August 9th, 2016

NSSF Opposes Actions Forcing Gunsmiths to Register under ITAR

DDTC Department of State ITAR Directorate of Defense Trade Controls

On July 22, 2016 the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) issued a 4-page “Guidance” concerning gunsmithing activities. This “Guidance” described the types of tasks and services which would obligate gunsmiths to register as “manufacturers” under the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR). Any “manufacturers” of “defense articles” (which includes firearms and ammunition) must fill out burdensome paperwork every year and pay an exorbitant $2,250 annual registration fee. The “Guidance” stated that completing even one simple smithing task, such as threading a muzzle, will obligate a smith to register as an ITAR “manufacturer”. And this holds true even if the “manufacturer” does not export a single product, or only makes component parts, such as a wood gunstock. READ 7/22/2016 DDTC Guidance.

Clearly this “Guidance” threatens the traditional activities and livelihoods of normal, non-exporting gunsmiths around the country. The potential penalties for failure to register are draconian — huge fines and up to 20 years in prison.

Recognizing that the latest DDTC “Guidance” represents a severe threat to the firearms industry, the National Shooting Sports Foundation (NSSF) is leading an effort to get the DDTC to change its policies. The NSSF also urges concerned citizens to contact their elected representatives in Washington.

NSSF Statement Regarding DDTC’s Firearms “Guidance” on ITAR Registration

DDTC asserts that the guidance merely restates existing DDTC policy and interpretation of the AECA and ITAR manufacturer registration requirement.

Unfortunately, DDTC’s “guidance” has created considerable and understandable confusion and concern among gunsmiths and gun owners. The National Shooting Sports Foundation (NSSF) is reviewing the guidance and will send a letter of protest to DDTC expressing our strong opposition to the new “guidance,” the scope of which clearly exceeds their statutory authority. The term “manufacture” as used in the AECA and ITAR is its ordinary dictionary definition. Clearly, many of the activities DDTC claims require registration constitutes gun smithing and is not manufacturing under any reasonable dictionary definition of the term. DDTC’s position is similar to claiming an auto mechanic who fixes your car is a car manufacturer.

NSSF has been working diligently for many years to eliminate, or at least significantly lower, the excessive and burdensome registration fee especially for non-exporting manufacturers and non-essential component parts manufacturers. Simply put, forcing small manufacturer to pay $2,250 annually to register when they are not utilizing the DDTC export licensing system to export products is an unfair and onerous regulatory burden. This is even more outrageous when one considers that DDTC is sitting on at least $140 million dollars of previously paid registration fees collected over many years from exporters from many industries including ours.

Additionally, we have been working with allies in Congress to pressure the Obama administration to complete the Export Control Reform (ECR) initiative, which would (with limited exceptions) do away with the AECA and ITAR manufacturer registration requirement and onerous fee for commercial and sporting firearms.

To date, the Obama Administration has refused to publish and implement the regulatory changes necessary to transfer [the] export licensing of commercial and sporting firearms and ammunition products to the Department of Commerce from the Department of State. Read more on Export Control Reform. Yet, the proposed rules have been drafted and ready for publication since December 2012. Inaction persists despite congressional testimony and letters to members of the U.S. House and the Senate that [the Administration] would publish the rules.

Why has the Obama administration refused to move ECR forward for our industry? It is really very simple. The Obama Administration is singling out our industry for different treatment under the ECR because of its gun control politics. It is time to force Congress to step in and stop the Obama Administration’s gun control agenda from stopping this needed reform.

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.

How Can Gun Owners and Gunsmiths Help?

Call your U.S. Representative at 202-225-3121 and U.S. Senators at 202-224-3121 urge him or her to support Rep. Collin Peterson’s (D-Minn.) Resolution, (H. Res. 829) that demands the Obama administration complete the ECR and publish the proposed rules to transfer the licensing of commercial and sporting firearms and ammunition products to the Department of Commerce (which does not require registration or payment of a fee).

Tell your U.S. Representative and Senators to force DDTC to stop imposing excessive and onerous registration fees on small businesses that do not export products. Tell them to support language in the Fiscal Year 2017 State and Foreign Operations Appropriations bill that will reduce the registration fee to a nominal amount for all non-exporting manufacturers and component part manufacturers.

Tell your U.S. Representative and Senators to stop the Department of State and DDTC from exceeding their statutory authority. The DDTC should have no power to control non-export activities. Threading a barrel or fitting a stock should not oblige a gunsmith to register with the Department of State and pay a fee of $2,250 per year.

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