The BATFE recently published an open letter to Chief Law Enforcement Officers (CLEOs) regarding the January 41F ruling (fmr 41P) which makes changes to the way in which NFA applications are handled for legal entities and individuals.
In part, the letter specifies “that a copy of all applications to make or transfer a firearm, and the responsible person questionnaire, if applicable, be forwarded to the [CLEO] of the locality in which the applicant, transferee or responsible person is located (“CLEO notification”)” and that the ruling “eliminates the requirement that an applicant obtain a certification signed by the CLEO before the transfer or making of an NFA firearm may be approved.“
The letter goes on to explain that there is no action required by the CLEO upon receipt (or lack thereof) of the paperwork – to include even confirming receipt of the documents. Further, the letter says that it is up to each CLEO to determine how they dispose of or retain (and whether or not they do either).
Of immediate concern are several potential issues regarding this lackadaisical hands-off approach to record keeping and privacy mandates. One concern would be with how an applicant would prove that they met the new CLEO notification requirement if there is no acknowledgment of receipt by the CLEO, and what future repercussions might be. Application denials? Revocation of approved applications with forced surrender of the firearms? The ATF has already proven that they are not above such tactics in the recent Form 1 Machine Gun debacles, which are still in litigation. Or worse?
The second concern would be how the CLEOs are protecting applicants sensitive information that is contained in the notification paperwork. As the $200 cost associated with making or transferring NFA firearms ($5 for transferring AOWs) is not a fee or a price for goods or services sold but, rather, the tax paid for making or transferring the item, the application could well be considered a tax document. This document details the what firearms are being made or transferred, at which physical address, and – for many applicants – their home address, photograph, fingerprints, signature, and other sensitive information. This information could potentially be problematic if it fell into the wrong hands, which is not outside the realm of possibilities when the CLEO is able to simply toss your notification paperwork into the trash bin for dumpster divers to find or leave it laying around on a desk at the PD for petty crooks to have a look at as they are brought through.
As if identity theft wasn’t enough of an issue, without any mandated safeguards on how this information is to be protected, consider the possibility of a motivated criminal coming to Joe Gunguy’s house at 123 Anystreet Lane to steal the expensive 7.5″ Noveske 5.56 AR-15 pattern rifle to use on the streets. If this firearm is so much more dangerous than an off-the-shelf firearm that it requires owners to to register them and pay an extra $200 tax on them and notify the government when we travel with them, does it make sense for the CLEOs to treat the information about those weapons so recklessly? Or is this just another spotlight on the absurdity of the NFA in general?
Attorney General Lynch Signs Off 41P Final Ruling. It WILL Happen in as little as 180 days.
Included in the president’s inappropriately named “New Executive Actions to Reduce Gun Violence and Make Our Communities Safer” is the official harbinger of the BATFE’s 41P rule change.
Despite NFA owners being among the most law abiding gun owners who already have to jump through the most hoops, and despite the fact that – on average – NFA firearms are pretty much never used in crimes, the president’s edicts makes it more difficult to purchase what he calls “some of the most dangerous weapons and other items” through a trust, corporation, or other legal entity.
This change will require fingerprints, photographs, and background checks for all “responsible persons” of the trust or other legal entity. It is unclear what this change will do to the ability for legal entities to use the eForms system, which the BATFE claims to have been spending considerable time and resources on improving and getting the broken eForms Form 1 functionality working again, as the system appears to have no mechanism for accepting photographs or fingerprint or information.
Attorney General Loretta Lynch describes the change as “[closing] the ‘trust loophole’ that people have been using to avoid registering by going through legal trusts, corporations or other legal status.” And – in case this is confusing for some – by “loophole,” AG Lynch means “the law as written.”
Lynch signed off on the rule making and the official BATFE announcement is here. The release states that rule 41P “is effective 180 days after date of publication in the Federal Register,” which can be at any time now. It is unclear whether the BATFE will ever respond, as required, to the 9,000+ comments received regarding the rule change with anything other than “who cares, the president has a pen and a phone.”
