.S. Arguments Made

The U.S. Supreme Court has heard arguments in Abramski v. U.S. At the heart of the issue is whether Congress intended to have the Gun Control Act of 1968 allow law-abiding individuals to purchase guns for someone else. The “straw man” doctrine was codified into law in 1995, when the ATF modified Form 4473 to say such purchases were illegal on their face and wouldn’t be permitted.

Notes on Broker Reports

A couple of quick notes on broker reports, which historically have been due by the end of January following the year of reported activity.

Broker reports are due with broker renewal submissions (i.e., for persons already registered as brokers). The report must cover all brokering activity not the subject of a prior broker report.

Broker reports must cover all brokering activity up to three months prior to the expiration of the broker registration. For example, if the registration expires at the end of November 30, 2013, then the broker report would cover the period from January 1st – August 31st. For subsequent years, the broker report would include a trailing 12 month period, e.g., September 1, 2013 – August 31, 2014.

ATF Faces Problems with E-forms

ATF has sent out a notice to users of its eForms system cautioning that the system is facing significant performance issues, beyond the known problems. Without the budget to address these issues and improve the system, ATF is continuing its efforts to keep the system operational.

Obama Planning New Regs on Lost & Missing Firearms

The Obama administration is working on new gun control regulations that would target stolen and missing weapons according to The Hill. Police have a hard time tracking firearms that disappear from gun shops, which “just feeds the sort of already large and existing secondary market on guns,” said Sam Hoover, a staff attorney with the Law Center to Prevent Gun Violence.

It is unclear precisely what the draft regulations, drawn up by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and under review at the White House’s regulations office, would do. ATF would not comment on the draft rule, since it has not yet been released to the public, but a description provided by the White House asserts that it would target cases where guns go missing “in transit.”

Currently, gun dealers are required to tell ATF after they discover a firearm has gone missing, but they aren’t required to do routine checks. “They can discover a gun missing today and have no idea when it went missing, which really makes that information useless to law enforcement,” said Chelsea Parsons, associate director of crime and firearms policy at the Center for American Progress.

The draft rule was sent to the White House five months after ATF completed a report that found that more than 190,000 firearms were estimated to have been lost or stolen last year. The report was one of 23 executive actions President Obama announced in January to reduce gun violence in the wake of 2012’s shooting in Newtown, Conn. That report helped shine light on an unseen corner of the gun market, supporters of stricter gun laws say. The report was entitled, 2012 Summary: Firearms Reported Lost and Stolen.

“I think that in the area of guns and gun violence and gun commerce, we have had a complete lack of data and a lack of information,” said Parsons. She wants the ATF to be able to take stronger action to monitor and track guns that go missing.

Since 2004, an appropriations rider has prevented the ATF from requiring gun dealers to do periodic checks. Gun rights advocates say that the measure protects innocent victims of crimes from punishment by the government.

After this story was posted, ATF contacted The Hill to clarify that the pending proposal would not affect the longstanding law preventing the agency from requiring gun dealers to check their inventories.

S&W, Ruger to Stop Some CA Sales

Smith and Wesson and Sturm, Ruger have confirmed that both companies are being forced to stop selling new or improved semiautomatic handguns in California due to that state’s implementation of its microstamping law.

On January 9, NSSF and the Sporting Arms and Ammunition Manufacturers’ Institute (SAAMI) filed suit seeking to invalidate and enjoin enforcement of the unconstitutional and unworkable law, which was signed into law in 2007, but not implemented until last year.

Beretta Building Plant in Tennessee

Italian gun-maker Beretta USA plans to make Gallatin, Tenn. its manufacturing base in the United States, announcing plans to invest $45 million in a firearms plant that will initially employ 300 workers. Tennessee’s reputation as a gun-friendly state was key to the decision.

Gallatin Mayor Jo Ann Graves said “…we’re very excited that they’ve chosen (us) over eight other states.” As a result of choosing Gallatin, Beretta will be eligible for tax credits, infrastructure and job training grants from the state. Details also are being finalized for a payment-in-lieu-of-taxes grant from Gallatin.

Beretta, meanwhile, is negotiating with Gallatin officials to buy 100 acres at the Gallatin Industrial Center, where the manufacturing and research and development facility will be built. Construction should start by May, with production expected to start during the first quarter of 2015.

Beretta USA’s choice of Gallatin came after nearly a year-long search for a location to expand U.S. manufacturing outside of Maryland, where the world’s oldest manufacturing dynasty, operating since 1526 in Italy, employs about 350 at a factory in Accokeek. After Maryland passed stricter gun legislation in the aftermath of the December 2012 shootings at Sandy Hook Elementary School in Newtown, Conn., Beretta expressed frustration about the new laws. Initially, Beretta focused on states that expressed strong support for Second Amendment rights, said Jeff Reh, a board member of Beretta USA. It narrowed down that list by looking at factors for investment, including tax rates, cost of living, quality of local educational institutions, availability of workers and job recruitment support from the state, including training programs. Beretta then visited 80 locations over five months before narrowing the number of sites to six. After more visits, three sites remained in the running and Gallatin was chosen as the best location for the expansion. “We’re convinced we could find no better place than Tennessee to establish our new manufacturing enterprise,” said Franco Gussalli Beretta, executive vice president and a director of Beretta USA. “We look forward to building operations here and being part of the community for many years to come.” The company will keep the manufacturing plant in Maryland open. “It’s a spectacular opportunity for Gallatin, and it allows for the visibility that Gallatin deserves,” James Fenton, executive director of the Gallatin Economic Development Agency, said about the Beretta expansion.

ATF Releases Inspection Report of FFLs

ATF has released a new report demonstrating the success of federal firearms licensees in complying with federal laws and regulations. ATF reported that during Fiscal Year 2013, the agency conducted compliance inspections of 10,002 licensees, and the results show that the licensees are overwhelmingly complying with myriad laws and regulations.

Less than one percent, 0.69 percent, of the inspections resulted in a license revocation or a denied renewal. Roughly half of those inspected, 48.73 percent, were found to have no violations, slightly higher than FY 2012 and generally consistent with historical patterns showing a culture of compliance.

The author publishes two of the small arms industry’s most widely read trade newsletters. The International Firearms Trade covers the world firearms scene, and The New Firearms Business covers the domestic market. He may be reached at: FirearmsB@aol.com.

Kerry Signs U.N. Arms Trade Treaty

The United States Secretary of State, John Kerry, has signed the U.N. Arms Trade Treaty (ATT) regulating the $70 billion global trade in conventional arms, which will attempt to violate the Constitutional rights of Americans.

“The Obama administration is once again demonstrating its contempt for our fundamental, individual Right to Keep and Bear Arms,” said Chris W. Cox, executive director of the NRA’s Institute for Legislative Action. “This treaty threatens individual firearm ownership with an invasive registration scheme. The NRA will continue working with the United States Senate to oppose ratification of the ATT.”

Among the NRA arguments against the treaty are that it undermines American sovereignty and that it disregards the Second Amendment. A bipartisan majority of the U.S. Senate is already on record in opposition to ratification of the ATT.

