International Legal Affairs: V9N3
Exporting by Hand–Moving Controlled Items in Person
Major imports and exports typically take place via ocean or air cargo. Shipping a container of goods between continents is relatively quick and easy. Air cargo, while more expensive is also very efficient, whether shipping a single box, a pallet or a number of pallets. But, what happens when one wants to move a small quantity of ITAR controlled items to a foreign end user? Could it be done? The short answer is yes–it is possible, but it is not always easy. There are regulations governing exports from the United States to consider, as well as import laws in the receiving country.
Leaving the United States
For the most part, most ITAR regulated items require an approved export license prior to export. There are however more than 60 exemptions to allow the export of ITAR items without a license. The requirements for each exemption varies, but for purposes of this article, we will focus on the regulatory exemption within 22 CFR 123.17(a).
“This exemption is frequently called the $100 exemption, or the $500 exemption. Both names fit but are applied within the regulation very differently.”
Port Directors of U.S. Customs and Border Protection shall permit the export without a license of:
Parts and components for USML Category I(a) firearms, except barrels, cylinders, receivers (frames) or complete breech mechanisms, when the total value does not exceed $100 wholesale in any transaction, except to any of the countries or entities as provided in § 126.1 of this subchapter;
Parts, components, accessories or attachments for USML Category I firearms, except barrels, cylinders, receivers (frames), complete breech mechanisms or fully automatic firearms and parts and components for such firearms, when [t]he total value does not exceed $500 wholesale in any transaction;
Parts, components, accessories or attachments for USML Category I firearms, including fully automatic firearms and parts and components for such firearms, when [t]he total value does not exceed $500 wholesale in any transaction;
As one can see, there are both $100 and $500 limitations within the exemption, depending upon what is being shipped. In addition, under no circumstances are barrels, cylinders, receivers, frames or breech mechanisms allowed for export under this exemption.
Utilizing this exemption requires more than just packing the goods into one’s bags and checking luggage with the airline. To utilize the exemption properly, one must also file notice to US Customs via the Automated Commercial Environment, or ACE. The ACE system is the electronic system used by ATF, US Customs, the US Commerce Department and the US State Department in regulating imports and exports into the country. Exporters utilize ACE to provide notice to US Customs that an export is being pursued and that the export is being conducted properly. Failure to file notice in ACE prior to the export would result in an export violation and potentially result in seizure of the goods and a fine.
Practically speaking, seizures and fines rarely happen. While not common, there are instances of foreign nationals buying non-regulated optics, magazines and other gun parts while within the United States, then carrying the goods back to their home countries. This raises the other aspect of hand carrying firearm parts internationally–the laws and regulations of the destination country.
Entering a Foreign Country
As one might imagine, the laws and regulations of each foreign country is different. There are no general guidelines as to what is allowed to enter or what may not. As an example, Thailand does not regulate the import of firearm parts and accessories. In contrast, Taiwan regulates all firearm parts and accessories but has no import controls on firearm optics. Hand carrying an optic without the proper import permit may result in trouble in South Korea, where the import of rifle optics is regulated.
While it may be attractive to hand carry ITAR regulated items in airline luggage, the risks versus the cost savings may not be worthwhile. Legal trouble and potential incarceration in a foreign country is never desired. Considering that the cost of shipping the ITAR regulated items via FedEx or a freight forwarder may be several hundred dollars, the cost does not outweigh the risks.
Transferring Firearms to Foreign Nationals for Shipment in Luggage
As a reminder to exporters, transferring firearms to a foreign buyer within the United States for transport within their luggage is not allowed–even if there is an approved export license governing the transaction. On May 16, 2013, ATF issued an open letter to all Federal Firearm Licensees regarding the transfer of firearms to foreign nationals under this scenario.
Delivering and transferring a firearm to a foreign purchaser at the airport without completing an ATF Form 4473 or conducting an NICS check would violate 18 USC 922 (b)(3), (b)(5), (m) and (t). Such actions would also violate 27 CFR 478.102, 121(c) and 124(a). The basis for this prohibition is based upon the possible scenario where the foreign national is given access to the checked luggage after the transfer from the FFL. In the event that the flight is delayed or cancelled, it is possible that the luggage could be returned to the foreign national temporarily, making the transfer of the firearm illegal.
In addition, if the foreign national is legally in the United States as a tourist or non-immigrant visa, the sale or disposition of a firearm and/or ammunition would be unlawful under 18 USC 922(d)(5)(B) and 922(y)(2).
An exporter may utilize the services of a passenger airline to move firearms only when the firearms (or other ITAR regulated items) are delivered directly to the airline as freight with transportation directly to the foreign national. When shipped as air cargo, the foreign national has no access to the cargo until delivery within the destination country. This method of shipment would be lawful.
Exporting ITAR and BIS regulated items from the United States is heavily regulated. When contemplating an export, be aware of the regulations involved, seek competent legal advice and/or hire a competent exporter. The risk of legal trouble and financial penalty far outweighs the benefit of inexpensive shipping.
Mr. Wong is a Washington-licensed attorney. He regularly provides legal counsel to the firearm and defense industry via his law firm, The Firearms Law Group. Mr. Wong also manages Hurricane Butterfly, an import/export company that assists firearm manufacturers, resellers and collectors from around the world wade through the regulatory quagmire of U.S. import/export regulations. He may be found online at FirearmsLawGroup.com.
The preceding article is not intended as legal advice and should not be taken as legal advice. If the reader has specific legal questions, seek competent legal counsel.