Putting Gunsmiths Out of Business- ITAR

Gunsmiths and those selling commercial ammo are now (apparently have been) required to pay a $2250 annual fee to the government due the International Traffic in Arms Regulation. According to information that I just received from ATF, all gunsmiths are required to do this, regardless of license type. ATF advised me that 07's need to do it, but a careful reading of the regulation clearly states that anyone "engaged in the business" of gunsmithing or dealing in commercial ammunition also need to register. This law was clearly not intended for this but, rather, true arms trafficking and exportation. This will put 80% of gunsmiths out of business. Take it seriously... there have been many arrests with tens of millions levied in fines. Call ATF and they will send you an information packet that they prepared.

Is anyone aware of a legislative effort to deal with this? I would expect that Brownells or Midway would be spearheading it.

I do not have an answer for this but can tell you positively that ATF is NOT the regulatory or enforcement agency for ITAR.
ITAR is regulated by the Secretary of State and Commerce Depts so I would go there for answers.

thermite said:

This, and a million other Gummint FUBAR's need no confrontation, legislative. administrative, legal, or otherwise.

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ITAR is "International Trafficking in Arms Regulations," enacted by Reagan during the Cold War. It monitors the export of "Defense Related" items that could be used against us overseas: weapons, explosives, satellite techology, and cryptography.

ITAR is run/regulated by the State Department -- it has nothing to do with the BATF.

lazlo said:

ITAR is "International Trafficking in Arms Regulations," enacted by Reagan during the Cold War. It monitors the export of "Defense Related" items that could be used against us overseas: weapons, explosives, satellite techology, and cryptography.

ITAR is run/regulated by the State Department -- it has nothing to do with the BATF.

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BUT, the BATF does require a licensee to be in compliance with all federal, state, local, and govt (such as EPA) laws and regulations. This gets them into local stuff like zoning.

But ITAR is about being engaged in something that requires ITAR. Not every 01 or 07 will have to ITAR register, and some non licensees have to and have no clue that they need to.

As if the $2250 fee was not enough, you cannot pay by check, money order, cashiers check, debit or CC, you MUST pay by wire transfer.

You can seek exemption for a specific product by applying and proving that it has no LE or military applications. One example MIGHT be an integral 10-22 supressor for example, but they might come back with pictures Of the Izzy military shooting rioters with them and deny that application.

As I understand it the original intent of ITAR was so that the govt had a registry of folks in the industry if they needed them in time of war (in a WW2 type effort) but govt waste and boondoggles have led to the $2250 fee...the entity is supposed to be self supporting, so they did that by just multiply the fee by 5x (it was well under 1000 not THAT long ago). There is a blanket exemption for sporting shotguns and ammunition, and a similar exemption for ANYTHING marketed to "civilians" not govt and LE agencies as the primary customer would really simplify things for many smaller companies. Just because the govt uses a few remington 700 bolt action rifles for example does not mean that every mfg of that type of rifle needs to be ITAR registered IMHO, but the current regulations DO require that.

4.3 ITAR’s Impact on the Cost of Compliance
A final root cause of the For-Profit Stakeholder’s loss of global market share is the cost of complying with the current export control regime. ITAR places the burden of compliance on the exporter and thus levies a cost of compliance that reduces domestic companies’ profits and limits their ability to compete for a share of the global market. Specifically, the Center for Strategic and International Studies reports that compliance costs U.S. companies approximately $50 million per year ; these funds are typically spent on hiring export control compliance officers, consulting external legal counsel, and training employees on compliance practices. In many cases, smaller firms that are unable to afford compliance costs are displaced from international competition or from the industry altogether

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Long read here..............

http://www.google.com/url?sa=t&rct=...jhuCogJzwp0SbzunHmAlaiQ&bvm=bv.42965579,d.dmg

Seems like something Uncle Sam and Auntie Feinstein would try to pull off and sneak in. I'm leaning on the same wall with thermite in that if it was going to have that big of an impact there'd be more hype about it, but you never know. The ATF and the Secretary of State and Commerce Depts have some "interesting" laws that seem to have odd effects on the firearms industry.........I dont like it.
~RPM

Canada has something similar to ITAR called Controlled Goods.