Notably, the ATT includes “small arms and light weapons” within its scope, which covers firearms owned by law-abiding citizens. Further, the treaty urges recordkeeping of end users, directing importing countries to provide information to an exporting country regarding arms transfers, including “end use or end user documentation” for a “minimum of ten years.” Each country is to “take measures, pursuant to its national laws, to regulate brokering taking place under its jurisdiction for conventional arms.” Data kept on the end users of imported firearms is a de-facto registry of law-abiding firearms owners, which is a violation of federal law. Even worse, the ATT could be construed to require such a registry to be made available to foreign governments. Fortunately, it has no force of law unless the Senate ratifies it.

NFATCA Statement on ATF Notice of Proposed Rulemaking

The National Firearms Act Trade & Collectors Association, has issued the following (excerpted by the author) statement on ATF’s proposed rulemaking regarding acquisition of NFA firearms by entities.

“Many are livid over the fact that it appears as though NFATCA caused or asked for the changes discussed in the Executive Action presented by Vice President Joe Biden in a draft Notice of Proposed Rule Making (NPRM). The NFATCA shares the anger and venom of the firearms community in response to these proposed actions and rule-making efforts. Be clear: We did not ask for what the White House is trying to deliver. Let’s take a look at how we got to this point.

“The NFATCA began in the Bush administration and enjoyed the benefit of working with an ATF that was willing to engage in constructive dialogue. That cooperative environment actually worked for many years, until our current President was elected and subsequently re-elected. Our cooperative resources within ATF still existed, but they became increasingly reluctant to engage in productive activity with us.

“The NFATCA began its efforts to eliminate the Chief Law Enforcement Officer (CLEO) signature requirement on several NFA forms over nine years ago. In 2009, ATF was reluctant to engage in a dialogue to address this issue and others that were considered to be important to the NFA and firearms communities. Although we had previously engaged in a productive and collaborative work environment, ATF’s hesitance forced us to retain counsel to file a formal petition to attempt to achieve meaningful discourse.

“Once the petition was formally delivered, ATF began working with us on advancing the CLEO signature removal issue. We went through several rounds of clarification and patiently observed the effort moving back and forth between ATF and DOJ over a period of years.

“In early 2011, and again in 2012, ATF clearly demonstrated their intention to remove the CLEO signature requirement in RIN 1140-AA43, though they still had not consulted with us regarding the trust/corporate items. We awaited the formal rule-making process to begin. On August 28, 2013, the RIN was changed without notice. In addition, a lengthy draft of a proposed NPRM was released.

“Our petition acknowledged the understanding that ATF was concerned about prohibited persons skirting background checks by utilizing trusts and corporate entities to purchase firearms. We had been warning people for years that ATF was going to shut down the “trust loophole” regarding unqualified people obtaining weapons, and that NFATCA was trying to mitigate the damage and get rid of the antiquated CLEO signature requirement as part of this negotiation.

“We sounded this clarion because ATF had clearly indicated that they wanted to discontinue it. NFATCA didn’t make this a problem or bring it to ATF’s attention; the people abusing the system did. ATF was already aware of it because they had such a massive increase in trust transfers, and they read the Internet boards, following the way people bragged about getting NFA weapons anonymously and advising each other how to do so. ATF is engaged with cases of prohibited persons who have acquired weapons through trusts and corporations without background checks. Some may point to the fact there have not been any violent crimes as a result of the loophole, but prohibited persons in possession of firearms is a crime in itself. ATF was in the untenable position of approving those transfers to prohibited persons. Something was absolutely going to change.

“Class 3 dealers formed the method of using trusts back in 1993-1994, after consulting with lawyers and ATF counsel to circumvent local law enforcement who refused to sign off on purchases, in order to help the collectors in Dade County and Houston in particular.

“The dealers who engaged in discussions with ATF at the time made all of this possible, and for fifteen years this method worked very well. It was the Internet braggarts who created a problem for the general public, and now they’ve burned the bridge. Dealers’ sales are going to hurt due to the actions of a few individuals who have unlawfully cheated the system. The abusers of the trust situation set off ATF’s radar. If there is anger that should be displayed, it should be towards the people who abused the system and brought all of this to the attention of ATF and the Executive Branch.

“While the NFATCA has acknowledged in our petition that there is concern regarding prohibited persons receiving firearms without background checks via trusts and corporations, the draft NPRM does not reflect any discussions or negotiations we had with the Federal Government. We did not support nor advocate for the efforts of the Executive Branch that were recently published as the proposed NPRM. The proposed NPRM is being used as a political expedient to address areas of negligible concern. The Executive Branch proposals unduly burden the law-abiding public, will restrain lawful commerce and bury an already overwhelmed agency with an administrative infrastructure that will not serve the public’s safety.

“The NFATCA supports the elimination of the CLEO signature requirement. The NFATCA is willing to engage with DOJ/ATF and the Executive Branch to investigate reasonable, effective and manageable approaches to preventing prohibited persons from acquiring firearms. We cannot and will not support the NPRM in its current form. Unfortunately, it does not appear as though ATF, the DOJ or this administration wishes to enter into a constructive dialogue. As a result, the NFATCA will adopt a much more aggressive stance.

“We are currently soliciting resources to mount an offensive on multiple fronts:

• A legal review and dissection of the draft NPRM,
• Soliciting information regarding the costs of such an effort that would prohibit that level of spending,
• A legal counter-offensive to the draft NPRM via petition or other suitable means,
• Solicitation of Congressional inquiry,
• Creation of a massive grassroots effort to combat the NPRM, should it actually be published in the Federal Register.”

NRA Joins ACLU in Opposing NSA Records Collection

The National Rifle Association plan to press members of Congress in the coming weeks to block the National Security Agency’s controversial program collecting records of Americans’ phone calls, arguing that the surveillance efforts can be used as a “backdoor” to construct a national gun registry.

“We will be up there and we will be making our feelings known,” David Keene, a member of the NRA’s executive board who served until this spring as the group’s president, told NBC News. “Our members are concerned about this. This metadata can be used to construct a list” of every gun owner.

Keene’s comments signaled a new determination by the gun lobby to take up opposition to the NSA surveillance efforts as a political cause, joining with civil liberties groups and others on the left who have been lobbying against the program for months, and potentially complicating the Obama administration’s efforts to preserve the phone surveillance program.

The comments came as NRA board members gathered in Arlington, Va., for a quarterly meeting and to celebrate the latest political coup: Defeat of two state senators in Colorado — including the state Senate president — in a special recall election as payback for the lawmakers’ support of gun control measures.

Board members also will hear a report on the NRA’s surprise decision to file a friend-of-the- court brief on behalf of an ACLU lawsuit to halt the NSA collection program as an unconstitutional violation of American privacy rights.

Laura Murphy, legislative director for the ACLU in Washington, claims credit for recruiting the NRA to join efforts to stop the program and said its participation will have a big impact. “We’ve got momentum going,” she said. “They (the NRA) have got access to all the Republicans.”

Murphy said a recently declassified FBI training manual on how agents can use their authorities under the Foreign Intelligence Surveillance Act in the course of terrorism and espionage cases helped sway the NRA leadership.

The manual instructs agents how they can use the Patriot Act to collect a wide range of “sensitive records” – including “firearms sales.”

Although there was nothing especially secret about using the Patriot Act to obtain such records — all business records, including firearms sales, are routinely subpoenaed during federal law enforcement investigations — the fact that they were specifically highlighted in the manual made a big impact with the NRA, Murphy said. “They were surprised,” she said.

