ITAR UPDATE – Proposed Rule Change May Help FFLs

Federal Firearms Licensees (FFLs) are required to jump through various hoops to be able to sell guns as a business. From zoning laws, to insurance to National Firearms Act (NFA) payments, and to detailed record keeping, license holders need to be in compliance or risk losing their ability to transfer firearms. Going a step further, manufacturers of small arms have an additional set of rules to follow and records to keep. Not in the least being the International Traffic Of Arms Regulations (ITAR), a program meant to keep weapons from being illegally exported into the hands of enemies of the United States.

In theory, the idea is sound: licensing and fees that support an infrastructure that prevents weapons from being exported illegally. In practice, ITAR can be a burdensome challenge for smaller businesses that have no intention of exporting anything, let alone weapons. The flat/first year ITAR licensing fee alone is $2,250.

A proposed rule change could help eliminate the ITAR burden on some manufacturers or gunsmiths by declassifying “commercially available” guns and ammunition, eliminating the need for licensing fees. Although there is no defined timeline, details on the possible deregulation activity can be found below.

ITAR UPDATE – Proposed Rule Change May Help FFLs

https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201710&RIN=1400-AE30

This rule will revise Categories I, II, and III of the United States Munitions List to include those items that provide the United States with a critical military or intelligence advantage or otherwise warrant control at the highest level. Removed from Category I and III are commercially available firearms and ammunition, which in most cases are available for purchase at retail establishments across the United States and around the world. These firearms and ammunition, as well as other items removed from the United States Munitions List, will continue to be controlled for export under the Commerce Control List of the Bureau of Industry and Security at the Department of Commerce. Transition from control under the United States Munitions List to the Commerce Control List will result in a net reduction in regulatory burden for the affected manufacturing and export community. Under the International Traffic in Arms Regulations, U.S. manufacturers and exporters of defense articles on the United States Munitions List are required to register with the Department of State’s Directorate of Defense Trade Controls and pay an annual registration fee. Under the Export Administration Regulations, there is no comparable registration requirement or fee for items on the Commerce Control List.  Therefore manufacturers and exporters of only items transitioned from the United States Munitions List to the Commerce Control List, such as most commercially available firearms and ammunition, will no longer be required to register or pay a fee as part of compliance with U.S. export controls.

department of state ITAR Registration Guidance

https://www.pmddtc.state.gov/compliance/documents/ITARRegReqFirearmsManufacturers.pdf

(Current FFL ITAR guidance.)

Thanks to Mike/Renegade for the tip!