Although it says many times its related to Exporters, it still manages to make absolutely everybody involved at any level who may never import/export or is 10 levels removed from the head company, still required to register, or at least confused enough that they do even if they maybe really don't have to. There's lots of regular machine shops that have had to register for it even if they do nothing that even falls in the product categories, and I think its just the beginning.

There's lots of scope ring/mount manufacturers in the US that won't even ship a screw to Canada because of how confusing and worried they are about ITAR and export regulations and how much of it is left to anyone in power's interpretation, go bankrupt in court proving you're innocent and see if they care.


Talking about gunsmiths, in my area to get the gunsmith license to operate legally you need proof of insurance. Imagine how many guys that would rule out instantly... it might actually rule me out of it as well, gonna be figuring more about that later today as asking about it red flagged me instantly.

thermite said:

'Enacted ... Reagan....'

Seems if it were a significant problem for Joe Gunsmith we'd have heard about it sooner?

Bill

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The BATF has ramped up the enforcement of the "other laws and regulations" stuff quite a bit in the last 10 years. There also used to be a "gunsmithing" FFL and now there is just 01 and 07, and they have stepped up the enforcement about what constitutes "mfg". Some of the increased enforcement re zoning came in under Clinton...and was geared towards killing off some of the kitchen table gun dealers who were federally licensed.

They insist you must have a licensed premises even if you only sell at guns shows, and must be zoning compliant. Now imagine if they did this to food court vendors, or any number of other business who operate in a similar fashion ??

The ITAR stuff is well known in the Title II world, I first heard of it when I got interested in that stuff about 12 years ago then, the fee at that time was $600ish.

We pay those fees too the mfg does not, it gets added to the product cost.

Bill

Considering how much money they're throwing at going after athletes. I don't imagine the ITAR budget is getting cut anytime soon.

Give me an answer to this. A fellow in Kansas was supposed to do a custom wood stock for me. Said he had an FFL. I sent it to him and the funds up front. He got a little upset with me when I asked for my barreled action and wood back about 6 months after it was due. It wasn't that much of a deal until I searched the internet and found he had screwed several folks. He got evicted from his home, his phone was cut off, and he disappeared. I got in touch with the ATF in KC, Ks. and the lady offered to help. After a couple months I finally got in touch with her again. She said he broke Federal law as he received a firearm and wasn't a licensed FFL. I asked what do I do? She said just go to the local police. She didn't want to fool with it. Fortunately the local police took a report and combined it with a couple other complaints. A felony theft warrant has been issued.
It appears the ATF is only about hassling small gunsmiths about their paperwork.
A fellow wrote a letter to the editor of The Dallas Morning News newspaper in Dallas, Tx today. Said he used to work for a large sporting goods store. He would call in on a 4473 form before selling a firearm. Said if ATF turned the guy down, that was it. If he was a crook or whatever, why didn't they followup?

butchlambert said:

Give me an answer to this. A fellow in Kansas was supposed to do a custom wood stock for me. Said he had an FFL. I sent it to him and the funds up front. He got a little upset with me when I asked for my barreled action and wood back about 6 months after it was due. It wasn't that much of a deal until I searched the internet and found he had screwed several folks. He got evicted from his home, his phone was cut off, and he disappeared. I got in touch with the ATF in KC, Ks. and the lady offered to help. After a couple months I finally got in touch with her again. She said he broke Federal law as he received a firearm and wasn't a licensed FFL. I asked what do I do? She said just go to the local police. She didn't want to fool with it. Fortunately the local police took a report and combined it with a couple other complaints. A felony theft warrant has been issued.
It appears the ATF is only about hassling small gunsmiths about their paperwork.
A fellow wrote a letter to the editor of The Dallas Morning News newspaper in Dallas, Tx today. Said he used to work for a large sporting goods store. He would call in on a 4473 form before selling a firearm. Said if ATF turned the guy down, that was it. If he was a crook or whatever, why didn't they followup?