Keene, the NRA leader, said the FBI training manual was especially disturbing because other federal laws require the destruction of records of gun purchases after they are used for a federally-mandated background check. And it showed how federal agents can stretch their legal authorities to collect data on gun owners.

Under the so-called NSA “metadata” program, first disclosed last June by ex-contractor Edward Snowden, the agency has collected tens of millions of records on the time, duration and destination of every phone call in the country as part of a wide-ranging and highly-classified surveillance effort aimed at supposedly identifying potential terrorist threats. The agency has received the records from phone companies under secret orders by the Foreign Intelligence Surveillance Court (FISC) based on a provision of the U.S. Patriot Act that allows the FBI to collect “business records” deemed relevant to “terrorist” investigations.

In its friend of the court brief filed September 4, the NRA argued that the NSA collection of all phone records, as well as other agency collection efforts revealed by Snowden, threatens NRA members’ First Amendment rights.

“Under the programs revealed so far, the government may already possess information about everyone who has called the NRA by phone, emailed the NRA or visited the NRA’s website,” it wrote in the brief. In addition, the brief states, the mass phone collection would make it easier for the government to create a nationwide “registry” of all gun owners. “For example, a person whose phone records show a pattern of repeated calls to gun stores, shooting ranges, and the NRA, is considerably more likely to be a gun owner than a person who makes no such calls. If phone records are combined with other information, far more detailed profiles could be assembled,” it said.

Ruger Finalizes Purchase Of N.C. Facility

Sturm, Ruger & Co. has announced that it has finalized the purchase of a 220,000-square-foot-facility in Mayodan, N.C. This will represent the company’s first major expansion in more than 25 years. Production at the new facility is expected to begin during the first quarter of 2014.

ATF’s Proposed New NFA Rule

ATF states that since existing regulations do not require the identification of responsible persons of a legal entity, the proposed rule, if finalized, would provide public safety benefits by enabling ATF to identify and perform background checks on such persons.

Currently, if the seller of an NFA firearm is a licensee, the officer or trustee must complete Form 4473. If it turns out that one of the officers or trustees is prohibited, then one of the other officers or trustees may pick up the firearm and complete the Form 4473. If the seller is not a licensee, then no form is completed. Once the firearm is picked up by the officer or trustee, then it becomes corporate or trust property and can be possessed by any of the officers or trustees.

In Texas, ATF became aware of a situation in which the member of an LLC was an illegal alien, living in the U.S. under an assumed name, and had a felony warrant outstanding. At that time, the LLC had 19 firearms registered to it and ATF lacked the necessary information to conduct any background checks to determine whether the member was a prohibited person.

In Tennessee, as a result of information provided by a FFL, ATF became aware of applications submitted to transfer two NFA firearms to a trust in which one of the trustees was a convicted felon. If there had been no referral, ATF would not have known of the need to conduct any background checks for the trust members to determine if any were prohibited persons. The proposed rule will make the requirements for background checks the same for certain legal entities as they are now for individuals. ATF estimates the cost increase per entity of complying with the proposed rule to be $293.93.

ATF Costs Related to New NFA Proposed Rule

Buried within the ATF proposal to require background checks and chief law enforcement officer (CLEO) letters for entities applying to make or receive an NFA firearm are some interesting estimates of costs to applicants and to ATF itself.

To submit information for each of an entity’s responsible persons to ATF in order for ATF to ensure such persons are not prohibited from possessing NFA firearms, ATF estimates a total cost of $14.9 million annually.

This figure would cover the costs of (1) legal entities to gather, procure, and submit such information to ATF; (2) for ATF to process the information and conduct a background check on responsible persons; and (3) local and state agencies possibly to review the information, and conduct their own background checks.

In calendar year 2012, ATF received 84,435 applications that were either ATF Forms 1, 4, or 5. Of these, 40,700 applications were for unlicensed legal entities (e.g. corporations, companies and trusts) to make or receive an NFA firearm; 29,448 were for individuals to make or receive an NFA firearm; and 14,287 were for government agencies or qualified FFLs to make or receive an NFA firearm.

Cost of Completion of Responsible Person Form

Under the proposed rule detailed in FB’s last issue, a legal entity would be required to complete the following steps in addition to completing the applicable Form 1, 4, or 5 before it is permitted to make or receive an NFA firearm:

(1) Complete and submit proposed Form 5320.23 for each responsible person; (2) Submit fingerprints, photographs, and CLEO certificate for each responsible person; and (3) Submit a copy of the documentation that establishes the legal existence of the legal entity.

ATF estimates the time for each responsible person to complete Form 5320.23 to be 10 minutes. Based on an estimate of 2 responsible persons per legal entity and 40,700 entities, the estimated annual cost of proposed Form 5320.23 is $417,854.

Cost of Photographs

ATF estimates the cost of the photographs is $8.00 (cost based on the average of the costs determined for seven large retailers); and the time needed to procure photographs is 50 minutes. (ATF personnel apparently went out and canvassed retailers to determine this figure).

Under the proposed rule, legal entities would incur costs for obtaining and submitting photographs. Based on an estimate of two responsible persons per entity and 40,700 entities, the estimated total cost for legal entities to obtain and submit photographs is $2,740,467.

Cost of Fingerprints

ATF has reviewed various fingerprinting services. Presently, ATF is only able to accept fingerprints on hard-copy fingerprint cards. Thus, the cost estimate is based on submission of two fingerprint cards for each responsible person. The estimated cost of the fingerprints is $24 (based on the average of the costs determined for seven fingerprint services); and the estimated time needed to procure the fingerprints is 60 minutes.

Each responsible person of a legal entity would be required to obtain and submit fingerprints to ATF. Based on an estimate of two responsible persons per entity and 40,700 entities, the estimated cost for legal entities to obtain and submit fingerprints is $4,460,720.

Estimated Cost for CLEO Certification

ATF estimates that the time needed for a responsible person to procure the CLEO certificate is 100 minutes (70 minutes travel time and 30 minutes review time with the CLEO). Based on an estimate of 2 responsible persons per legal entity and 40,700 entities, the estimated cost for legal entities to obtain CLEO certification is $4,178,533.

Cost to Establish Existence of Legal Entity

A legal entity applying to make or receive an NFA firearm would provide ATF with documentation evidencing its existence and validity under the proposed rule. Currently, legal entities are not required to do so.

ATF estimates this documentary evidence will require the submission of 15-pages of photo-copied material without notarization. The cost of the copied documentation is $1.50, based on 10-cents per page cost while the time needed is 5 minutes. Assuming 40,700 entities would provide ATF this documentation each year, the estimated annual cost to submit the documentation is $165,513.

Legal Entity Responsible Person ID Info Costs

The total estimated new cost of the proposals for legal entities to provide to ATF identification information for each of its responsible persons is $11,963,087 annually.

To restate, the cost estimates of the time for an entity to comply with the proposed rule’s requirements are: Completion of Form 5320.23, procure photographs, procure fingerprints, obtain CLEO certificate, and copy attachments: $9,297,237.

Additionally, the estimated entity’s costs for paying for the photographs, fingerprints and providing documentation of a legal entity is an additional $2,665,850. The grand total comes to $11,963,087.

