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December 12th, 2017

Possible Progress on ITAR Regulation of Gunsmiths

ITAR Department of State Rule Change

If you are a gunsmith, or do any machine works on firearms, you need to know about ITAR, the International Traffic in Arms Regulations which are enforced through the U.S. Department of State (DOS). ITAR applies to companies that create sophisticated weapons systems. However, under DOS interpretations in recent years, ITAR may also apply to persons and businesses that do simple, basic gunsmithing tasks. That could require filling out lots of paperwork, and paying the Fed’s hefty fees, starting at $2250 per year. A Guidance Statement issued by the DOS Directorate of Defense Trade Counsels (DDTC) in July, 2016 (under the Obama Administration) gave rise to serious concerns that DOS was going to require every gunsmith to register under ITAR, under threat of massive fines and penalties. READ About DDTC ITAR Guidance.

Thankfully, it appears that the Trump Administration is working to narrow the scope of ITAR so that it would NOT apply to basic gunsmithing activities, and not apply to common gun accessories that are not exported. IMPORTANT: Changes have NOT been made yet, but it appears the Feds are heading in the right direction, with the DOS willing to modify its definition of “manufacturing” so ITAR would not embrace basic gunsmithing tasks such as threading a muzzle.

The Gun Collective reports that: “The Directorate of Defense Trade Counsels (DDTC) is working on revising the ITAR regulations which will help the gun industry[.] Gunsmiths having to pay hefty fees, register and comply with ITAR may no longer be a problem if this goes through as planned. Fortunately, we don’t have to wait for Congress to take action, but rather an agency, which appears to be taking initiative to get it done. As always, time will tell, so be sure to keep your eye on the Federal Register….”

While nothing has happened yet, it appears that this administration is working to revise ITAR. For members of the firearms industry, this is a big deal and will be beneficial to all. There is no reason that a gunsmith should be required to register and comply with ITAR to simply thread a muzzle. It will also allow companies to more easily export their products around the world. (Source: The Gun Collective)

The Gun Collective further noted that: “The topic that will be of the most interest to us would be the definition of manufacturing[.] You may remember DDTC’s July 2016 letter, which issued “Guidance” as to who would have to register under ITAR [and suggested] that now gunsmiths would have to register as well. The definition of manufacturing is an important one to define and one that had broad ranging implications as the industries covered under ITAR are wide ranging, everything from the firearms industry to airplanes and missiles. The Guidance stated that ITAR registration was required for gunsmiths who machined or cut firearms, such as the threading of muzzles or muzzle brake installation which required machining. At a hefty $2,250 a year to register, ignoring all of the other things that go along with ITAR, it is easy to see why this would be problematic for most small businesses.”

AECA DDTC Federal export manufacturer registration requirement criminal sanctions Annual fee NRA-ILA

Here is the key language in the DDTC’s “ITAR Registration Requirements – Consolidated Guidance” Ruling of 7/22/2016:

2. Registration Required – Manufacturing: In response to questions from persons engaged in the business of gunsmithing, DDTC has found in specific cases that ITAR registration is required because the following activities meet the ordinary, contemporary, common meaning of “manufacturing” and, therefore, constitute “manufacturing” for ITAR purposes:

a) Use of any special tooling or equipment upgrading in order to improve the capability of assembled or repaired firearms;

b) Modifications to a firearm that change round capacity;

c) The production of firearm parts (including, but not limited to, barrels, stocks, cylinders, breech mechanisms, triggers, silencers, or suppressors);

d) The systemized production of ammunition, including the automated loading or reloading of ammunition;

e) The machining or cutting of firearms, e.g., threading of muzzles or muzzle brake installation requiring machining, that results in an enhanced capability;

f) Rechambering firearms through machining, cutting, or drilling;

g) Chambering, cutting, or threading barrel blanks; and

h) Blueprinting firearms by machining the barrel.

Resources for ITAR Issues:

1. Proposed ITAR Revisions to Definitions of Defense Services and Technical Data LINK
2. DDTC 2016 ITAR Registration Guidance Letter LINK
3. Export Control Reform Act of 2016 LINK

Legal Brief ITAR Episode (August 2016):

Attribution: GunCollective.com and Ammoland.com under Creative Commons license.

