Trump Pushes to Lower Firearms Industry Restrictions

President Obama did two major things to help the firearms industry – one he never meant to do and the other he tried to do but didn't succeed.

The first thing our industry can thank him for is being our #1 firearms salesman. Sales clearly surged during his presidency. The second thing we should be grateful for is his administration's attempt to change the overly burdensome export control regulations on firearms.

As you may already know, exports of firearms, their parts, and ammunition (among other things like technical data and training) are regulated by two different federal agencies.

The U.S. Department of State (State) oversees the export of most firearms and their related parts, ammo, and information: all rifles, all handguns, and “military” shotguns (those with a barrel length less than 18″). The U.S. Department of Commerce (Commerce), on the other hand, oversees the export of “sporting shotguns” (those with a barrel length of at least 18″) and their related parts, ammo, and information.

Besides the complication of at least two agencies to deal with depending on what's in an exporter's shipment, this is a HUGE burden on our industry…even if you never plan to export a firearm. This is partly a problem because each agency is allowed to make its own rules and regulations to enforce the very same laws. State creates and enforces the International traffic in Arms Regulations (ITAR) while Commerce creates and enforces their own Export Administration Regulations (EAR).

Another reason it's a problem is because of the big difference in types of things covered by each agency. ITAR (State) is meant for military-grade equipment – rocket launchers, tanks, military-grade night visions, etc. The EAR (Commerce) is meant for everything else – toilet paper, household goods, sports equipment, etc. As you can imagine just by seeing the types of items that are controlled, the ITAR has stricter rules than the EAR.  Therefore, 22lr revolvers are regulated under the same strict ITAR as rocket launchers.

You probably have two questions so far: 1. How does the Obama administration deserve some credit? and 2. What do all these export laws/regulations have to do with you? Let me explain.

EXPORT CONTROL REFORM

The Obama administration started a program called “Export Control Reform” (ECR) wherein they tried to move large categories of items from State/ITAR control over to Commerce/EAR control. They did this because they recognized the need for the United States to be more competitive internationally. They were trying to increase controls where needed and lessen them where they weren't – as they put it, “taller fences around smaller yards”

Here's an example of how our industry was burdened: Under ITAR, a contract to export firearms for over one million dollars required Congressional approval – this could delay a transaction for months! Our foreign competitors know this and can compete for a foreign contract by promising much faster delivery of product.

The ECR initiative involved a lot of input from our industry and the industries of the other affected categories to be moved. One by one, each category of ITAR controlled items was scheduled to be moved over. The proposed rules to move our industry's category were drafted and ready to be publish in December of 2012. But then, something horrible happened- the Sandy Hook Elementary School shooting. Politics caused the move to be stalled.

The Obama administration then tried to move our industry off of ITAR again three years later in December of 2015. But then something else happened, the San Bernardino shooting. Again, politics caused the rules for our industry to be stalled while the other categories were moved over to enjoy less restrictions.

Now, almost two years since the last attempt, it appears that ECR for our industry is again getting some traction with the Trump administration.

WHY DOES ECR MATTER TO YOU?

First, it will help our country as a whole – less restrictions will make our economy more robust. Second, it will help manufacturer and gunsmith FFLs which will, in turn, make a third benefit to consumers in the form of less expensive firearms.

As you may be aware, the Directorate of Defense Trade Controls (DDTC) released some “guidance on what they consider to be “manufacturing” last year. The DDTC is the part of State that oversees ITAR and the list of items that ITAR controls, the United States Munitions List (USML). Under ITAR, a manufacturer of a “defense article” listed on the USML must register with DDTC and pay a yearly $2,250 fee.

And to make matters worse, the ATF and State are allowed to have different definitions of terms in their own regulations (and they do). For example, the ATF requires that a manufacturer of firearms have at least a Type 7 FFL. However, if you just make parts, like triggers, then no FFL is needed because you aren't a “manufacturer” under ATF's rules. But, as I mentioned above, even parts of guns are controlled by ITAR. Therefore, making triggers would make you a “manufacturer” of a defense article under ITAR and require registration. This obviously led to some confusion in our industry.

Although nothing really changed in the law with the guidance from DDTC last year, they did formally explain that they consider activities that didn't require at least a Type 7 Manufacturer's FFL to still require registration under ITAR. So, gunsmiths who only need a Type 1 FFL, would need to register with ITAR and pay the $2,250 if they chamber a barrel for a rifle.

WHAT DOES ALL THIS MEAN?

If firearms and their parts are removed out from under ITAR and instead placed under EAR, some of the benefits we'll likely see are:

1. Increase competitive advantage internationally
2. No more ITAR registration/$2,250 for gunsmiths and manufacturers of firearms and/or parts
3. Cheaper guns/more availability of services
4. Less restrictions on our industry making it easier to get started with your own FFL

 

Website: RyanCleckner.com

Instagram: @Cleckner

FaceBook: facebook.com/ryan.cleckner/

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