Costs to ATF of the New Proposed Rule

ATF, of course, currently incurs costs to process forms, fingerprint cards, photographs, and to conduct and review background checks. Currently, ATF incurs these costs for the 29,448 applications for individuals to make or receive NFA firearms. Under the proposed rule, ATF estimates:

• ATF’s cost for the FBI to process a set of fingerprints is $14.50.
• The cost for an examiner at ATF’s NFA Branch to conduct and review the results of a background check is $7.70 (15-minutes at $30.80 per hour): and
• The cost to print the new 5320.23 forms is one cent per form.

Thus, based on an estimate of two responsible persons per legal entity and 40,700 entities, the estimated cost for ATF to process forms, fingerprint cards, photographs, and to conduct and review background checks for applications for legal entities to make or receive NFA firearms is $1,807,894 annually.

Cost to State & Local Agencies

The cost of a responsible person to obtain a CLEO certificate may increase costs to state and local agencies as they review the information provided, conduct their own background checks and determine whether to complete the certificate.

Based on an estimate of two responsible persons per entity and 40,700 entities, ATF estimates the cost to state and local agencies at $1,253,560.

The author publishes two of the small arms industry’s most widely read trade newsletters. The International Firearms Trade covers the world firearms scene, and The New Firearms Business covers the domestic market. He may be reached at: FirearmsB@aol.com.

Reed Exhibitions Out as SHOT Show Manager

The National Shooting Sports Foundation (NSSF), the largest trade association for the firearms industry, has announced that it has reached an agreement with Reed Exhibitions to terminate the agreement the parties had for the management of the SHOT Show. Accordingly, effective immediately, Reed Exhibitions will no longer be manager and producer of the SHOT Show.

Reed Exhibitions provided service to NSSF and the customers of the SHOT Show for more than three decades, however, the company’s decision to restrict the sale of certain types of firearms (particularly AR-15 derivatives) this year at the large Pennsylvania consumer hunting and fishing show – an event unrelated to NSSF and the SHOT Show – was in conflict with NSSF’s mission to serve the shooting sports industry. This Reed decision resulted in many industry firms cancelling their participation at the Pennsylvania expo and ultimately caused the event to be cancelled. As a result, both organizations (NSSF & Reed) decided it was in the best interest of the SHOT Show to end their relationship.

Some SHOT Show exhibitors were considering their non-participation at the 2014 SHOT Show if Reed continued on as its manager.

Reed’s decision to ban AR-15 type rifles from the Pennsylvania show was made during the time when the firearms industry was under severe stress and in danger of faltering from the attacks by members of Congress, led by Obama/Biden, who were predicting that an anti-gun “tidal wave” would sweep the firearms industry away.

The SHOT Show – the Shooting, Hunting and Outdoor Trade Show – is owned and sponsored by NSSF. It is the largest and most comprehensive trade show for all professionals involved with the shooting sports, hunting and law enforcement industries. The 2014 SHOT Show will be held Jan. 14-17 at the Sands Expo and Convention Center in Las Vegas.

New SHOT Show Management Company Chosen by NSSF

After what has been described as an extensive national search involving the trade show industry’s top management companies, the National Shooting Sports Foundation (NSSF) has selected ConvExx as its new SHOT Show management partner.

ConvExx replaces longtime NSSF partner Reed Exhibitions, which became uncomfortable with managing the SHOT Show due to its extensive displays of “black rifles.”

Based in Las Vegas, ConvExx is privately held and has produced more than 200 shows and events, working with more than a million exhibitors and attendees.

ConvExx produces the annual Specialty Equipment Market Association (SEMA) Show, which at nearly 1 million net-square-feet and 135,000-attendees is ranked as the fourth largest trade show in America by Trade Show Executive magazine (SHOT Show is ranked 16th).

“We’re excited to have ConvExx on board as our new management partner,” said Chris Dolnack, NSSF senior vice president and chief marketing officer. “ConvExx offers a unique combination of extensive large-show and Las Vegas experience, which will serve our exhibitors and attendees well.”

“We’re thrilled to be selected to help NSSF manage the SHOT Show,” said ConvExx Chairman Chuck Schwartz. “The SHOT Show is one of the premier trade show events, and we are proud to be associated with NSSF and the shooting sports industry.”

Sturm, Ruger to Open Third Factory

Sturm, Ruger & Co. has announced that it plans to open its third manufacturing plant, a 220,000-square-foot facility in Mayodan, North Carolina.

This will be the company’s first major expansion in over 25-years. It is expected to be finalized in late-summer. The company currently employs over 2,000 people in its two plants in Newport, New Hampshire and Prescott, Arizona.

NSSF Files Suit Against Connecticut’s New Gun Law

The National Shooting Sports Foundation (NSSF), the trade association for the firearms and ammunition industry, has filed suit in federal court for the District of Connecticut alleging that Governor Dannel Malloy and the leadership of the Connecticut General Assembly misused the so-called “emergency certification” exception to circumvent the safeguards of the normal legislative process and in violation of Connecticut statutory law in order to pass Senate Bill 1160, a package of strict gun control regulations.

The suit further alleges that enactment of the new law violates fundamental due process rights guaranteed by both the Connecticut and United States Constitutions. NSSF is asking the court to declare the law invalid and issue an injunction prohibiting its enforcement. “A 139-page bill was assembled behind closed doors, bypassing both the public hearing and committee processes, and quickly sent to floor votes on the same day in both the House and Senate where legislators did not have adequate time to even read the bill.

“The governor then signed the package into law the next day. All of this is in violation of guarantees citizens are supposed to have under Connecticut State Statutes and protections in our State and U.S. Constitutions for which our forefathers fought,” said Lawrence G. Keane, senior vice president and general counsel, NSSF.

“Our suit focuses on this abuse of process that has resulted in enacted law that does nothing to improve public safety, while resulting in adverse effects on law-abiding citizens, manufacturers, retailers and sportsmen’s organizations,” said Keane.

Non-Licensed Exports to Canada Limit Now $500

The State Department Directorate of Defense Trade Controls (DDTC) has revised sections 123.16 and 123.17 of the International Traffic in Arms Regulations (ITAR) to increase the dollar limit of exports of certain firearms, and firearm parts, components, accessories and attachments to Canada without a license from $100 to $500 (wholesale). This has been a F.A.I.R. Trade Group effort that has been an undertaking of several years.

These amendments implement the Consolidated and Further Continuing Appropriations Act, which restricts DDTC from requiring an export license:

(1) for certain firearms and firearm components for end-use by the Canadian Government when the total transaction value does not exceed $500 wholesale; and (2) for certain firearms components for end-use in Canada when the total transaction value does not exceed $500 wholesale.

FAIR has been advocating this issue on behalf of industry for quite some time. They thought they had attained victory back in 2005 when the House of Representatives and the Senate passed the appropriations legislation, but it had to continue to work with DDTC to ensure they implemented the legislation.

Following are excerpted portions from the Federal Register Notice. Please review this revision carefully, as the firearms and parts and components that qualify for the license exemption depend on the final end-user. In addition, there are several conditions that must be satisfied to use the license exemption failure to meet these requirements could subject the exporter to fines, penalties, or other enforcement action.

It is important to note that the license exemption dollar limit for all countries other than Canada remains at $100.

