Some FFL 07 questions

[ke6guj]

I went to wikipedia and foun this:

International Traffic in Arms Regulations (ITAR) is a set of United States government regulations that control the export and import of defense-related articles and services on the United States Munitions List (USML).[1] These regulations implement the provisions of the Arms Export Control Act (AECA), and are described in Title 22 (Foreign Relations), Chapter I (Department of State), Subchapter M of the Code of Federal Regulations. The Department of State interprets and enforces ITAR. Its goal is to safeguard U.S. national security and further U.S. foreign policy objectives.[2]

http://en.wikipedia.org/wiki/ITAR

it says that ITAR is the supporting regulations for the Arms Export Control Act.

So, if we look at the ITAR requlation that says that manufacturers must register, even if they don't export, we see the following, note the authority listed.

PART 122-REGISTRATION OF MANUFACTURERS AND EXPORTERS

Authority: Secs. 2 and 38, Pub. L. 90-629, 90 Stat. 744 (22 U.S.C. 2752, 2778

http://www.fas.org/spp/starwars/offdocs/itar/p122.htm#ITAR

so then we go to the USC that covers the Arms Export Control Act and we find the following:

Any person who willfully violates any provision of this section or section 2779 of this title, or any rule or regulation issued under either section, or who willfully, in a registration or license application or required report, makes any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading, shall upon conviction be fined for each violation not more than $1,000,000 or imprisoned not more than ten years, or both.

http://www.law.cornell.edu/uscode/22/2778.html

[ke6guj]

Jason Wong, from the Firearms Law Group, posted the following on subguns.com that basically shows the same thing:

ITAR is the regulatory requirement. The Arms Export Control Act is the law.

There is a requirement to register under ITAR for all manufacturing. Activity is not limited to exporting, nor is manufacturing limited to what can be done under a Type 7 FFL.

Ultimately, it's your choice whether to register or not. DDTC does occasionally check to see whether parties are registered.

22 CFR 127 (1)(a)(5):

It is a violation

(5) To engage in the United States in the business of either manufacturing or exporting defense article or furnishing defense services without complying with the registration requirements. For the purposes of this subchapter, engaging in the business of manufacturing or exporting defense articles or furnishing defense services requires only one occasion of manufacturing or exporting a defense article or furnishing a defense service.

22 CFR 127(3)(a):

Penalties for violations.
Any person who willfully: violates any provision of section 38 or section 39 of the Arms Export Control Act (22 U.S.C. 2778 and 2779), or any undertaking specifically required by part 124 of this subchapter.

Referring to the requirements at 22 USC 2778:

22 USC 2778(b)(1)(A)(i):

Registration and licensing requirements for manufacturers, exporters, or importers of designated defense articles and defense services:

As prescribed in regulations issued under this section, every person (other than an officer or employee of the United States Government acting in an official capacity) who engages in the business of manufacturing, exporting, or importing any defense articles or defense services designated by the President under subsection (a)(1) of this section shall register with the United States Government agency charged with the administration of this section, and shall pay a registration fee which shall be prescribed by such regulations. Such regulations shall prohibit the return to the United States for sale in the United States (other than for the Armed Forces of the United States and its allies or for any State or local law enforcement agency) of any military firearms or ammunition of United States manufacture furnished to foreign governments by the United States under this chapter or any other foreign assistance or sales program of the United States, whether or not enhanced in value or improved in condition in a foreign country. This prohibition shall not extend to similar firearms that have been so substantially transformed as to become, in effect, articles of foreign manufacture.

http://www.subguns.com/boards/mgmsgarchive.cgi?read=733646

http://firearmslawgroup.com/publications/small-arms-review/80-itar-what-is-it-and-why-do-i-need-to-pay?format=pdf

[Table Rock Arms]

Since this thread is now discussing ITAR I will jump back in whith what I know (or don't know). I spoke with vanderjack today and his take is that you do not have to register. I don't know if he is right or not. I will say that he has spent some time looking into all this and he would agree with everyone here that regardless of who is right, there is entirely too much confusion amongst the firearms community and the ATF and everyone else involved with all of this.

Here is what I have gathered about ITAR. You do have to register if you don't export. And like I said, I may be wrong about that. However you can file for a Commodities Jurisdiction Ruling that would exempt you. What you would do is submit all the info about what you make and there are a few things regarding ht especific use that qualify those items for an exemption weather they are on the munitions list or not. You would have to do this for every item you manufacture. So you would have to file one for AR's and one for AK's, and one for the 9mm cartridge and one for the .223 cartridge and so on. I don't know a lot about it, but I do know that is has been done by FFL's in California and I know that Freakshow10mm who has posted here before claims to have done it. I am looking into this now. I will post here if I ever find anything out.

Ryan

[vanderjack]

Every single penalty that ITAR can impose is directly linked to exporting.
If you do not export the rule has no teeth.
Reread all the penalty's that ITAR can impose, not one has a penalty if you don't export.
NOT ONE.
There a lot more lawyers than Jason wong that will say you do n ot have to register.
Or give them $2250.00 per year , I don't care anymore.
I have a reputable law firm just as qualified as jason wong and they have stated emphatically you don't have to register if you don't sell to someone who exports or export yourself.

jason wong or anyone else has never posted the statute on what the penalty is for not registering if you are not exporting.
I have never seen a bunch of people so eager to give away money.

With all the thousands of businesses that are supposedly mandated to register you'd think we would hear of just one that was busted for not registering huh?
It's all smoke and mirrors.
When I asked jason wong himself this question some months back he seemed to get a little annoyed when I pressed for some direct answers on what the statutes are and penalty's for just not registering.

