President Obama has just signed a new executive order that will essentially put a majority of small gunsmiths and niche gun parts makers out of business. Essentially, the new regulations mean that small gunsmiths who fabricate or modify parts of any kind could be labeled as manufacturers under current ITAR regulations.….via the NRA:
On Friday, July 22, just as members of his party were gathering in Philadelphia to coronate Hillary Clinton as their presidential nominee, the Obama Administration once again released a sweeping gun control measure by executive fiat. This time the bad news came via the U.S. State Department’s Directorate of Defense Trade Controls (DDTC), which is primarily responsible for administering the Arms Export Control Act (AECA) and its implementing rules, the International Traffic in Arms Regulations (ITAR). The upshot is that DDTC is labeling commercial gunsmiths as “manufacturers” for performing relatively simple work such as threading a barrel or fabricating a small custom part for an older firearm. Under the AECA, “manufactures” are required to register with DDTC at significant expense or risk onerous criminal penalties.
As with prior executive actions on guns, the administration released its dictate suddenly and without advance warning to or prior input from affected businesses, completely bypassing the normal formalities associated with a significant rulemaking. The guidance is also likely to result in more confusion than clarity and may significantly chill heretofore legal conduct associated with gunsmithing.
By way of background, the AECA and ITAR concern rules by which military materiel is exported from, and imported to, the United States. The so-called “defense articles” governed by the AECA/ITAR are compiled in what is known as the U.S. Munitions List and include some, but not all, firearms and ammunition, as well as their parts and components. Thus, for purposes of the regime, a spring or floorplate from the magazine of a controlled firearm is subject to the same regulatory framework as the firearm itself.
The AECA/ITAR require anybody who engages in the business of “manufacturing” a defense article to register with DDTC and pay a registration fee that for new applicants is currently $2,250 per year. These requirements apply, even if the business does not, and does not intend to, export any defense article. Moreover, under ITAR, “only one occasion of manufacturing … a defense article” is necessary for a commercial entity to be considered “engaged in the business” and therefore subject to the regime’s requirements.
Adding to the confusion, the Gun Control Act of 1968 and its amendments (GCA) also regulate firearm manufacturing, importing, and exporting. Both of the laws also use the same or similar terms but apply them in different ways. Thus, what triggers the legal requirement for an entity to be registered as a “manufacturer” under the AECA/ITAR may or may not also bring that entity within the scope of the GCA, and vice versa.
DDTC’s new “guidance” only makes this situation worse by coming up with a confusing and counterintuitive list of activities that it considers “gunsmithing” versus “manufacturing” (despite the fact that it insists it relies on the “ordinary, contemporary, common meaning” of those terms).