DEPARTMENT OF STATE 22 CFR Part 123 RIN 1400¨CAD07 [Public Notice 8371]
International Traffic in Arms Regulations: Canadian Firearms Components Exemption

AGENCY: Department of State.
ACTION: Final rule.
SUMMARY: The Department of State is amending the International Traffic in Arms Regulations to implement a statutory provision regarding the exemption from licensing for export to Canada of firearms components not exceeding $500 in value.

DATES: This rule is effective July 8, 2013.

FOR FURTHER INFORMATION CONTACT: Ms. Sarah J. Heidema, Acting Director, Office of Defense Trade Controls Policy, Department of State, telephone (202) 663-2792, email DDTCResponseTeam@state.gov ATTN: Part 123, Canadian Firearms Components Exemption.

SUPPLEMENTARY INFORMATION: The Department of State is amending the International Traffic in Arms Regulations (ITAR) to implement section 520 of the Consolidated and Further Continuing Appropriations Act 2012 (Pub. L. 112¨C55), which applies to fiscal year 2012 appropriations, as carried forward for fiscal year 2013 by the Full Year Continuing Appropriations Act 2013 (Pub. L. 113-6). The Department has the authority to regulate the export control program pursuant to the Arms Export Control Act, 22 U.S.C. 2778. Pursuant to section 520, the Department cannot require a license for the export of certain firearms and firearms components for end-use by the Canadian government with a total transaction value not exceeding $500 wholesale, and cannot require a license for the export of certain firearms components for end-use in Canada with a total transaction value not exceeding $500 wholesale. ITAR 123.17 is revised accordingly. In addition, ITAR 123.16(b)(6) is amended to remove the words “for personal use,” as the firearms exemption at ITAR 123.17 includes use of the exemption for an end-use other than personal use. This rule implements a statutory mandate, and concerns a foreign affairs function of the United States. Therefore, the Department is publishing this as a final rule, and is not soliciting comments.

Text of New Rule on Exempt Canadian Exports

3. Section 123.17 is amended by revising paragraph (a) to read as follows:
123.17 Exports of firearms, ammunition, and personal protective gear.

(a) Port Directors of U.S. Customs and Border Protection shall permit the export without a license of:

•(1) Parts and components for USML Category I(a) firearms, except barrels, cylinders, receivers (frames), or complete breech mechanisms, when the total value does not exceed $100 wholesale in any transaction, except to any of the countries or entities as provided in 126.1 of this subchapter;

•(2) Parts, components, accessories, or attachments for USML Category I firearms, except barrels, cylinders, receivers (frames), complete breech mechanisms, or fully automatic firearms and parts and components for such firearms, when:

i. The total value does not exceed $500 wholesale in any transaction;

ii. The export is to Canada for endues in Canada or return to the United States, or temporary import into the United States of Canadian-origin items and return to Canada for a Canadian citizen; and

iii. The exporter makes a declaration via the Automated Export System, pursuant to 123.22(a) of this subchapter, and the exporter is eligible to export under this exemption or

•(3) Parts, components, accessories, or attachments for USML Category I firearms, including fully automatic firearms and parts and components for such firearms, when:

i. The total value does not exceed $500 wholesale in any transaction; pursuant to 120.1(c) of this subchapter; or

ii. The export is to Canada for endues by the Canadian Federal Government, a Canadian Provincial Government, or a Canadian Municipal Government; and

iii. The exporter makes a declaration via the Automated Export System, pursuant to 123.22(a) of this subchapter, and the exporter is eligible to export under this exemption, pursuant to 120.1(c) of this subchapter.

ATF Head Confirms Straw Buyers Rarely Prosecuted

President Obama’s choice to head the Bureau of Alcohol, Tobacco, Firearms & Explosives told a Senate panel last month that, the arrest of “straw buyers” was a top Justice Department priority but the department rarely prosecutes cases “due to limited resources.”

The testimony from U.S. Attorney B. Todd Jones came during a rancorous confirmation hearing before the Senate Judiciary Committee, where Republicans – led by Sen. Chuck Grassley of Iowa – questioned Jones’ credentials, his leadership of the U.S. attorney’s office in Minnesota, and his role and involvement in the Fast and Furious gunrunning probe that let more than 2,000 weapons be “walked” across the U.S.-Mexico border to drug smugglers.

Jones acknowledged in questioning by Sen. Ted Cruz, Texas Republican, that of 48,321 cases involving straw buyers, the Justice Dept. prosecuted only 44 of them – saying that “hard decisions” to prosecute were made based on “limited resources.” He also acknowledged that as the U.S. attorney in Minnesota, he never prosecuted anyone accused of being a straw buyer.

“The data demonstrates that it is not a priority for the Obama administration to prosecute those who illegally try to buy firearms,” Cruz said.

Jones took over as acting director after the Fast and Furious operation was made public, although Grassley noted that he served as chairman of the advisory committee to Attorney General Eric Holder from 2009 through 2011, when the operation was in effect.

Jones has now been confirmed as director of ATF. Grassley had asked that the hearing be postponed, saying Jones was the focus of an open investigation by the Office of Special Counsel on his conduct as U.S. attorney in Minnesota.

“When there is a pending investigation, the committee obviously doesn’t have the full information about the nominee,” he said. “In this case, there are allegations of gross mismanagement and abuses of authority in Mr. Jones’ office. And there is a complaint that Mr. Jones retaliated against a whistleblower. These are serious charges, and ones that are of particular concern to me.”

On April 12, Grassley said the OSC reported two pending matters involving the U.S. attorney’s office in Minnesota – a prohibited personnel practice complaint and a whistleblower disclosure alleging gross mismanagement and abuses of authority. A month later, he said the OSC gave the committee an update, saying the whistleblower disclosure case had been closed but the prohibited personnel practice complaint was moving to mediation.

Grassley said employees within the U.S. attorneys’ office had written anonymously to the OSC asking for “a review of the patterns, practices, treatment, and abuse that [they] have suffered.” He said they claimed Jones “had instituted a climate of fear, had pushed employees out of the office, dismissed employees wrongly, violated the hiring practices of the EEOC, and put in place an Orwellian style of management that continues to polarize the office.”

Separately, he said, Donald Oswald, former special agent-in-charge of the FBI’s Minnesota division, wrote to the committee to voice his concerns about Jones.

Magpul Joins Suit Against Colorado’s New Law

Magpul Industries has joined 54 Colorado county sheriffs in filing a federal lawsuit against the state’s recently signed gun-control bills.

But even if the lawsuit is successful, the Erie-based firearm magazine marketer is still planning to leave Colorado. “Just to clarify, we are still moving, regardless of the outcome of this legal action,” said a post on the company’s web page. “That train has left the station, and we are well into the selection and negotiation process as well as arranging many elements to be prepared to launch and already moving some production out of state.”

The lawsuit challenges two bills signed in March by Dem. Gov. John Hickenlooper: House Bill 1224, which restricts ammunition-magazine capacity to 15 rounds, and House Bill 1229, which requires background checks on all gun sales and transfers – including temporary transfers. “This isn’t good public policy. These are really awful bills,” said Weld County Sheriff John Cooke at a press conference. “They are unenforceable and encourage disrespect for the law, which puts both law enforcement and the public in greater danger.”

The Democratic state legislature approved the bills, along with a third bill requiring gun owners to pay for their own background checks, with no Republican votes.

