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Industry News
By Robert M. Hausman

A wealth of statistical data was presented at the ATF and the Imports Community conference held at the Fairmont Hotel in Washington, D.C. August 6 -7, 2007

Held annually, this event brings together licensed importers and their main regulator, the Bureau of Alcohol, Tobacco, Firearms & Explosives, along with other involved government agencies, such as the Department of State, for two days of intensive briefings and discussion on the latest regulatory initiatives.

This year, much of the presentations were on statistics, and one of the most relevant presentations was that of Ken Houchens, Chief of the ATF National Firearms Act Branch. The NFA Branch has been actively working to reduce its form processing times and Houchens proudly detailed the progress made.

(The 2007 processing form results are through 6/29/07)


Average processing time for all NFA forms from 2003 to 2007:
2003: 29.07 Days
2004: 31.82 Days
2005: 25.42 Days
2006: 9.00 Days
2007: 5.11 Days


Average processing time for Form 1s from 2003 to 2007:
2003: 64.81 Days
2004: 98.81 Days
2005: 74.90 Days
2006: 32.95 Days
2007: 20.92 Days


Average processing time for Form 2s from 2003 to 2007:
2003: 17.40 Days
2004: 24.44 Days
2005: 16.46 Days
2006: 7.14 Days
2007: 2.61 Days


Average processing time for Form 3s from 2003 to 2007:
2003: 29.23 Days
2004: 30.41 Days
2005: 22.71 Days
2006: 4.72 Days
2007: 3.47 Days


Average processing time for Form 4s from 2003 to 2007:
2003: 83.98 Days
2004: 81.63 Days
2005: 71.27 Days
2006: 32.00 Days
2007: 20.79 Days


Average processing time for Form 5s from 2003 to 2007:
2003: 24.45 Days
2004: 29.81 Days
2005: 16.98 Days
2006: 3.95 Days
2007 3.06 Days


5320.20s from 2003 to 2007:
2003: 26.47 Days
2004: 24.30 Days
2005: 20.92 Days
2006: 7.10 Days
2007: 4.17 Days


Average processing time for Form 9s from 2003 to 2007:
2003: 8.26 Days
2004: 7.53 Days
2005: 3.98 Days
2006: 3.39 Days
2007: 2.24 Days


Average processing time for Form 10s from 2003 to 2007:
2003: 55.06 Days
2004: 34.31 Days
2005: 47.69 Days
2006: 10.57 Days
2007: 2.08 Days


June 2006: 5,314
July 2006: 4,546
Aug 2006: 5,710
Sept 2006: 5,021
Oct 2006: 4,854
Nov 2006: 5,081
Dec 2006: 4,033
Jan 2007: 5,811
Feb 2007: 4,953
Mar 2007: 7,208
Apr 2007: 6,440
May 2007: 6,327
June 2007: 5,468


2000: 39,421
2001: 41,152
2002: 39,454
2003: 42,739
2004: 42,429
2005: 45,647
2006: 59,418


2000: 92,171
2001: 91,646
2002: 127,423
2003: 121,113
2004: 113,065
2005: 120,151
2006: 142,603


1990: 439,339
1991: 477,020
1992: 538,875
1993: 613,079
1994: 678,077
1995: 756,260
1996: 823,459
1997: 905,647
1998: 1,016,863
1999: 1,148,984
2000: 1,271,568
2001: 1,419,220
2002: 1,523,855
2003: 1,652,198
2004: 1,736,654
2005: 1,785,348
2006: 1,943,705


Total revenue collection for FES Division ending FY 06 is $9,024,031.
SOT collection: $1,807,440 - 20%
NFA collection: $3,792,023 - 42%
Total SOT/NFA: $5,599,463 - 62%
F & E licensing: $3,262,468 - 36%
Imports collection: $162,100 - 2%


1998: 2,261
1999: 2,291
2000: 2,383
2001: 2,511
2002: 2,561
2003: 2,717
2004: 2,814
2005: 2,849
2006: 2,951
2007: 3,057
(3,311 SOT renewals were mailed out for tax year beginning 7/1/2007)


NSOT: P. O. Box 403269, Atlanta, GA 30384-3269
Forms 1 & 4: P. O. Box 530298, Atlanta, GA 30353-0298


State Dept. Presentation

Michael Ayoub, senior foreign affairs officer, Bureau of Political Military Affairs, State Dept., gave a background presentationon the U.S. Dept. of State.

The Dept. of State administers the Foreign Military Sales and Assistance Programs. Foreign governments are required to obtain the approval of the U.S. President prior to any retransfer of defense articles obtained from the U.S. government.

State’s authority derives from Title 22, Chapter 38 section 2752 of the Arms Export Control Act wherein the President, in Executive Order 11958, delegates the authority to promulgate regulation in respect to import and export of defense articles and services to the Secretary of State. Thus, the authority to approve retransfers is delegated to State and its Directorate of Defense Trade Control has the authority to approve temporary imports. ATF consults with State on the importation of U.S.-origin defense articles to ensure consistency of transfers with regards to U.S. foreign policy.

As a precondition to the transfer of defense articles on a grant basis, the Foreign Assistance Act requires that recipients return all net proceeds from their sale or disposal to the U.S. government. State may waive the return of the net proceeds (the net proceeds is that remaining after subtracting a reasonable amount of cost associated with administration, sales and disposal) in cases dealing with grant equipment delivered prior to 1985. There is no waiver for items delivered after 1985.

Ayoub emphasized that, “a transfer is a transfer is a transfer” in detailing the provisions of Section 3 (a)(2) of the Arms Export Control Act which provide, “No defense articles or defense service shall be sold by the United State government.. unless - the country shall have agreed not to transfer title to, or possession of, any defense article... to anyone not an officer, employee, or agent of that country... and not to use or permit the use of such article or related training or defense service for purposes other than those for which furnished unless the consent of the President has first been obtained.” All retransfer requests must be initiated by the divesting country, preferably through the Ministry of Defense to the U.S. Office of Defense Cooperation or the foreign ministry to the U.S. Embassy.

Process

A third party transfer begins within the divesting country. The Dept. of State will request end use assurances from the recipient of the articles. State will give the requesting country authority to transfer after applying U.S. foreign policy (regarding net proceeds rules, ensuring there are no sanctions, etc.). However, a previously authorized third party transfer is not binding on the divesting country (they can change their mind). The importer must obtain ATF Form 6 import license for a permanent import.

There is still a presumption of denial policy for significant military equipment as defined in the International Traffic in Arms Regulations (ITAR) to private entities in all cases except with Curio and Relic firearms. There are limited exceptions if the import is in support of an awarded U.S. government contract or if it is demilitarized for use in a static museum display. End use assurances are still required.

State follows ATF definitions of Curios and Relics and ATF maintains the sole authority to approve the import of C&R arms. State’s approval is only authority for foreign governments to retransfer.

Possible Policy Change

A possible State Dept. policy change governing the retransfer of C&R firearms is that cases will be adjudicated on a case-by-case basis with a view to approve. The proposed new policy would cover whole firearms specifically but not parts/components. The sense is if State approves an end item, State would also approve the retransfer of parts for the same if ATF regulations support the importation of those specific parts. Ammunition for C&Rs is not part of the policy change and State will not approve C&R retransfer requests. State supports the U.S. Army’s initiative for reclamation of all grant provided material.

Finally, Ayoub advised industry to do its homework. Research the history of articles you wish to import, including their origin, identification numbers and history of ownership. Without sufficient evidence to the contrary, State presumes all undocumented articles to be of U.S. Grant origin. If the article is for a bona fide museum, supporting documentation is needed as are end use assurances.

For more information, go to: www.state.gov/t/pm/sat.

Removing MG from NFA

Richard Vasquez, assistant chief, ATF Firearms Technology Branch, reviewed the procedures for removing a machine gun from the provisions of the National Firearms Act. The minimum acceptable destruction standards that ATF will accept are: to completely sever the receiver in at least three critical locations, that ATF specifies by model, with an oxy/acetylene torch, that has a cutting tip capable of removing 1/4-inch of metal per cut. A machine gun must be destroyed to the point that it cannot be readily restored.

Importers can request an alternate method of destruction. To do so, send in a photo or drawing of the alternate method. The Firearms Technology Branch will evaluate and either accept or recommend additional destruction. When the importer receives this determination, to get final approval a physical sample must be submitted to ATF for final determination. When filing the Form 6 to import, it is advised to enclose a copy of this final determination approval.

In Brief

The following points were noted during the conference: ATF has over 8,000 firearms in its reference library. There are presently about 108,000 FFL licensees. ATF now has budgeted funds available to fix the problems with sending attachments when filing an e-form 6. John Spencer started in October, 2007 as the new Chief of the Firearms Technology Branch replacing Sterling Nixon who has been reassigned. ATF’s building in West Virginia is being expanded and all ATF services divisions are expected to be housed within this one building by August of 2008.

The Federal Licensing Center in Atlanta is due to move in the next several years to Martinsburg, W. Virginia. It presently has positions for 40 license examiners but only 30 positions are filled. Construction on an annex to house the FFLC was expected to begin in the fall of 2007 in Martinsburg. The FFLC (presently located in Atlanta) recently offered a two day tour of the Martinsburg facility but only 6 staffers opted to participate, indicating a lack of interest on their part in relocating. ATF expects a great amount of staff turnover once the move is made - an even greater turnover than occurred in the Imports/NFA branch moves. Branch Chief Patricia Power plans to relocate and keep her position.

Imports Branch Statistics

Kevin L. Boydston Branch Chief, ATF Firearms & Explosives Imports Branch presented the following statistics:

ATF Form 6 Processing Times:

Fiscal Year:
0/10 Day 11/30 Days 31/45 Days 45+ Days
2004: 18.6% 33.0% 26.4% 22.0%
2005: 8.6% 32.9% 31.9% 26.7%
2006: 14.65% 39.4% 23.8% 26.7%
2007(to August) 37% 48.0% 7% 8%


Average Processing Time
ATF Form 6 Parts I & II (Days)

FY 2004: 40+ days
FY 2005: 60+ days
FY 2006: 30+ days
FY 2007: 30 days (FY 2007 represents first three quarters)

During the first three quarters of fiscal 2007 ATF received 7,973 Import permit Form 6 applications. Of these, 6,169 were commercial, 801 were from the military, 412 were from dealers, 462 were from nonresident aliens and 129 were not specified in the ATF database.

ATF Form 6 Parts I & II

During the first three quarters of fiscal 2007, ATF closed 7,307 Form 6 applications.

Number of days to closure:
1-10 days: 2,714 applications
11-30 days: 3,528 applications
31-45 days: 479 applications
45+ days: 586 applications
To be continued next issue...

The author publishes two of the small arms industry’s most widely read trade newsletters. The International Firearms Trade covers the world firearms scene, and The New Firearms Business covers the domestic market. Visit www.FirearmsGroup.com. He may be reached at: FirearmsB@aol.com.

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