I'm under the understanding that if you do not manufacture the receiver, then you are not a manufacturer. Thus if you had a business where you assembled rifles (AR-15s for example) using receivers made by other companies, you would need a manufacturer's FFL. Is this correct?
Manufacture vs. Gunsmith?
- Thread starter Regen
- Start date
- Status
FIVETWOSEVEN
Member
- Joined
- Aug 28, 2009
- Messages
- 5,146
You wouldn't need a manufacture's license but a regular FFL. To the BATF, the stripped reciever is the firearm and they don't care how a FFL sells it as long as it doesn't break NFA rules.
jimmyraythomason
Member
You do not have to manufacture the receiver to be considered a manufacturer by the ATF. If you are involved in any way with the manufacture of a firearm ,doing as little as finishing/bluing the metal,you will need the manufactrer's FFL 07.(also applys to the example you cited)
Last edited:
LogicGS
Member
It boils down to this:
If you buy parts and assemble or modify a weapon prior to it having been in a customer's hands, you are a manufacturer and need an 07 FFL.
If you sell and deliver a weapon to the customer who then has you perform modifications for him/her you are a gunsmith and need an 01 FFL.
It all revolves around when the modifications are made.
Pre-Delivery to the customer = manufacturer = 07 FFL
Post-Deliver to the customer = gunsmith = 01 FFL
In this instance, to be square you'd want to deliver the parts to the customer first, then accept them back for assembly/modification.
It mostly revolves around the taxes. If you sell components only, you don't have to collect the excise tax. Like say that STI sells me a bare receiver for a 1911. They don't have to collect the excise tax, because that part in and of itself is not a functional weapon. It is assumed that another mfg will have to invest additional work into the piece to make a "gun", and that that mfg will collect and remit the tax to the feds.
On the other hand, if I buy a "short block" kit from STI (slide, frame, barrel, all pre-fit), and also buy a "completion kit" (everything else) at the same time, STI has then delivered to me a complete weapon (more or less), and thus are liable to collect the tax on it.
The ATF has recently clarified that cosmetic operations such as applying camo dip or painting or engraving are not considered "manufacturing" because their sole use is cosmetic. Bluing, Parkerizing, Anodizing, Melonite coating or Ion Bond coating do not meet this definition because they also impart either corrosion or abrasion resistance (or both) along with cosmetic beauty.
If you have to modify parts of the weapon (file, cut, weld, machine, polish, etc), and intend to do so before it has been in retail customer's hands, you need an 07 FFL.
If you intend to assemble complete weapons from parts kits before the parts have been in retail customer's hands, in any volume to speak of, you will need an 07 FFL.
It's not that much higher than an 01, and the reporting requirements for a small operation are not that big a deal.
It was also clarified to me that if you do not wish to import or export or sell to Fed Gov, you are not required to register your 07 business with the State Dept.
Honestly, if you have a question, call your local ATF field office and ask them.
In all my dealings with them, I've not once had any trouble with the people on the ground at ATF. The big wigs may or may not be nice folks, but the rank and file people that I have dealt with have been nothing but helpful and easy to get along with.
Call them up and ask for a clarification, you don't even have to give them your name if you don't want to.
If you buy parts and assemble or modify a weapon prior to it having been in a customer's hands, you are a manufacturer and need an 07 FFL.
If you sell and deliver a weapon to the customer who then has you perform modifications for him/her you are a gunsmith and need an 01 FFL.
It all revolves around when the modifications are made.
Pre-Delivery to the customer = manufacturer = 07 FFL
Post-Deliver to the customer = gunsmith = 01 FFL
In this instance, to be square you'd want to deliver the parts to the customer first, then accept them back for assembly/modification.
It mostly revolves around the taxes. If you sell components only, you don't have to collect the excise tax. Like say that STI sells me a bare receiver for a 1911. They don't have to collect the excise tax, because that part in and of itself is not a functional weapon. It is assumed that another mfg will have to invest additional work into the piece to make a "gun", and that that mfg will collect and remit the tax to the feds.
On the other hand, if I buy a "short block" kit from STI (slide, frame, barrel, all pre-fit), and also buy a "completion kit" (everything else) at the same time, STI has then delivered to me a complete weapon (more or less), and thus are liable to collect the tax on it.
The ATF has recently clarified that cosmetic operations such as applying camo dip or painting or engraving are not considered "manufacturing" because their sole use is cosmetic. Bluing, Parkerizing, Anodizing, Melonite coating or Ion Bond coating do not meet this definition because they also impart either corrosion or abrasion resistance (or both) along with cosmetic beauty.
If you have to modify parts of the weapon (file, cut, weld, machine, polish, etc), and intend to do so before it has been in retail customer's hands, you need an 07 FFL.
If you intend to assemble complete weapons from parts kits before the parts have been in retail customer's hands, in any volume to speak of, you will need an 07 FFL.
It's not that much higher than an 01, and the reporting requirements for a small operation are not that big a deal.
It was also clarified to me that if you do not wish to import or export or sell to Fed Gov, you are not required to register your 07 business with the State Dept.
Honestly, if you have a question, call your local ATF field office and ask them.
In all my dealings with them, I've not once had any trouble with the people on the ground at ATF. The big wigs may or may not be nice folks, but the rank and file people that I have dealt with have been nothing but helpful and easy to get along with.
Call them up and ask for a clarification, you don't even have to give them your name if you don't want to.
What he said.
I am curious though about the State Dept reporting requirement. I have received notice to register (along with a very hefty fee) with the State Dept under ITAR. They seemed pretty certain I was required to do so even though I have absolutely no plan to export.