Another manufacturer, HiViz Shooting Systems, has announced that it would move from Fort Collins to Laramie, Wyo.

NYC Taxpayers Help Sponsor Bloomberg’s Gun Control Group

The webpage of Mayors Against Illegal Guns (MAIG) appears to have been purchased and hosted by City of New York, the Weekly Standard reports.

The group was co-founded by New York City mayor Michael Bloomberg and Boston mayor Thomas Menino to “share best practices, develop innovative policies, and support legislation at the national, state, and local levels that will help law enforcement target illegal guns Mayor Bloomberg’s press secretary, Marc La Vorgna, confirmed the City of New York’s involvement with the domain’s purchase and hosting, to the Standard.

When asked whether the purchase and subsequent hosting of the domain by New York City’s Department of Information Technology and Telecommunications was accidental or intentional, La Vorgna replied that the purchase had “definitely been vetted.”

La Vorgna continued, saying that, “Mayor Bloomberg’s push for changes to federal firearms law was part of the New York City agenda” and compared it to other efforts Bloomberg, as mayor, has undertaken – like the effort he and other mayors are involved in to limit the use of food stamps in purchasing sugary drinks.

The Mayors Against Illegal Guns website, according to La Vorgna, like other Bloomberg efforts to lobby the federal government, was done as part of “his capacity as mayor.”

Maggie Haberman and Steve Friess of Politico add, “At minimum, the use of a city web server and city employees underscore what critics have long derided as a blurring of the lines between government resources and Bloomberg’s own multi-billion-dollar fortune, his company, and his pet interests in his three terms as mayor.”

It is unclear why Bloomberg, who has a net worth of $27 billion and has given millions of dollars in donations to Mayors Against Illegal Guns Action Fund, would involve the City of New York in purchasing and hosting the webpage for Mayors Against Illegal Guns.

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.

With all of the attention being focused on gun control during the last several months in the wake of the tragic school shooting in Newtown, Connecticut in mid-December, additional national gun controls seemed all but certain in the first part of the year. The anti’s, led by President Obama, seemed all but certain to achieve all of their goals such as a national ban on so called “assault weapons,” a firearm magazine capacity limit of 10-rounds and a long-sought goal of national firearms registration under the guise of “universal background checks.”

Support for these measures, which initially seemed high in Congress, dwindled as time passed. In mid-April, when it finally came time for the Senate to vote, the anti-gun Obama Administration had by this time realized that the bans on so called “assault weapons” and full-capacity magazines did not have enough support and had sunk its hopes on the background check bill. But like the other two measures, this failed as well.

In light of the defeat of these ill-advised legislative proposals, the National Rifle Association’s Chris Cox, executive director of the Institute for Legislative Action, the NRA’s lobbying arm, issued the following explanation of the recent actions in Senate.

“The Senate rejected a gun control agenda that President Obama has adopted as his own over the last few months, but to which other gun control supporters have bitterly clung for years: banning an ever-lengthening list of semiautomatic firearms, banning magazines that hold more than 10 rounds, and expanding background check requirements to require government permission for many transfers of firearms among private citizens.

“Within minutes of the Senate’s votes, which one political commentator called the “biggest loss” of Obama’s presidency, our Thespian-in-Chief theatrically stood beside a prominent crime victim and several family members of other victims in the Rose Garden, beginning his comments in a somber tone, so that the anger to which he would dramatically build over the next 13 minutes would, in contrast, appear more sincere.

“Obama should not have been surprised by what happened on Capitol Hill, however. A CBS poll in March showed that support for gun control had dropped 10 points since December and a Gallup poll in April showed that only four percent of Americans believed that “guns/gun control” is the biggest problem facing the country.

“However, as Obama’s Rose Garden performance wore on, it became less a monologue delivered for the benefit of the supporters with whom he stood, and became more an ideological soliloquy for his own indulgence.

“Still, Obama is a politician, well-versed in how to mislead through distortion and omission. Thus, early on, he claimed that 90 percent of Americans agree that there should be background checks on firearm transactions and that “most Americans think that’s already the law,” without mentioning that 100 percent of firearm transactions between firearm dealers and non-dealers are subject to background check requirements already, and that only a small percentage of non-dealer transactions are between strangers.

“Obama – whom the Washington Post gave “Three Pinocchios” for lying about the background check issue – also claimed that “the gun lobby and its allies willfully lied about the (background checks) bill” by saying it would implement gun registration. What the NRA had said is that a report from the National Institute of Justice concluded that requiring background checks on otherwise private firearms transfers would be “ineffective” without requiring gun registration. That was not a “lie.” It was, and is, a fact.

“The bill Obama wanted to see pass was S. 649, by Sen. Harry Reid (D-Nev.), the “universal background checks” provisions of which came from Sen. Charles Schumer (D-N.Y.). Because Schumer’s legislation was too severe to have any chance of passage, Senators Joe Manchin (D-W. Va.) and Pat Toomey (R-Pa.), along with Schumer, proposed a compromise amendment in the hope of winning additional votes. However, the amendment was riddled with pitfalls for gun owners, and even some potentially pro-gun provisions added to sweeten the pot were flawed. The amendment fell four votes short of the 60 that were required for passage under a rule the Senate adopted to avoid a filibuster.

“That enraged Sen. Dianne Feinstein (D-Calif.), who, when she rose to introduce her amendment to ban “assault weapons” and “large” magazines, accused the Senate of cowardice. Refusing to stop speaking after her allotted two minutes had expired, Feinstein ranted about the Senate’s 60-vote rule, knowing she would not get 60 votes but apparently believing that she would get at least 51, which under other circumstances would have enabled her to claim victory. One can only wonder what she must have thought when her gun and magazine ban was rejected 40 – 60. Perhaps she held hope that Sen. Frank Lautenberg’s amendment to ban only the magazines would fare differently, but it too went down to defeat, 46 – 54.

“An NRA-supported amendment by Sen. John Barrasso (R-Wyo.), to reduce law enforcement grant funding to states that publish the names of firearm permit holders, was approved.

“Unfortunately, three NRA-supported amendments fell shy of the 60 votes necessary for passage.

First among those was a comprehensive alternative proposal by Sens. Chuck Grassley (R-Iowa), Ted Cruz (R-Texas), Lindsey Graham (R-S.C.) and others, to provide incentives to the states to more fully report criminal and mental health records on persons prohibited from possessing firearms, while ensuring that people with mental health records who do not pose a threat to public safety could petition to have their rights restored. It would also have increased the prosecution of felons who illegally attempt to buy guns, and would have created a clear prohibition against illegal straw purchasing and trafficking of firearms. Finally, it would have provided grants for school security improvements and the creation of school safety guidelines. The vote, was 52 – 48, eight short of what was needed for passage.

“A Right-to-Carry reciprocity amendment by Sen. John Cornyn (R-Texas), which fell three votes short (57 – 43), would have allowed those who can carry concealed firearms in their home states to do so in any other state that issues concealed firearm permits. An amendment by Sen. Richard Burr (R-N.C.), which fell four votes short (56 – 44), would have prevented the government from denying gun possession by veterans based on mental health concerns without a judicial finding of dangerousness.

“Obama, near the conclusion of his remarks in the Rose Garden, said the defeat of gun control in the Senate was only “Round One,” and vowed that, “This effort is not over.”