What are the motives of those who say we have to register?
I'm going to make this formal, I am going to retain the Law firm in NYC to give me a written legal opinion on why we don't have to register and then I'm going to settle this.
This was no fly by night Law firm, they know what they are doing and have been doing export & customs work for a long time.

Didn't it seem strange to anyone that if you are an 07 ffl and you don't export why in the hell would ITAR have anything to say about you or your business?
Why is the registration annual and $2250.00?

[Table Rock Arms]

I also know this about ITAR. when I did my initial interview for my FFL my examiner told me that there are over 200 manufacturers in Oregon and he only knows of 8 of them that pay ITAR.

[vanderjack]

From that sub guns thread:

i have read this - it is one of the very first things i read reguarding ITAR

http://www.firearmslawgroup.com/publications/small-arms-review/80-itar-what-is-it-and-why-do-i-need-to-pay

would you please explain section 127.3 page 548 to me, and show me where im reading it wrong??
It appears like penalties for violations only occur if you actually export something.

thanks for responding

BINGO!
We have a winner!

[ke6guj]

John, I read 22 USC 2778 as the following:

Any person who willfully violates... any rule or regulation issued under either section... shall upon conviction be fined for each violation not more than $1,000,000 or imprisoned not more than ten years, or both.

That would be pretty self explanatory that it is a felony to violate the regulation that says that all manufacturers must register, even if they don't actually export.

Now, if you want to say that 127.3 doesn't mention "failed to register" as one of its triggers, that may be true. If so, then the criminal penalties mentioned in 22 USC 2778 might not apply.

But 127.10 says that they cann impose a civil penalty for each violation of any regulation that covers the AECA.

The Assistant Secretary of State for Political-Military Affairs is authorized to impose a civil penalty in an amount not to exceed that authorized by 22 U.S.C. 2778, 2779a and 2780 for each violation of 22 U.S.C. 2778, 2779a and 2780, or any regulation, order, license or approval issued thereunder. This civil penalty may be either in addition to, or in lieu of, any other liability or penalty which may be imposed.
(b) The Directorate of Defense Trade Controls may make:

(1) The payment of a civil penalty under this section or

(2) The completion of any administrative action pursuant to this part 127 or 128 of this subchapter a prior condition for the issuance, restoration, or continuing validity of any export license or other approval.

122.1 is a requlation issued under 22 USC 2778. 122.1 requires you to register, even if you don't export. Failing to register would be a violation that would fall under 127.10.

I'm not a lawyer, but that seems pretty clear to me.

I personally don't care if an 06FFL or 07FFL registers or not. I would just like them to have the knowledge that they might need to register with ITAR. If the law is unclear, then seeking the advise of a lawyer would be a good idea.

[EBR Works]

Patiently waiting. I'm anxious to see what John has for us next....

[vanderjack]

Patiently waiting. I'm anxious to see what John has for us next....

I am not saying anything else until I get the legal opinion that I requested today from the Law firm in NYC.
On a side note I talked with another firm and they are of the same opinion as the NYC firm.
That non-registration with no export has no consequence.
I would tend to believe that the 8th Amendment would be a great defense to a million dollar fine for not registering with some blood sucking govt agency who in turn offers not one bit of service for that $2250 per year.

Lets face it, I would be as guilty of being a sheep like some in this thread if this was $250.00 per year.

And to top it off we have to register in the new year anyway because we will be exporting our line to SWAT units all over the globe.
So for us this is a moot point.
We get caught up in the state dept BS greed anyway.
The good thing is we get it right back as an income tax deduction.

[vanderjack]

Amendment VIII (1791)
Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.

[EBR Works]

I had a conversation this morning with Bob here:

http://www.rkffl.com/

He seems very knowledgeable of ATF and DOJ regs.

I outlined the example given in my original post and discussion here of markings requirements if the complete firearm is assembled by an 07. He stated that based on his understanding of the regs, no additional markings would need to be added to the firearm.

It seems that everyone disagrees on this....

I'll bring up the ITAR discussion with him some other time..
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[ke6guj]

new ATF ruling announcement emailed to be today.

WASHINGTON — The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) today announced a ruling that will affect any person licensed as a dealer-gunsmith performing certain processing or finishing on firearms owned and marked by a federally licensed firearms manufacturer. The ruling will also affect licensed manufacturers and licensed importers who have contracts with specialized gunsmiths to perform a variety of processes involved in producing firearms.

The ruling holds that licensed firearms dealer-gunsmiths are not engaged in a manufacturing business, and are not required to hold a manufacturers license, under certain specified conditions. The ruling was issued to address modern firearms manufacturing processes, which often involve a number of contractors other than the manufacturer whose name is marked on the firearm.

Under the ruling, licensed dealers may perform manufacturing services if (1) the firearms are not owned by the licensed dealer-gunsmith; (2) the licensed dealer-gunsmith returns the firearms to the licensed manufacturer or licensed importer upon completion of the manufacturing process and does not sell or distribute the firearms to any other person; and (3) the firearms were properly identified and marked by the importer or manufacturer in accordance with the law and regulations.

ATF Ruling 2010-10 clarifies concerns and addresses questions about activities such as bluing, anodizing, powder-coating, plating, polishing, heat and chemical treating that have caused confusion over activities requiring a federal firearms manufacturers license, firearms marking requirements, and firearms record keeping requirements.

For additional information about ATF’s programs, please visit www.atf.gov.

http://www.atf.gov/regulations-rulings/rulings/atf-rulings/atf-ruling-2010-10.htm

[EBR Works]

Thanks for that. It still does not address the question of whether re-engraving is required by an 07 who assembles a complete firearm using a receiver that is already marked with the original manufacturer's info.