BATFE Rings in the New Year with More Executive Gun Control
NRAILA.org
On January 2, BATFE issued its
first ruling of 2015. Identified as
ATF Rul. 2015-1,
it significantly expands the scope of
activities that BATFE considers to be
“manufacturing” for purposes of the Gun Control
Act (GCA). While BATFE claims this ruling
is simply a “clarification” of their prior
position taken in
ATF Rul. 2010-10,
2015-1 is clearly an attempted expansion
of the definition of manufacturing.
The GCA primarily regulates commercial actors in
the firearm industry. Only those “engaged
in the business” of dealing, manufacturing, or
importing firearms are required to have the
applicable Federal Firearm License (FFL).
As applied to manufacturers, a person is
“engaged in the business” of manufacturing
firearms, and must therefore be licensed and
serialize any firearm manufactured, when the
person “devotes time, attention, and labor to
manufacturing firearms as a regular course of
trade or business with the principal objective
of livelihood and profit through the sale or
distribution of firearms manufactured.”
The GCA also makes an allowance for licensees
who hold only “dealer” licenses to engage in
common gunsmith activities including “repairing
firearms or … making or fitting special barrels,
stocks, or trigger mechanisms to firearms . . .
.”
In the ruling, BATFE goes through several
contortions of the English language to reach
conclusions that severely complicate the making
of firearms for private (i.e., noncommercial)
use. Along the way, BATFE proposes two
important thresholds in the manufacturing
process. First, when sufficient
manufacturing is performed on a receiver blank,
often referred to as an “80% receiver,” so that
it legally becomes a “frame or receiver” of a
firearm. Unfortunately, the ruling does
little to identify exactly when a receiver blank
becomes a frame or receiver. The second
threshold is crossed when something that may
already legally be a “frame or receiver” is made
suitable, or more suitable, for use as a
functional firearm.
According to the new ruling, “when a person
performs machining or other manufacturing
process on a blank to make a firearm ‘frame or
receiver,’ or on an existing frame or receiver
to make it suitable for use as part of a ‘weapon
… which will or is designed to or may readily be
converted to expel a projectile by the action of
an explosive,’ that person has performed a
manufacturing operation other than what is
contemplated by the GCA of dealer-gunsmiths ….”
It’s unclear how this new threshold approach
will play out in practice. If each step is
carried out by a different subcontractor, the
ruling would seem to require that each frame or
receiver so “manufactured” would have to be
serialized and marked by each subcontractor.
The logic in the ruling is stretched
especially thin where it describes when the
“sale or distribution” of a firearm necessary to
trigger the manufacturer licensing requirement.
BATFE claims a sale or distribution includes
situations in which a gunsmith receives a
firearm from a manufacturer, performs a
“manufacturing operation,” and then returns the
firearm to the same customer. The ruling
states:
BATFE claims a sale
or distribution includes situations in which a
gunsmith receives a firearm from a manufacturer,
performs a “manufacturing operation,” and then
returns the firearm to the same customer.Although
licensed gunsmiths return firearms to their
customers after performing the contracted work,
the GCA does not consider this to be a sale or
distribution of the firearms manufactured. This
is because the returned firearm has only been
repaired or temporarily received for custom work
– it has not been machined in a manner or
otherwise created or made suitable for use as
part of a weapon. However, when a licensed
gunsmith takes in a frame or receiver to perform
machining or other manufacturing process, that
gunsmith “distributes” a firearm to the customer
upon return because that manufacturing activity
results in the making of a different “frame or
receiver” and also a “weapon … which will or is
designed to or may readily be converted to expel
a projectile” – both defined separately as a
“firearm” under the GCA.
Unfortunately for gunsmiths, the
ruling gives no guidance to determine the
difference between “custom work,” which
seemingly is not considered manufacturing, and
“machining,” which is manufacturing (at least
when one of the identified thresholds is
crossed) and would therefore require a gunsmith
to comply with all of the GCA’s requirements for
licensed manufacturers.
While the GCA’s requirements for obtaining a
manufacturer’s license may not appear
substantially more difficult than obtaining a
dealer-gunsmith license at first glance, there
are numerous requirements beyond obtaining the
additional license. Not only must a
manufacturer obtain a slightly more expensive
manufacturer’s license, but manufacturers are
required to serialize and mark every firearm or
receiver they manufacturer and the markings must
comply with specific requirements in federal
law. Manufacturers are also subject to
additional record keeping requirements beyond
those required of a licensed dealer.
Perhaps most importantly for dealer-gunsmiths,
if merely working on a firearm means that a new
firearm is manufactured, the GCA would prohibit
return of the “new” firearm to the owner without
a background check, and, in the case of an owner
who lives in another state, the “new” firearm
must first be transferred to a licensed dealer
in the owner’s state of residence. On top of
the GCA requirements, the International Traffic
in Arms Regulations require anyone who
manufacturers firearms to complete a costly
annual registration. With all of these
additional costs, some dealer-gunsmiths could be
forced to abandon their current gunsmithing
work.
In addition to limiting the machining work that
gunsmiths can engage in, the ruling claims that
an FFL not licensed as a manufacturer or an
unlicensed machine shop may not allow unlicensed
persons to “initiate or manipulate a CNC
machine, or to use machinery, tools, or
equipment under its dominion or control to
perform manufacturing processes on blanks,
unfinished frames or receivers, or incomplete
weapons.” This portion of the ruling appears to
require any business that rents out its
machinery or tooling to ensure that the tooling
is not used in any part of the manufacturing of
a firearm or of a firearm frame or receiver.
It’s unclear how BATFE reaches this result
without completely rewriting the GCA’s
definition of manufacturing, which BATFE does
not have the authority to do by formal
regulation, much less an informal “ruling.”
Although BATFE may have intended this ruling to
act as a “clarification,” the new guidelines
raise far more questions than they answer.
In fact, the only thing truly “clarified” by
this ruling is that the Obama administration
will continue to bypass Congress with more
executive gun control measures.