“Indeed, it’s not over. We can promise the president that our effort to protect and fully vindicate the rights of good Americans to keep and bear arms for self-defense and other legitimate purposes will continue as long as those rights are attacked. Gun owners and other Americans who support their rights have come together like never before, letting their elected representatives know that they stand in support of the Second Amendment, and against taking away people’s rights under the false rationale that all Americans should lose some rights because of the misdeeds of madmen and criminals. We will not abandon that noble cause.

“Senate Majority Leader Reid has pulled S. 649 from the floor for the time being, but will almost assuredly bring it back in the future. And today, there are reports that Obama will soon announce further unilateral gun control actions by the executive branch. For now, please contact your senators, confidently expressing your support for their pro-Second Amendment votes, and respectfully expressing your dissatisfaction with their anti-gun votes. In other words, prepare for round two.”

Bloomberg, Brady Crafted NY “SAFE” Act

A New York Governor Cuomo administration source is flatly denying the governor’s claim that his new anti-gun SAFE Act was carefully drafted, saying the governor himself wasn’t even aware of some provisions when it was hastily enacted into law, The New York Post reports.

“The governor thought the limit on the size of (gun) magazines would only apply to assault-style rifles, not to handguns,” said the source. “That’s why there’s the big problem now with handguns, among other things in the statute.”

The legal sale of virtually all semiautomatic handguns will soon be impossible because Cuomo’s law limits the size of magazines to seven shots, virtually none of which are manufactured for sale.

“Much of what’s in the law was drafted by people connected to Mayor Bloomberg and the Brady Center, not by the governor’s staff,” the source said. “That’s why there are so many problems with it.”

Turn in Your Neighbor, Get $

Meanwhile, opponents of Cuomo’s SAFE Act were outraged last week with the disclosure that the state would pay $500 bounties to persons reporting the illegal ownership of weapons.

“This is turning neighbor against neighbor, and it is rubbing peoples’ noses in it,’’ said New York Rifle and Pistol Association President Tom King, who has predicted that hundreds of thousands of owners of assault-style rifles that must be registered under the new law would refuse to obey it.

“If you thought people were disturbed and upset about the new law, they are just totally outraged over this bounty,” King added.

Meanwhile, Cuomo has turned a deaf ear to the thousands of New Yorkers who have protested the SAFE Act. Dozens of county legislatures have now passed resolutions condemning the Draconian gun law. In fact, 52 counties (of New York’s 62 counties) have either passed or have pending, a resolution opposing the SAFE Act.

The NRA and its state association, The New York State Rifle and Pistol Association, have filed a complaint in the United States District Court for the Western District of New York challenging the SAFE Act. The NRA pledges it will continue to stand by its members in New York and push for repeal of this unconstitutional law, and will continue to actively support litigation that challenges the SAFE Act.

Said Chris W. Cox, executive director of NRA’s Institute for Legislative Action, “Governor Andrew Cuomo and the New York State Legislature usurped the legislative and democratic process in passing these extreme anti-gun measures with no committee hearings and no public input. This obvious disrespect for New Yorkers and their Second Amendment rights will not be tolerated.”

The New York Secure Ammunition and Firearms Act threaten severe penalties for previously lawful activities, including acquiring certain commonly owned firearms, ammunition magazines and ammunition. It lowers New York’s arbitrary magazine capacity limit from ten rounds to seven. It also greatly expands the state’s existing ban on commonly owned semiautomatic firearms, and will require New York gun owners to undergo background checks on ammunition purchases.

“The NRA will defend the right of law-abiding New Yorkers to Keep and Bear Arms under the Second Amendment,” added Cox, “Despite the wishes of Governor Cuomo, law-abiding citizens have a fundamental right to keep commonly possessed firearms for defense of themselves and their families and for other lawful purposes including the enjoyment of New York’s rich hunting and sporting heritage.”

Rock River Arms’ Co-Founder Larson Dies

Mark Lawson, 50, President of Rock River Arms of Colona, Ill. died April 5. Larson, along with his brother Chuck, co-founded the company in 1996, which produces 1911-type pistols and AR–style rifles.

No Need to Understand Them – Just Ban Them

Rep. Diana DeGette, Colorado Democrat and a co-sponsor of a bill to ban high-capacity magazines, appears not to understand how they work or even what they are, but she is not letting that get in her way.

  Asked at a Denver Post forum how banning large-capacity magazines would help reduce gun violence, DeGette replied: “I will tell you these are ammunition, they’re bullets, so the people who have those now they’re going to shoot them, and so if you ban them in the future, the number of these high capacity magazines is going to decrease dramatically over time because the bullets will have been shot and there won’t be any more available,” she said.

The Colorado Republican Party and National Rifle Association both took shots at the congresswoman’s remarks according to the Post, which also provided a statement from DeGette spokeswoman Juliet Johnson, who said she simply misspoke.

The congresswoman has been working on a high-capacity assault magazine ban for years, and has been deeply involved in the issue; she simply misspoke in referring to ‘magazines’ when she should have referred to ‘clips,’ which cannot be reused because they don’t have a feeding mechanism.

“Quite frankly, this is just another example of opponents of common-sense gun violence prevention trying to manipulate the facts to distract from the critical issue of keeping our children safe and keeping killing machines out of the hands of disturbed individuals. It’s more political gamesmanship that stands in the way of responsible solutions.”

According to a pool report, DeGette was one of the participants in a roundtable on gun violence in Colorado recently with President Obama, Attorney General Eric H. Holder, Jr., other elected officials, law enforcement representatives, and parents of gun violence victims.

NSSF on Passage of CT Legislation

The National Shooting Sports Foundation (NSSF) has issued the following statement in relation to the new Connecticut gun laws:

Gov. Daniel Malloy has signed into law a package of gun-control legislation that was assembled in secret by a small group of state legislators and that never received a public hearing. Most legislators had little time to even read the actual bill language.

The unfortunate results of this process, which made it appear that all points of view were being heard when in fact true expertise was shut out when it was most needed, means that mistakes in what is now enacted law will have to be corrected.

For example, language in the new law specifies a procedure for licensed firearms retailers to perform mandatory “universal” background checks on private party transactions that is not permissible based on federal law and regulations governing the National Instant Criminal Background Checks (NICS) system. As we read it, this mistake in lawmaking means that all private party transactions in the state now cannot be accomplished legally.

We share the goal of wanting to make Connecticut safer for our citizens following the unspeakable tragedy at the Sandy Hook Elementary School. In the end, however, public safety has not been enhanced and the unintended consequences of behind-closed-doors lawmaking will cause considerable confusion until the General Assembly corrects its mistakes.

Here is where we stand today. Law-abiding citizens of this state now have greater restrictions on the Second Amendment and state constitutional rights while Connecticut’s firearms manufacturers will be forced to seriously weigh the impact on their businesses and their employees of the state’s double-standard of you can build it here, but not sell it here, public policy formulation. We will be carefully studying all provisions of the law for possible challenge in the courts.

Colt’s Names Veilleux President/CEO

The Governing Board of Colt’s Manufacturing Company, LLC has announced the appointment of Dennis Veilleux as president and chief executive officer. Veilleux succeeds retired Lt. Gen. William M. Keys, USMC, who will continue to serve in his emeritus position and as a member of the board. Veilleux joined Colt in 2006 as the executive director of engineering and eventually rose to chief operating officer.

