Manufactures and/or Exporters of Items on U.S. Munitions List
I have been in touch with the NSSF, NRA, and manufacturers in our industry for most of this year. Let me try to explain the situation. Manufacturers are trying to comply with a longstanding, but little known requirement under federal law (Arms Export Control Act) and the Internal Arms Trade Regulations (ITAR) administered by our State Department that requires "manufacturers" of "defense articles" listed on what is called the U.S. Munitions List (USML) to register with the State Department, even if they don't actually "export" any defense articles." Firearms and ammunitions up to and including 50 caliber (excluding shotguns and shot shells) are "defense articles" on the USML. Larger firearms and calibers are also covered under different parts of the ITAR. You have to pay a fee to register. This requirement is on the top of your federal firearms license that you get from the BATFE. It is a federal crime to export a USML controlled firearm or ammunition without an export license issued from the State Department, and you cannot obtain a license without being registered.
If you manufacture parts for a USML controlled firearm, like the barrel, receiver or frame, for example, you are required to register (and pay a fee) as a manufacture with the State Department even though you aren't making or assembling the completed actual firearm and are not exporting anything to anyone.
President Bush mandated in January 2008 the Bureau of Political-Military Affairs / Directorate of Defense Trade Controls must go from 40% to 75% self funding. Go to
www.pmddtc.state.gov./ for current information and the U.S. Munitions List Articles descriptions.
The Shooting Sports Industry thought they were registered with the BATFE and governed by their regulations including exporting. The State Department told me they don't communicate with the BATFE and are not under BATFE regulations. Part of the Patriot Act I understood was to get government agencies to communicate information and simplify regulations. We in the industry thought we were following proper procedures.
It was explained to me, there was a decades old requirement for manufactures and/or exporters of articles on the U.S. Munitions List to register with the United States Department of State as explained above. The enforcement was loose and more for real military specification articles like military spec. rifles, pistols, short shotguns, explosives, rockets, airplanes, etc., military spec. components of these or services. Could this include bluing or ceramic coating of gun components in the future?
Currently gunsmiths tell me the BATFE is trying to get FFL registered gunsmiths to change present FFLs to be manufacturing FFLs. Will they then need to register as manufactures with the State Department for an additional $2250 a year? The NSSF says a large number of FFLs are being surrendered.
Who is required to register and the interpretation of what is covered by the U.S Munitions List has broadened greatly. The fee/tax, finalized on Sept.25, 2008, went from hundreds of dollars several years ago, $1750 this year, to $2250 currently to register the first year and thereafter
yearly as a domestic manufacturer Tier I and $2750
yearly for Tier II or III for even one export request in the previous year. So it costs an addition $500 yearly to export. What everyone complacently thought was the registration fee/tax was only required to be paid by exporters,
NO, it covers anyone who makes, doesn't technically even sell in theory, any article the government says is covered by the U.S. Munitions List, such as 6mm PPC bullets. All bullets are covered currently. Could a private individual manufacturing PPC bullets for his own personal use be braking the law by not paying the yearly fee/tax and registering? Note: The State Department can't
currently use the funds collected to seek out those not registered.
Nothing can be exported if you are not registered. When the legal BATFE exporters are used they list the manufacturers of the items to be exported. The manufacturer of the article is being informed of the registration requirement. The State Department told me they are not going for fees for failure to register in the past. The manufacturer submits his money and paperwork they print off the website which includes a template for a reason for rejection letter sent back by the State Department if your submittal is missing something. This takes 4-6 weeks or more. When you receive your registration you are further informed of record keeping requirements and changes in your mission statement required which small businesses will be hard pressed to comply with. The present cost and system is not friendly to small businesses. The system does work but be patient with your supplier.
The catch 22 is the government is taxing themselves in theory for the military munitions the US purchases, so the taxpayer pays higher taxes, not just those U.S. Munitions List purchasers in other countries. Only those who make specifically used military specification articles on the U.S. Munitions List should be given the heavily burden, not the
shooting sport community. The industry is trying to evolve these new regulations governing us. The National Shooting Sports Foundation (NSSF) is on the oversight committee to the State Department. The NSSF is our voice on this issue so communicate your opinions and questions to them
www.nssf.org. The new inclusions, cost and enforcement of an old law are creative. They are the current interpretation of the laws of our country by which we in the industry are governed by. We apologize to the sporting public inside and outside of our borders for the inconvenience.
The shooting sports community is being unfairly burdened in our country's effort for Homeland Security. The registration cost of all the components covered will increase or not be available in the future due to this new shooting sports industry tax. If you do not comply, the penalties could be severe include becoming a felon. Future leaders need to differentiate shooting sport articles from U.S. Munitions List Articles for the future of our sport. You must contact our leaders in Washington. Only
Congress can fix the problem!! Use your vote wisely but you must become a truly informed voter.
Tim North