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I think you will find that most government agencies feel that they are in charge of issuing licenses to the people who voluntarily pay large sums of money to jump through hoops that would give a dolphin a hernia and stand in multiple lines for hours on end for a piece of paper that will go into a filing cabinet and not see the light of day again until it is pulled out to be shredded, disposed of and replaced 365 days later. As far as the people who don't have the piece of paper are concerned. The people who have the paper are on the list, and people who are not on the list OBVIOUSLY are not doing what the piece of paper would allow them to do so they are not a concern. Besides, the people who are not on the list are NOT their department.
I read something about large birds and sand once.

ITAR is for manufacturing, not gunsmithing or any activity that requires a 01.
Manufacturing is a 07.

Also never a "gunsmithing" license only. 01 covers that activity along with regular firearms dealing.

Claude, You are right. When I got mine they said it was actually primarily for buying and selling, but I needed to to gunsmith. They encouraged me to buy and sell. Why? I don't know.

thermite said:

Actually, 'they' do. Lots of fees and permits and paperwork to even push an ice-cream cart.

As said. Cut their budgets. There ain't near enough tar, feathers, or lamposts in the world to do it any other way.

Bill

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The point was, the food cart vendor (I typed court by mistake) does NOT have to have another licensed premises other than his food cart, IE his home where he might store his hot dog cart is not required to be zoned for retail sales.

As for the 01 for "gunsmith" only, maybe they were willing to be a bit more flexible on the zoning req if it was a home based SERVICE business not a home based retail sales business ?? You can still get an 07 because home based mfg is treated different zoning wise a lot of places than home based retail sales. Most of the kitchen table gun dealers Clinton got rid of were not zoning compliant doing that, but would not be for selling Amway either, or Avon ;-).

And Claude, they have been altering and redefing what they define as "mfg" now. The heart of the matter really seems to be whether the work you do is at the request of a specific customer. If you decide you are doing a lot of the same thing over and over, and decide to streamline things it can slip over into mfg from gunsmithing.

Example a guy I know has ran a thriving gunsmithing and retail sales shop for over 40 years, he over the years has streamlined things he did a lot. One example is 10-22 barrels threaded into the reciever, he was doing that many years ago, he did quite a few, so he would buy say a dozen Wilson blanks, and turn, thread, polish and blue them...ready to go. A real time saver. BUT, that is mfg(as far as ITAR goes), not gunsmithing.

He was also into doing the Ruger single sixes over to 22 K chuck, same deal, streamline and make some parts ahead and have them on hand, again mfg not gunsmithing to order, qualifies as mfg under ITAR.

A company produces barrels for firearms and sells the barrels to another company that assembles and sells complete firearms.
Because barrels are not firearms, the company that manufactures the barrels is not a manufacturer of firearms. The company that assembles and sells the firearms should be licensed as a manufacturer of firearms.

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Again to grasp ITAR fully you need to look at the fact that it is not about the license you have, it is about what you DO.

A gunsmith regularly buys military type firearms, Mausers etc., and sporterizes� them for resale.
The gunsmith is in the business of manufacturing firearms and should be licensed as a manufacturer.

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Many gunsmiths develop little accessories that they include in their offerings and never give it a thought that they are in fact engaged in mfg of items on the munitions list, and must then pay ITAR (whether they have an 01, an 07, or even no ffl at all). The devil is in the details, for example if you dream up a part to make a Pratt and Whitney rifling machine work better and you market it, BINGO you need to register for ITAR.

Many many small mfg start up and engage in business every day without ever knowing they are non compliant.


Bill

http://www.pmddtc.state.gov/regulations_laws/documents/consolidated_itar/ITAR_Part121.pdf


Spend just a little time reading over that list and you might see what we are getting at, this thing is a hydra with 1000 heads.


