On July 22 the U.S. Department of State – Directorate of Defense Trade Controls (DDTC) issued “guidance” meant to clarify who is required under the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR) to register as a “manufacturer” of “defense articles,” which includes firearms and ammunition products (U.S. Munitions List Categories I – III), and pay an exorbitant annual $2,250 registration fee. Under the law, registration is required even if the manufacturer does not export and even if the manufacturer makes component parts.
DDTC asserts that the guidance merely restates existing DDTC policy and interpretation of the AECA and ITAR manufacturer registration requirement.
Unfortunately, DDTC’s “guidance” has created considerable and understandable confusion and concern among gunsmiths and gun owners. The National Shooting Sports Foundation (NSSF) is reviewing the guidance and will send a letter of protest to DDTC expressing our strong opposition to the new “guidance,” the scope of which clearly exceeds their statutory authority. The term “manufacture” as used in the AECA and ITAR is its ordinary dictionary definition. Clearly, many of the activities DDTC claims require registration constitutes gun smithing and is not manufacturing under any reasonable dictionary definition of the term. DDTC’s position is similar to claiming an auto mechanic who fixes your car is a car manufacturer.
NSSF has been working diligently for many years to eliminate, or at least significantly lower, the excessive and burdensome registration fee especially for non-exporting manufacturers and non-essential component parts manufacturers. Simply put, forcing small manufacturer to pay $2,250 annually to register when they are not utilizing the DDTC export licensing system to export products is an unfair and onerous regulatory burden. This is even more outrageous when one considers that DDTC is sitting on at least $140 million dollars of previously paid registration fees collected over many years from exporters from many industries including ours.
Additionally, we have been working with allies in Congress to pressure the Obama administration to complete the Export Control Reform (ECR) initiative, which would with limited exceptions do away with the AECA and ITAR manufacturer registration requirement and onerous fee for commercial and sporting firearms.
To date, the Obama Administration has refused to publish and implement the regulatory changes necessary to transfer for export licensing of commercial and sporting firearms and ammunition products to the Department of Commerce from the Department of State. Read more on Export Control Reform. Yet, the proposed rules have been drafted and ready for publication since December 2012. Inaction persists despite congressional testimony and letters to members of the U.S. House and the Senate that they would publish the rules.
Why has the Obama administration refused to move ECR forward for our industry? It is really very simple. The Obama Administration is singling out our industry for different treatment under the ECR because of its gun control politics. It is time to force Congress to step in and stop the Obama Administration’s gun control agenda from stopping this needed reform. See the ECR dashboard.
How can members of the firearms industry and gun owners help?
- Call your U.S. Representative at 202-225-3121 and U.S. Senators at 202-224-3121 urge him or her to support Rep. Collin Peterson’s (D-Minn.) Resolution, (H. Res. 829) that demands the Obama administration complete the ECR and publish the proposed rules to transfer the licensing of commercial and sporting firearms and ammunition products to the Department of Commerce (which does not require registration or payment of a fee).
- Tell your U.S. Representative and Senators to force DDTC to stop imposing excessive and onerous registration fees on small businesses that do not export products. Tell them to support language in the Fiscal Year 2017 State and Foreign Operations Appropriations bill that will reduce the registration fee to a nominal amount for all non-exporting manufacturers and component part manufacturers.
- Tell your U.S. Representative and Senators stop the Department of State from exceeding its statutory authority; that mounting new sights to improve accuracy on your hunting rifle doesn’t require you to register with the Department of State and pay a fee of $2,250.
