F.A.I.R. Trade Group/NSSF Import/Export Conference Provides Valuable Compliance Information for Firearms Industry
On August 5 and 6, 2014, the F.A.I.R. Trade Group (F.A.I.R.) and the National Shooting Sports Foundation (NSSF) held their annual Import/Export Conference at the Renaissance Hotel in Washington, DC. The conference has a rich history dating back to 2002, when F.A.I.R. worked with ATF to bring about the first-ever conference dedicated to reviewing regulatory matters and government policies associated with firearms and ammunition imports and exports. The conference has been held every year since then in the Washington, DC area, and since 2011, F.A.I.R. has co-sponsored the conference with NSSF. This year marked the 13th annual and was attended by over 150 industry members eager to learn the latest on compliance from government experts.
The opening panel was from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the agency responsible for administering the import provisions of the Federal firearms laws. Alphonso Hughes, Chief of the Firearms and Explosives Services Division, announced a number of staffing changes, including recent hires to assist in processing import applications and National Firearms Act documents. Chief Hughes announced a goal of reducing the current processing time for tax-paid NFA forms (Forms 1 and 4) from 9 months to 6 months. Chief Hughes also announced ATF’s intention to update two popular publications, The Imports Guide Book and the NFA Handbook. Industry members were asked to submit suggestions for revisions to ATF at firstname.lastname@example.org and email@example.com by September 30, 2014. Chief Hughes introduced the newest member of his management team, William Boyle, Chief of the National Firearms Act Branch.
Desiree Dickinson, Imports Industry Liaison, discussed the mismatch between terms of validity for ATF’s import permit (2 years) and the International Import Certificate (IIC), which is 6 months. Ms. Dickinson advised that the Department of Commerce, which has ownership of the IIC, will soon extend the term of validity to 1 year. She suggested that industry members discuss extension of the IIC to 2 years with Commerce. Ms. Dickinson reviewed the changes made to the U.S. Munitions Imports List (USMIL) by an ATF final rule published in March, 2014(rule can be accessed at www.gpo.gov/fdsys/pkg/FR-2014-03-27/pdf/2014-06778.pdf). The rule removed a number of categories from the USMIL as part of the Administration’s export control reform initiative. William Majors, Chief of the Imports Branch, emphasized the staffing challenges presented by the increasing volume of import licenses. Mr. Majors made it clear ATF will entertain requests to expedite import applications only with documentation the articles sought for importation are required for a law enforcement agency or other government agency.
Lee Alston-Williams, a senior specialist from the Firearms and Explosives Services Division, gave an update on ATF’s e-Forms. Due to problems with the current software, ATF has removed a number of NFA forms from the e-Forms system. Ms. Alston-Williams stated the system currently supports the Form 6 import application, Form 6A, Release and Receipt of Imported Firearms, and the ATF Form 1, Application to Make and Register a Firearm. ATF is working with a new e-Forms contractor and hopes to provide the firearms industry with new and improved e-Forms in the future.
The final speaker on the ATF panel was Helen Koppe, Chief of the Firearms Industry Programs Division. This Division is responsible for marking variances for firearms, which are generally processed within 90 days. Ms. Koppe announced that the responsibility for responding to marking variance requests will be transferred to the Firearms Technology Branch in September.
During the question and answer session, a question was raised about publication of the final rule relating to the notice of proposed rulemaking on NFA trusts (ATF 41P, published in the Federal Register September 9, 2013, www.gpo.gov/fdsys/pkg/FR-2013-09-09/pdf/2013-21661.pdf). Andrew Lange, Chief of ATF’s Regulations Division, stated that the large quantity of public comments may delay publication of the final rule until 2015. Alphonso Hughes answered a question about possible suspension of permits authorizing import of firearms and ammunition from Russia. Chief Hughes announced that all permits would remain valid until the Department of State directs otherwise. He stated that ATF would process all new applications for permits unless the application lists a party blocked by the Office of Foreign Assets Control (i.e., Kalashnikov Concern).
Automated Export System
Joe Cortez from the Census Bureau’s Trade Division gave an update on the Automated Export System (AES). Mr. Cortez outlined recent changes made to the Foreign Trade Regulations and the data elements added to the system by those changes.
