USA – -(Ammoland.com)- Welcome back to The Legal Brief, the show where we CRUSH the various legal myths and misinformation surrounding various areas of the gun world. I'm your host Adam Kraut and today we are talking about how gunsmiths might not have to pay huge fees to the government.
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Guys, I know you really want to hear about the SHARE Act and we'll dig into that next week, so be sure to subscribe to see that video. Now, today's topic… Earlier in September, the Defense Trade Advisory Group or DTAG held a public meeting with the Department of State where a variety of topics were to be discussed. DTAG is comprised of a number of members of the defense industry, including names you probably recognize like Northrop Grumman, Lockheed Martin and the Boeing Company. It also has members from the firearms industry such as Knights Armament, Vista Outdoors, the NSSF, and the F.A.I.R. Trade Group, and no, we are not talking about coffee. DTAG advises the Department on policies, regulations, and technical issues affecting defense trade.
The topics to be discussed included: (1) one-Form electronic filing and recommendations for making electronic filing more cost-effective and efficient for industry and no we are not talking about ATF eForms; (2) identifying key areas of concern with the proposed definition for defense services which were previously published in the federal register; (3) provide feedback to accurately and effectively define “manufacturing” and distinguish it from other related activities like assembly, integration, installment and various services; (4) discuss the current rules regarding the release of technical data to foreign dual-nationals and identify alternative options which sufficiently facilitates risk assessment and risk mitigation and (5) provide an assessment, including a cost-benefit analysis, of DDTC standardizing the expiration date for all new agreements to a fixed 10 year period from the date of initial approval.
As firearms owners, the topic that will be of the most interest to us would be the definition of manufacturing as well as some of the comments made by DDTC at the meeting. You may remember DDTC's July 2016 letter, which issued guidance to who would have to register under ITAR and the big stir about the implication that now gunsmiths would have to register as well. For those of you unfamiliar with ITAR, click the link in the description to see the video we did on that.
The definition of manufacturing is an important one to define and one that had broad ranging implications as the industries covered under ITAR are wide ranging, everything from the firearms industry to airplanes and missiles. The guidance stated that ITAR registration was required for gunsmiths who machined or cut firearms, such as the threading of muzzles or muzzle brake installation which required machining. At a hefty $2,250 a year to register, ignoring all of the other things that go along with ITAR, it is easy to see why this would be problematic for most small businesses.
However, DDTC did bring some good news to the meeting. While the bill that was previously introduced that would move a variety of items that are currently on the United States Munitions List or USML to the Department of Commerce did not pass, it appears DDTC is taking steps internally to alleviate the problem.
Brian Nilsson, the Deputy Assistant Secretary for Defense Trade Controls reported that there has been movement in the rewriting of Categories I, II and III of the USML. Those categories include Firearms, Close Assault Weapons and Combat Shotguns, Guns and Armament, and Ammunition or Ordnance. It appears that they hope to publish the proposed changes within the next year. However, there is a bit of a hold up. In order to successfully move them off the USML, the Department of Commerce needs to publish a rule accepting them into the Export Administration Regulations or EAR. The issue comes from the executive order issued by President Trump which requires an agency to identify two regulations to repeal for each one it wishes to implement. Since Department of Commerce does not fall under the foreign affairs exemption, the timeline for this to become a reality may be slowed down, while they identify two regulations to remove.
While nothing has happened yet, it appears that this administration is working to revise ITAR. For members of the firearms industry, this is a big deal and will be beneficial to all. There is no reason that a gunsmith should be required to register and comply with ITAR to simply thread a muzzle. It will also allow companies to more easily export their products around the world.
So to recap, DDTC is working on revising the ITAR regulations which will help the gun industry and a number of other areas as well. Gunsmiths having to pay hefty fees, register and comply with ITAR may no longer be a problem if this goes through as planned. Fortunately, we don't have to wait for Congress to take action, but rather an agency, which appears to be taking initiative to get it done. As always, time will tell, so be sure to keep your eye on the Federal Register to voice your support for the proposed changes.
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And as always thanks for watching!
Links for this episode:
- DTAG Members: http://pmddtc.state.gov/DTAG/documents/Membership2016-18.pdf
- Federal Register – Proposed ITAR Revisions to Definitions of Defense Services and Technical Data: https://www.federalregister.gov/documents/2015/06/03/2015-12844/international-traffic-in-arms-revisions-to-definitions-of-defense-services-technical-data-and-public
- DDTC 2016 Guidance Letter: http://pmddtc.state.gov/compliance/Applicability%20of%20the%20ITAR%20Registration%20Requirement%20to%20Firearms%20Manufacturers%20(Publish).pdf
- National Law Review: https://www.natlawreview.com/article/united-states-munitions-list-when-guns-come-itar
- Export Control Reform Act of 2016: https://www.congress.gov/bill/114th-congress/senate-bill/3405/text
- Legal Brief ITAR Episode: https://www.youtube.com/watch?v=GTAHEYFu8mY
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