NFACTA Report: V20N10
By Jeffrey W. Folloder
Registering with the State Department and paying the annual registration fees as a manufacturer under the International Traffic in Arms Regulations (ITAR) has always been a subject of great contention in the NFA community. Unfortunately, it has often been difficult to obtain confirmation of exactly who has to pay, under what circumstances, and who, if anyone, is exempt from registration and payment. Internet “experts” have offered opinions as to just what to do and following some of that advice has resulted in rather unpleasant outcomes.
The NFATCA has always advised its members and the NFA community to seek the advice of counsel if there is any doubt as to whether one must register and pay. Fortunately, the State Department has finally made it perfectly clear exactly who must register and pay and who is not required to. State published an advisory on July 22, 2016 that can be found here: www.nfatca.org/pubs/ITAR_State_Rules.pdf
The important highlights of the letter:
“ITAR registration is required of persons who engage in the business of manufacturing defense articles. Persons who do not actually manufacture ITAR-controlled firearms (including by engaging in the activities described below, which DDTC has found in specific cases to constitute manufacturing) need not register with DDTC – even if they have an FFL from ATF. As indicated above, the requirements for obtaining FFLs under the GCA are separate and distinct from the requirement under the AECA and ITAR to register with DDTC.
1. Registration not Required – Not Manufacturing: In response to questions from persons engaged in the business of gunsmithing, DDTC has found in specific cases that ITAR registration is not required because the following activities do not meet the ordinary, contemporary, common meaning of “manufacturing” that DDTC employs in implementing the ITAR and, therefore, do not constitute “manufacturing” for ITAR purposes:
a) Occasional assembly of firearm parts and kits that do not require cutting, drilling, or machining;
b) Firearm repairs involving one-for-one drop-in replacement parts that do not require any cutting, drilling, or machining for installation;
c) Repairs involving replacement parts that do not improve the accuracy, caliber, or...
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