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July 29th, 2016

ALERT: Feds Impose ITAR Registration Burdens on Gunsmiths

AECA DDTC Federal export manufacturer registration requirement criminal sanctions Annual fee NRA-ILA

If you are a gunsmith or work on firearms, you need to read this carefully. The Federal Government, acting through the Department of State Directorate of Defense Trade Controls (DDTC), has imposed significant new burdens on gunsmiths by expanding the definition of “manufacturing”. This is a big deal, as the Arms Export Control Act (AECA) and its implementing rules, the International Traffic in Arms Regulations (ITAR), require firearms “manufacturers” to register with DDTC and to pay a registration fee that (for new applicants) is currently $2,250 per year.

READ DDTC’s ITAR Registration Requirements Concerning Gunsmithing Dated 7/22/2016
Official Title: ITAR Registration Requirements — Consolidated Guidance July 22, 2016 — Firearms Manufacturers and Gunsmiths

Previously, most small gunsmithing operations that did not export firearms were NOT subject to AECA/ITAR registration requirements. Now, by virtue of a DDTC “Guidance” ruling issued 7/22/2016, ordinary gunsmiths might be required to register as a manufacturer simply because they thread a muzzle or cut a chamber.

The NRA-ILA states: “DDTC is labeling commercial gunsmiths as ‘manufacturers’ for performing relatively simple work such as threading a barrel or fabricating a small custom part for an older firearm. Under the AECA, ‘manufacturers’ are required to register with DDTC at significant expense or risk onerous criminal penalties.” Read NRA-ILA Full Report.

AECA DDTC Federal export manufacturer registration requirement criminal sanctions Annual fee NRA-ILA

Here is the key language in the DDTC’s “ITAR Registration Requirements – Consolidated Guidance” Ruling of 7/22/2016:

2. Registration Required – Manufacturing: In response to questions from persons engaged in the business of gunsmithing, DDTC has found in specific cases that ITAR registration is required because the following activities meet the ordinary, contemporary, common meaning of “manufacturing” and, therefore, constitute “manufacturing” for ITAR purposes:

a) Use of any special tooling or equipment upgrading in order to improve the capability of assembled or repaired firearms;

b) Modifications to a firearm that change round capacity;

c) The production of firearm parts (including, but not limited to, barrels, stocks, cylinders, breech mechanisms, triggers, silencers, or suppressors);

d) The systemized production of ammunition, including the automated loading or reloading of ammunition;

e) The machining or cutting of firearms, e.g., threading of muzzles or muzzle brake installation requiring machining, that results in an enhanced capability;

f) Rechambering firearms through machining, cutting, or drilling;

g) Chambering, cutting, or threading barrel blanks; and

h) Blueprinting firearms by machining the barrel.

Editor’s Comment: Does this mean that any stock-maker or stock supplier is an ITAR “manufacturer” under part 2(c)? Would installing a scope or accessory rail fall under part 2(a) as “equipment upgrading”? Would fluting a barrel be considered “manufacturing” under part 2(h)?

Impact of New Registration Requirements
As the NRA-ILA (Institute for Legislative Action) reads this, gunsmithing shops (even one-man operations) will now be subject to ITAR regulation though they export nothing: “These requirements apply, even if the business does not, and does not intend to, export any defense article. Moreover, under ITAR, ‘only one occasion of manufacturing … a defense article’ is necessary for a commercial entity to be considered ‘engaged in the business’ and therefore subject to the regime’s requirements.”

As a consequence, these new regulations may drive smaller gunsmithing services out of business: “DDTC’s move appears aimed at expanding the regulatory sweep of the AECA/ITAR and culling many smaller commercial gunsmithing operations that do not have the means to pay the annual registration fee or the sophistication to negotiate DDTC’s confusing maze of bureaucracy. [This is] likely to have a significant chilling effect on activity that would not even be considered regulated.”

Statutory Authority for Registration
The AECA’s statutory requirement for firearms manufacturers to register with DDTC is implemented in Part 122 of the ITAR:

§122.1 Registration requirements.
(a) Any person who engages in the United States in the business of manufacturing or exporting or temporarily importing defense articles, or furnishing defense services, is required to register with the Directorate of Defense Trade Controls under §122.2. For the purpose of this subchapter, engaging in such a business requires only one occasion of manufacturing or exporting or temporarily importing a defense article or furnishing a defense service. A manufacturer who does not engage in exporting must nevertheless register.

Barrel chambering image from Primal Rights, dealer for Desert Tactical Arms.
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