Democrats Push Fines for Gun Owners

A group of congressional Democrats has signed on to new legislation that would mandate liability insurance for all gun owners in the United States — and fine those who refuse to purchase it as much as $10,000.

The Daily Caller reports that New York Rep. Carolyn Maloney’s Firearm Risk Protection Act says that all gun buyers — before they buy — purchase and show proof of “a qualified liability insurance policy,” and that those caught owning a weapon without the insurance are subject to harsh fines.

“It shall be unlawful for a person who owns a firearm purchased on or after the effective date of this subsection not to be covered by a qualified liability insurance policy,” the text of the bill states.

Maloney says her bill would shift the cost of gun violence back onto those who own the weapon. Gun rights groups call that logic ridiculous, however.

“(The bill) is ridiculous on its face, as it presumes law-abiding gun owners are guilty for merely exercising a fundamental, constitutional right,” said Chris Cox, the executive director of the NRA’s Institute for Legislative Action.

The author publishes two of the small arms industry’s most widely read trade newsletters. The International Firearms Trade covers the world firearms scene, and The New Firearms Business covers the domestic market. He may be reached at: FirearmsB@aol.com.

Reed Exhibitions Decision Results in Industry Walkout

Reed Exhibitions has decided to postpone, for now, the Eastern Sports and Outdoor Show given the controversy surrounding its decision to limit the sale or display of modern sporting rifles (also called ARs) at the event. The show was scheduled for February 2-10 in Harrisburg, PA.

“Our original decision not to include certain products in the Eastern Sports and Outdoor Show this year was made in order to preserve the event’s historical focus on the hunting and fishing traditions enjoyed by American families,” said Chet Burchett, Reed Exhibitions President for the Americas. “In the current climate, we felt that the presence of Modern Sporting Rifles would distract from the theme of hunting and fishing, disrupting the broader experience of our guests. This was intended simply as a product decision, of the type event organizers need to make every day.

“It has become very clear to us after speaking with our customers that the event could not be held because the atmosphere of this year’s show would not be conducive to an event that is designed to provide family enjoyment. It is unfortunate that in the current emotionally charged atmosphere this celebratory event has become overshadowed by a decision that directly affected a small percentage of more than 1,000 exhibits showcasing products and services for those interested in hunting and fishing.

“ESS has long been proud to participate in the preservation and promotion of hunting and fishing traditions, and we hope that as the national debate clarifies, we will have an opportunity to consider rescheduling the event when the time is right to focus on the themes it celebrates.”

Reed was notified by numerous firearms manufacturing companies of their decisions to cancel their attendance at the event. Additionally, due to Reed’s refusal to reconsider their decision to ban Modern Sporting Rifles from the February 2-10 Eastern Sports Show in Harrisburg, PA, the National Rifle Association also decided to withdraw from the show.

Apparently Reed, a European headquartered company, knows nothing about firearms, as it states that the presence of AR rifles “would not be conducive to an event that is designed to provide family enjoyment or hunting.” It seems that Reed believes an AR platform rifle is not used for hunting or recreational target shooting or plinking but is rather only some deranged murderer’s tool and family enjoyment is derived from viewing fish hooks and the like – even if that fish hook has a sharp point.

NSSF Statement

NSSF posted the following statement on its website: “We have just learned that Reed Exhibitions has decided to postpone the 2013 Eastern Sports and Outdoor Show. In the days following Reed Exhibitions’ announcement that Modern Sporting Rifles would be prohibited from the Eastern Sports and Outdoor Show, the leadership of the National Shooting Sports Foundation (NSSF) has been in intense, frank discussions with Reed Exhibitions management in an effort to reverse this unacceptable decision. These discussions reached an impasse.

“NSSF is in no way affiliated with, nor does it participate in or exhibit at this show in any way. Reed Exhibitions does, however, manage the NSSF-owned SHOT Show (though Reed manages the SHOT Show, all SHOT Show decisions, policies and actions are made at NSSF’s direction). Because of Reed’s recent actions, NSSF is considering all options regarding the management of future SHOT Shows.”

DHS Seeks Select-Fire AR Rifles as Obama Moves to Ban Semi-Auto Civilian Ownership

The Department of Homeland Security (DHS) has put out a solicitation for 7,000 5.56x45mm selective-fire Personal Defense Weapons – the semi-auto version of which are mislabeled “assault weapons” by the government when owned by civilians.

The solicitation, issued last June, lists the rifles as “suitable for personal defense in close quarters and/or when maximum concealment is required. Additionally, DHS is asking for matching full capacity 30-round magazines – the kind of magazines the government calls “high capacity” when in the hands of civilians.

Senator Greg Ball (R, C, I-Patterson (NY)) Chairman of the Senate Homeland Security Committee said, “Now the Department of Homeland Security even agrees that these Modern Sporting Firearms, made illegal by New York’s Governor Cuomo (who wants to be president), are suitable for self defense. On top of that, a recent story reports that two RIT (Rochester Institute of Technology) students in Rochester, NY who were legal gun owners were protected by an AR-15. The story may have had a very tragic ending, had Governor Cuomo’s anti-self defense bill been in full effect. If the story is accurate, their legal ownership of this modern sporting rifle evidently saved their lives. While Cuomo says ‘it doesn’t take 10 bullets to kill a deer,’ it evidently only took an unloaded AR-15 to protect a household. Luckily these criminals struck before New York Governor Cuomo’s gun grab was fully unleashed.”

ATF Issues Letter on “Universal Background Checks”

In apparent deference to the anti’s push for background checks on all gun sales, the Bureau of ATF has issued a mid-January letter on the subject to all FFL-holders.

The letter encourages FFLs to facilitate firearms sales between private individuals through FFL businesses. Such transfers are subject to the same rules and regulations as other firearm sales conducted by FFLs, including compliance with state and local law. The procedures are thus:

• Upon receipt of a firearm, FFLs are required to record the acquisition of the firearm in their required records;
• Prior to conducting the transfer of a firearm to an unlicensed person, the purchaser and the FFL must complete ATF Form 4473, and the FFL must contact NICS and receive a proceed response (or wait until three days have passed), which must be recorded on the ATF Form 4473; and
• The FFL must record the disposition of the firearm in his/her required records, and follow all other regulations with respect to the disposition of the firearm or firearms.

ATF Guns Frequently Lost, Stolen

ATF has weapons stolen or loses them more frequently than one might think, according to a 2008 report from the Office of the Inspector General with the Dept of Justice.

In a five-year span from 2002-’07, for example, 76 ATF weapons were stolen, lost or missing, according to the report. That’s nearly double the number compared with the FBI and the U.S. Drug Enforcement Administration, when considering rates per 1,000 agents.

The latest loss involved an embarrassingly mismanaged sting operation in Milwaukee, Wisconsin when an ATF agent’s SUV was broken into and two pistols and an H&K MP5 submachine gun were stolen. The two pistols have since been recovered but the MP5 submachine gun has vanished.

The author publishes two of the small arms industry’s most widely read trade newsletters. The International Firearms Trade covers the world firearms scene, and The New Firearms Business covers the domestic market. He may be reached at: FirearmsB@aol.com.