Bill

Again there never was a gunsmithing license
Home based means zero to the BATFE.
If you compliant with local laws and zoning then you can be issued a license.

As to what constitute gunsmithing or manufacturing , all you need to do is follow the rules.
Complicated and changing , sure but those are in the code.

Been a 01 for 29 years so I understand the law.

Very simple, another means of gun control in the USA. Very pleased that in Canada, right now anyway, the powers in charge don't care about ITAR and have put it off constantly. Hope it stays that way and I wish that all North America could get on the same page. Some good in Canada and some good in the USA.

Claude Wright said:

ITAR is for manufacturing, not gunsmithing or any activity that requires a 01.
Manufacturing is a 07.

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Thank you Claude, but I doubt the tinfoil hats will believe it's anything other than a BATF conspiracy.

When McMaster was busted and fined for selling industrial supplies to bad guys, it was an ITAR violation (during Bush's tenure). That's why they stopped shipping to Canada -- it's just too much effort for McMaster to scan every customer on the ITAR bad guy's list.

Anvil Jenkins said:

http://www.pmddtc.state.gov/regulations_laws/documents/consolidated_itar/ITAR_Part121.pdf

Spend just a little time reading over that list and you might see what we are getting at

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...getting at. Since 1993:

ITAR also controls the shipment of supercomputers to known bad guys:


So the National Research Council pointed out that many common PC's, even a Playstation 3 (which was designed and largely built in the US), qualifies under the ITAR munitions list. Ridiculous, right?

Until you read that Iran built a supercomputer to run nuke detonation calculations with off the shelf AMD boards.

Iranian Scientists Develop Country's Most Powerful Supercomputer - -

lazlo said:

Thank you Claude, but I doubt the tinfoil hats will believe it's anything other than a BATF conspiracy.

When McMaster was busted and fined for selling industrial supplies to bad guys, it was an ITAR violation (during Bush's tenure). That's why they stopped shipping to Canada -- it's just too much effort for McMaster to scan every customer on the ITAR bad guy's list.

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I don't think it is a BATF conspiracy. But I DO think it is an ill conceived, expensive, and far reaching mandate and agency when the intended product is not destined for export especially. And when the fees can quadruple over a decade and it really does not attract much attention because so few people really understand how far reaching and overly intrusive it really is.

There should not be a $2250 annual wire transfer registration required to make and sell a 10-22 threaded barrel that you machined and blued from a green mountain barrel blank (and green mountain had to pay the $2250 too) chambered with a Pacific Precision chambering reamer (ya they got hit for the $2250 too).

Bill

Claude Wright said:

Again there never was a gunsmithing license
Home based means zero to the BATFE.
If you compliant with local laws and zoning then you can be issued a license.

As to what constitute gunsmithing or manufacturing , all you need to do is follow the rules.
Complicated and changing , sure but those are in the code.

Been a 01 for 29 years so I understand the law.

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I have seen far more than one person who has been an 01 for a LONG time that plainly does NOT understand the law :-). They will insist inane things, like the "fact" that a non ffl cannot ship a gun to an ffl, and that Machine guns and other title II are "illegal as h*ll".......spew crap about having to have a "class 3 license" to even own MG and title II. I have no doubt you may know the law to the letter, but in general being an FFL for 29 years is no indicator of that.

The guy I spoke of that makes or made the 10-22 barrels, he has had an FFL for over FOURTY years and he has no concept that he is not in compliance with ITAR as an 01 (or even if he did not have the license) making those 10-22 barrels as an "on the shelf" item.

There are also different standards of what constitutes mfg as far as BATF goes and ITAR. Also what is subject to FET or not.

I'm sure you remember when BATF did not care at all about zoning, they found out that forcing compliance with zoning and other minutia could give them a reason to deny some licenses and some renewals.

They also strong armed some folks who had home (kitchen table) gun shops to either build a small building in their back yard, or set up a separate entrance that only led to the licensed premises.

I have only been an 07 for 4 years now, but I do try to keep up on things.