41P Final Ruling Summary:
The Department of Justice is amending the regulations of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) regarding the making or transferring of a firearm under the National Firearms Act (NF A). This final rule defines the term “responsible person,” as used in reference to a trust, partnership, association, company, or corporation; requires responsible persons of such trusts or legal entities to complete a specified form and to submit photographs and fingerprints when the trust or legal entity files an application to make an NFA firearm or is listed as the transferee on an application to transfer an NFA firearm; requires that a copy of all applications to make or transfer a firearm, and the specified form for responsible persons, as applicable, be forwarded to the chief law enforcement officer (CLEO) of the locality in which the applicant/transferee or responsible person is located; and eliminates the requirement for a certification signed by the CLEO. These provisions provide a public safety benefit as they ensure that responsible persons undergo background checks. In addition, this final rule adds a new section to ATF’ s regulations to address the possession and transfer of firearms registered to a decedent. The new section clarifies that the executor, administrator, personal representative, or other person authorized under State law to dispose of property in an estate may possess a firearm registered to a decedent during the term of probate without such possession being treated as a “transfer” under the NF A. It also specifies that the transfer of the frrearm to any beneficiary of the estate may be made on a tax-exempt basis
The Introduction to the Unified Agenda of Federal Regulatory and Deregulatory Actions was published today in the Federal Register, and it contained what may be a telling excerpt regarding BATFE’s proposed rule 41P. The Unified Agenda is essentially the roadmap for regulatory planning throughout the coming year. According to the publication’s summary, the document is meant to “identify regulatory priorities and provide additional detail about the most important significant regulatory actions that agencies expect to take in the coming year.” Obviously, one agency in particular is of special interest around here: The Bureau of Alcohol, Tobacco, Firearms, and Explosives – or BATFE.
The Unified Agenda is a massive document, spanning 206 pages in PDF format. Among those 206 pages, the BATFE’s “important significant regulatory actions” that have been identified as top priorities occupies two paragraphs. Of those two paragraphs, the first – after a brief introduction of the BATFE – is dominated by discussion of the proposed rule 41P while everything else the BATFE plans to do for the next regulatory period is stuffed into the second paragraph:
Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)
ATF issues regulations to enforce the Federal laws relating to the manufacture and commerce of firearms and explosives. ATF’s mission and regulations are designed to, among other objectives, curb illegal traffic in, and criminal use of, firearms and explosives, and to assist State, local, and other Federal law enforcement agencies in reducing crime and violence. The Department is planning to finalize a proposed rule to amend ATF’s regulations regarding the making or transferring of a firearm under the National Firearms Act. As proposed, this rule would (1) add a definition for the term “responsible person”; (2) require each responsible person of a corporation, trust or legal entity to complete a specified form, and to submit photographs and fingerprints; and (3) modify the requirements regarding the certificate of the chief law enforcement officer.
ATF will continue, as a priority during fiscal year 2016, to seek modifications to its regulations governing commerce in firearms and explosives. ATF plans to issue regulations to finalize the current interim rules implementing the provisions of the Safe Explosives Act, title XI, subtitle C, of Public Law 107-296, the Homeland Security Act of 2002 (enacted Nov. 25, 2002). ATF also has begun a rulemaking process that will lead to promulgation of a revised set of regulations (27 CFR part 771) governing the procedure and practice for proposed denial of applications for explosives licenses or permits and proposed revocation of such licenses and permits.
Note that this still does not mean that the BATFE is finalizing plans to implement the proposed rule. As we previously reported, BATFE received approximately 9,500 comments about the proposal, each of which must be addressed before making a decision. Resources working on 41P may have been diverted to perusing some of the 310,000 or so comments received regarding the M855 ammo ban which must, likewise, be read and responded to.
It may well be that 41P is at the top of BATFE’s priority list simply to clear it from their docket, as they did with the “green tip ban,” and move on to other issues. While it may not be much of an update, and firearms owners’ only recourse may still be to just “wait and see,” at least there is some indication that something is happening somewhere, and someone may be looking into it.
Two years to the day after the comment period – which received well over 9,000 comments – ended, there is still little news other than that the Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE) has amended the rule 41P status to reflect yet another pushback of up to one month.
The 41P status page has been again updated to reflect a mysterious final action date of 01/00/2016 from the previously noted and equally curious 12/00/2015 final action date. It should again be pointed out that this date is the date by which the BATFE will make a decision on whether or not to implement the changes set forth in the proposed rule, not necessarily the date by which the rule takes effect – if it is ever approved and takes effect at all.
Joshua Prince’s law blog posted on the topic last month with several important notes and some speculation about the potential future of the rule. Prince postulates that “ATF could move forward with a final rule prior to the end of this year or ATF could once again delay the final action date; however, if it is delayed further, it will likely be delayed in one month increments.” Further, he points out the following two important statements from BATFE personnel:
- The Agency Contact, Brenda Friend Esq., previously told Attorney Merting that the rule would not be retroactive and would only apply to new transactions.