United Nations Arms Trade Treaty
Bill Kullman, Deputy Chief of ATF’s International Affairs office, and Rick Patterson, Executive Director of the Sporting Arms Ammunition Manufacturers Institute (SAAMI), gave an informative presentation on the United Nations Arms Trade Treaty. Mr. Kullman emphasized the role of the United States as raising the small arms import and export requirements of the world to the “gold standard” of the United States and to avoid committing the U.S. to additional unnecessary requirements. Mr. Patterson stated that the firearms industry should be concerned about the treaty’s lack of definitions for terms including “small arms,” “ammunition,” and “stockpiles.” He said these omissions are deliberate and provide a placeholder for future amendments that could be detrimental to legitimate commerce in firearms. Mr. Patterson also mentioned end-use certificates and more burdensome transshipment requirements as potential problem areas in the treaty.
Round-Table Sessions a Big Hit
Sponsors of the conference made a major change in format by devoting most of the afternoon of the first day to round-table discussions. Ten different tables were set up with government experts ready to discuss imports, National Firearms Act transactions, Firearms Industry Programs issues, ATF e-Forms, ATF field compliance inspections, Immigration and Customs Enforcement, firearms and ammunition excise tax (Treasury’s Tax and Trade Bureau), Automated Export System (Census Bureau), State Department Licensing and Policy, and sanctions imposed by Treasury’s Office of Foreign Assets Control. The smaller groups and informal discussions resulted in many lively interchanges between government experts and industry members. Experts and attendees said the format resulted in great communication and should be continued.
Immigration and Customs Enforcement Emphasizes Criminal Smuggling Violations
The final session for Day 1 was from David Whalen of Immigration and Customs Enforcement, Homeland Security Investigations (HSI). Mr. Whalen’s experience investigating cross-border firearms smuggling was evident as he gave attendees examples of “red flags” that should raise suspicion in international import and export transactions. He assured attendees that HSI is interested in investigating egregious criminal violations, rather than technical regulatory violations.
Add-On Session for Basic Import/Exports Training
Based on feedback from previous conferences, F.A.I.R. and NSSF offered attendees an optional 2-hour basic course on importation and exportation. Approximately 60 attendees signed up for the course, many new to import/export. Teresa Ficaretta, a Federal retiree with 28 years of ATF experience, gave the imports section of the training, which included an overview of the import provisions of the Gun Control Act, the National Firearms Act, and the Arms Export Control Act. Jim Bartlett, Partner and Director of U.S. Operations for Full Circle Compliance, gave the export portion of the training, covering State Department regulations, Commerce Department’s Export Administration Regulations, and sanctions imposed by the Office of Foreign Assets Control. F.A.I.R. and NSSF report positive feedback for this type of basic training and may expand it at future conferences.
Day 2: ITAR Registration, Brokering, Voluntary Disclosures, and Compliance Programs
Day two of the conference was devoted to the controls over exports of defense articles governed by the Department of State, Directorate of Defense Trade Controls (DDTC). Danielle Pressler from DDTC Compliance gave a thorough overview of registration requirements of the International Traffic in Arms Regulations (ITAR), recent amendments to the brokering requirements of ITAR, and the elements of an effective compliance program. She also discussed voluntary disclosures of violations to DDTC and encouraged self-audits to identify such violations. Ms. Pressler emphasized the fact that 99 percent of all voluntary disclosures are closed without further action.
Ms. Pressler’s remarks meshed well with a presentation from a panel titled “Designing and Maintaining an Effective Compliance Program.” James Bartlett from Full Circle Compliance, Johanna Reeves, Managing Partner of Reeves and Dola, and Thomas Trotto, from Immigration and Customs Enforcement HSI, made up the panel. Many of the compliance program elements emphasized by Mr. Bartlett and Ms. Reeves were similar to those in Ms. Pressler’s presentation. Attendees had questions for the panel about potential violations and when they warrant disclosure to State.
The final presentation at the conference was by Julio Santiago, a licensing officer with DDTC licensing. Mr. Santiago made informative and entertaining remarks on licensing, end-user monitoring, permanent exports, temporary imports, temporary exports, congressional notification, and licensing exemptions.
Next Year’s Conference
F.A.I.R. and NSSF report positive feedback from attendees and have begun planning next year’s import/export conference. Given frequent changes in foreign policy, ongoing export control reform, and the ever-changing nature of domestic firearms policy, industry members should definitely plan on attending the 2015 conference.
Johanna Reeves, Managing Partner, Reeves and Dola, LLP and Executive Director of F.A.I.R. Trade Group, contributed to this article.