One should also mention that all of this applies to a commercial business, not to a private individual.
I am curious though about the State Dept reporting requirement. I have received notice to register (along with a very hefty fee) with the State Dept under ITAR. They seemed pretty certain I was required to do so even though I have absolutely no plan to export.
One should also mention that all of this applies to a commercial business, not to a private individual.
Riss
Member
If anyone has insight into the ITAR issue I would be interested. It is one of the stumbling blocks out of several for me to get an 07 FFL.
Bubbles
Member
LogicGS
Member
I asked this question specifically when I did my 07 application and throughout the approval process.
My ATF agent took the question to her people and came back in three or four days with the answer that I was not required to register with State under ITAR unless I was going to import, export, or deal with the federal government.
An 07 FFL can do anything an 01 could do, as well as manufacture ammunition for retail sale (excluding destructive devices and armor piercing rounds).
Zak Smith
Member
This is false. If you read the ITAR regulations, it applies to any manufacturer of any of the ITAR-regulated items, not just an importer or exporter of those items.
LogicGS
Member
Zak Smith
Member
Do you have it in writing? If so, post it.
http://www.fas.org/spp/starwars/offdocs/itar/p122.htm
http://www.fas.org/spp/starwars/offdocs/itar/p122.htm
http://www.law.cornell.edu/uscode/html/uscode22/usc_sec_22_00002778----000-.html
Enjoy.
LogicGS
Member
You quoted section 2778 and then the penalties for violating section 2779.
There are many exemptions listed in the document that you linked to, among them was:
(b) Exemptions. Registration is not required for:
(1) Officers and employees of the United States Government acting in an official capacity.
(2) Persons whose pertinent business activity is confined to the production of unclassified technical data only.
(3) Persons all of whose manufacturing and export activities are licensed under the Atomic Energy Act of 1954, as amended.
(4) Persons who engage only in the fabrication of articles for experimental or scientific purpose, including research and development.
Until you build something that is both viable for sale and profitable, everything you do is R&D. Manufacturing (as any commercial concern would define it) does not begin until you've got a viable product, a target market, capital equipment to manufacture the product, and the money to make it all happen.
Once you've decided that it's viable and you can afford to build them in quantity, you can also afford to pay the registration fees.
Until that time, you're exempt, which makes sense.
I can understand why you'd like the barriers to entry to be as scary as possible, but the only way to navigate the regulations is to deal with the people who administer them.
Ask the question, get an answer, chose your course accordingly.
There are many exemptions listed in the document that you linked to, among them was:
(b) Exemptions. Registration is not required for:
(1) Officers and employees of the United States Government acting in an official capacity.
(2) Persons whose pertinent business activity is confined to the production of unclassified technical data only.
(3) Persons all of whose manufacturing and export activities are licensed under the Atomic Energy Act of 1954, as amended.
(4) Persons who engage only in the fabrication of articles for experimental or scientific purpose, including research and development.
Until you build something that is both viable for sale and profitable, everything you do is R&D. Manufacturing (as any commercial concern would define it) does not begin until you've got a viable product, a target market, capital equipment to manufacture the product, and the money to make it all happen.
Once you've decided that it's viable and you can afford to build them in quantity, you can also afford to pay the registration fees.
Until that time, you're exempt, which makes sense.
I can understand why you'd like the barriers to entry to be as scary as possible, but the only way to navigate the regulations is to deal with the people who administer them.
Ask the question, get an answer, chose your course accordingly.
Zak Smith
Member
Wrong.
None of which apply to a manufacturer in the business of selling the ITAR items.
That is not logically equivalent to
In some cases - like that exception - a person might not have to register; however, without that qualification of your particular situation, your answer is wrong and misleading.
It is simply not true that a manufacturer doesn't have to register unless he is going to "import, export, or deal with the federal government". He must register if he manufacters any of the ITAR items and doesn't fall under the very few exceptions.
That's in pretty poor taste and borders on a personal attack, IMO. The advice you wrote is dead wrong and can get people in trouble, small manufacturers who sell ITAR items, if it is followed. There is no exception for "not importing, exporting, or dealing with the Federal Government"; there is an exemption for experimental or research purpose.
Anyway, the ATF does not administer ITAR, the State Department does.
LogicGS
Member
It doesn't border, it was a personal attack.
I apologize.
Delete all of my posts on the topic if you like.
I told you all exactly what I was told when I asked this specific question.
I'm not trying to mislead, I'm repeating what I was told when I went through the process.
Maybe I'm bound for jail any day now.
gearchecker
Member
My company produces parts for another company. They then assemble and manufacturer completed parts and some sub-assemblies that are under ITAR restrictions.
We don't import or export, or deal with the gov't, but we are required to be registered (if that's the correct term) with them for ITAR.
The restrictions also cover plant security and keeping all non-interested parties out of the plant at all times. It also limits our hiring of people. There's actually a list of nationalities that we can't hire because of sanctioned security requirements. I.E. no Iranians or Cubans, even if they have a green card.
For us ITAR is a royal PITA, but considering the products we manufacturer, and their end use we understand the need for national security and strictly abide to the ITAR requirements.
We don't import or export, or deal with the gov't, but we are required to be registered (if that's the correct term) with them for ITAR.
The restrictions also cover plant security and keeping all non-interested parties out of the plant at all times. It also limits our hiring of people. There's actually a list of nationalities that we can't hire because of sanctioned security requirements. I.E. no Iranians or Cubans, even if they have a green card.
For us ITAR is a royal PITA, but considering the products we manufacturer, and their end use we understand the need for national security and strictly abide to the ITAR requirements.
- Status