- During the 12th Annual Import/Export Conference, I asked ATF howpending transfers would be treated, if a new rule was implemented. ATF responded that any new regulation would only apply to applications submitted after the effective date of the regulation. Attorney Merting confirmed that this was consistent with what Attorney Friend told him.
In essence, it is more of the same wait-and-see that we have had for the last two years.
As always, the GunLink Blog will post additional details as they become available.
As we get closer and closer to the theoretical “12/00/2015” final action date for the ATF’s Rule 41P – the rule that would make it more difficult to make or transfer NFA items to a gun trust – there hasn’t been much chatter about it. This includes the absence of a reply to the 9,500 or so comments that were submitted during the comment period that must be responded to. Prince Law reported in August that there were four reviewers working through those comments.
This year saw, once again, renewed pushes for more gun control that fell flat and served to do little other than rally support against such gun control measures. Anti-gun zealots were, once again, caught cooking the books to get false numbers that they spread as gospel and telling outright lies. This, along with mainstream media coverage of the danger of “gun free zones” this year may even be awakening some of the general public to the utter nonsense that is the gun control agenda.
That turning tide of Second Amendment proponents away from being “the silent majority” is a great thing to see. Some of the delay in 41P movement is said to have been a result of the government resources that had to be devoted to reading the more than 300,000 comments on the armor piercing ammunition regulations (which were ultimately scrapped because “we spoke, they listened“).
Note that this mythical zeroth day of December cited on the Rule 1140-AA43 page is not given as an effective date for 41P. It is the current “final action” date, upon which they will decide whether to scrap this ruling, as they did with the ammo ban, or go with it.
Public sentiment aside, there is also the question of political sentiment. Second Amendment rights are again becoming a hot topic that is finding its way into the media’s political spotlight, to include presidential debates. Add to that the fact that there is legislation introduced that will weaken the NFA’s grip on silencers rather than tighten it, as 41P would do. HR3799 is drawing congressional support with 17 Representatives from 14 states cosponsoring the bill.
In other congressional news, HR3799 co-sponsor Rep. John Carter (R-TX) proposed an amendment to the FY16 appropriations bill, HR2578, which would neuter 41P. H.Amdt 320, which prohibits funds made available by the appropriations bill from being “used to propose or to issue a rule that would change the Chief Law Enforcement Officer certificate requirement in a manner that has the same substance as the proposed rule published on September 9, 2013” was agreed to by a voice vote the day before the bill passed the House. However, H.Amdt 320 – as Sec. 548 in the 6/8/2015 version referred in Senate – appears to be struck from the 6/18 version reported with amendment to Senate.
In sum, nobody still knows when anything will happen or, if and when it happens, what it will be. Nobody knows if 41P will die on the vine, be dropped altogether, or picked up and run with. Nor, if it is the latter, does anyone know how such a scheme would be implemented, what would (or would not) be grandfathered, what would happen to submitted applications in the processing queue, etc. At least, if they do know, they aren’t telling.
A final decision on ruling 41P – the rule change that would add further impediments to owning NFA items such as silencers and short barreled firearms – has officially been pushed back. Again. Previously expected nearly a year ago, a decision was pushed back to the end of 2014 and then again to “sometime in May 2015.” More recently, the NSSF released a statement that a decision would likely not come for another six months at a minimum.
Yesterday, the NSSF’s prediction was officially confirmed as the OMB’s Office of Information and Regulatory Affairs website was updated to reflect a new final decision date of “12/00/2015,” meaning “sometime in December 2015.”
Keep in mind that this does not mean that 41P will go into effect in December or, for that matter, that a decision will actually be reached by that point. Several dates have been given as the final action date, yet those dates have come and gone with only more delays. In addition to addressing each concern raised in the 9,500+ comments received on the matter, the NSSF brought up a number of technological and implementation hurdles that would need to be addressed – perhaps no small obstacle given the history of eForm 4 implementation, management, maintenance, and (pending) re-launch.
Despite all of that, a decision will be reached at some point, whether it is in December or later. However, that decision could very well be to say that “this is all rubbish, let’s scrap the idea.” Regardless of when the decision comes and what it is, we maintain that there is no time like the present to jump into the NFA game and doing so with an NFA gun trust is an easy way to do it.
The abstract of the rule change reads:
The Department of Justice is planning to finalize a proposed rule to amend the regulations of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) regarding the making or transferring of a firearm under the National Firearms Act. As proposed, the rule would; (1) add a definition for the term “responsible person”; (2) require each responsible person of a corporation, trust or legal entity to complete a specified form, and to submit photographs and fingerprints; and (3) modify the requirements regarding the certificate of the chief law enforcement officer (CLEO).
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