As GunsAmerica previously reported, last month, the State Department via the Directorate of Defense Trade Controls (DDTC) issued a new “guidance” that would ostensibly require machine shops, gun dealers and gunsmiths nationwide to register with ITAR (International Traffic in Arms Regulations) at a cost of $2,250 per year.
In response to that announcement, which many viewed as a backdoor way to put a financial squeeze on 2A businesses, pro-gun members of Congress penned a letter voicing their opposition.
“The vast majority of our constituents engaged in gunsmithing make little to no income from their activities and often do it as a hobby or side business,” reads the Senate version of the letter signed by Sens. Chuck Grassley, James Inhofe, Ted Cruz, John McCain, among 20 others.
“They most certainly do not export firearms. They also do not manufacture firearms in any widely understood sense of the term,” the letter, dated Aug. 29, 2016, continues. “Therefore, it makes no sense for them to be required to pay $2,250 and register under AECA and ITAR.”
As a reminder, ITAR requirements were created to prevent military firearms and firearm technology from being freely exported out of the United States.
In response to questions from persons engaged in the business of gunsmithing, DDTC has found in specific cases that ITAR registration is required because the following activities meet the ordinary, contemporary, common meaning of “manufacturing” and, therefore, constitute “manufacturing” for ITAR purposes:
a) Use of any special tooling or equipment upgrading in order to improve the capability of assembled or repaired firearms;
b) Modifications to a firearm that change round capacity;
c) The production of firearm parts (including, but not limited to, barrels, stocks, cylinders, breech mechanisms, triggers, silencers, or suppressors);
d) The systemized production of ammunition, including the automated loading or reloading of ammunition;
e) The machining or cutting of firearms, e.g., threading of muzzles or muzzle brake installation requiring machining, that results in an enhanced capability;
f) Rechambering firearms through machining, cutting, or drilling;
g) Chambering, cutting, or threading barrel blanks; and
h) Blueprinting firearms by machining the barrel.
The letter goes on to state that the last thing gunsmiths and machinists need “is an edict from the federal government imposing crippling fees and requirements which are wholly unnecessary and nonsensical.”
The new guidance was confusing in that it wasn’t exactly clear who would have to comply with the registration requirement. Language within it seemed to carve out the following exemption, “traditional gunsmithing activities do not constitute manufacturing for ITAR purposes, and therefore, do not require registration.”
However, and as the lawmakers noted in the letter, the guidance also contained contradictory language that seemed to undermine that putative exemption.
“Specifically, as outlined, the activity threshold that necessitates a type 07 FFL (Federal Firearms Licensee-manufacturing) does not match up with the activities listed on page three of the guidance,” stated the lawmakers in the letter.
“That means that firearms dealers who engage in limited gunsmithing – activities that do not require a type 07 FFL – would still need to register with DDTC as manufacturers of a defense article listed on the United States Munitions List (USML),” it continued.
In the conclusion of the letter, the lawmakers requested that the regulatory responsibility of the USML be transferred from the State Department to the Department of Commerce which would effectively render the guidance null and void. No word of yet as to whether the DDTC will relinquish control per the letter (Don’t hold your breath).
In the meantime, those concerned about the new guidance should contact the DDTC. For that information as well as to see the regulations in full, check out the guidelines letter (.pdf). Remember, failure to register under ITAR could result in a penalty of up to 20 years in prison and a fine up to $1 million, depending on the circumstances.
We’ll keep you posted as more news develops on this front. For more context as to what exactly is going on here, check out this helpful video from The Gun Collective: