NFATCA Report: V22N9

By Jeffrey Folloder

ITAR Compliance a Nightmare for Firearms Manufacturers

One of the most intense NFA discussions over the past many years has surrounded the topic of the State Department implementation of the International Trafficking in Arms Regulations (ITAR). This bit of legalese has been the subject of scorn and hassle for many. To put a fine point on it: State Department required each and every licensed manufacturer of firearms or ammunition, regardless of whether they exported or not, to register and pay at least $2,250 per year. Many manufacturers simply ignored the requirement, though we have diligently warned of the requirement and the penalties for willfully avoiding it.

Then, the State Department started stepping up their enforcement efforts. When manufacturers were brought to heel, they were often politely asked to provide a list of all the manufacturers that they had done business with. A shopping list for the State Department, as it were. It was pointed out that a complete list of every FFL, in every class, was published on the ATF website every month for anyone to download and read. Industry Operations Investigators (IOIs) for ATF began inquiring during site inspections regarding whether the potential or existing licensees had registered with State Department. Many had not and were politely and professionally advised of the requirement. A bit of concern spread like a virus throughout the FFL world. Many licensees that had flown under the radar were now stepping out in to the sunlight.

Those licensees learned that registration for ITAR compliance was anything but easy. Assemble a raft of documents establishing that your enterprise, in fact, existed. Download an instruction sheet on how to submit your payment from a difficult-to-navigate State Department website. Applicants must note that credit cards, check and money orders are not accepted as valid forms of payment of the onerous registration fee. The only methods accepted are automated clearing house (ACH) and something called Fedwire. Applicants will spend hours and sometimes days asking what Fedwire is. Eventually they will learn that Fedwire is just a government name for a normal wire transfer. Go to the bank...

This article first appeared in Small Arms Review V22N9 (November 2018)
and was posted online on September 21, 2018


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