As the world becomes increasingly more complicated, one might imagine that there is an official list of “naughty” countries (or individuals) to which U.S. citizens and corporations may not export arms. It would clearly be against U.S. Foreign policy to send arms to a country where U.S. service men and women are put into harm’s way. Officially, there are several lists maintained by several U.S. Regulatory agencies, including the Commerce, Treasury and State Departments. Parties may search the consolidated list of prohibited parties online at: www.export.gov/csl-search

Searching the Consolidated Screening List is not difficult and is legally required for export compliance. While there are companies that offer software to search the Consolidated Screening List, using the list online is easy, quick, reliable and most importantly, free. There have been cases of export violations occurring where an exporter, using a paid screening service, did not catch a recent addition to one of the lists. An after action report showed that the paid subscription service had not updated the list in a timely manner, resulting in a prohibited person being involved in an export transaction. As one might imagine, this resulted in an export violation to the exporter and triggered a monetary fine.

The lists maintained by the U.S. Government exist for a variety of reasons—the interests of the U.S. State Department and the Treasury Department may be identical in seeking to prevent the proliferation of arms worldwide, but the triggering violation will likely be specific to the agency. This has resulted in a number of lists, all of which should be checked and are included within the Consolidated Screening List. The official watch lists maintained by the U.S. Government include the following:

The Denied Persons List: This is a list maintained by the Department of Commerce, Bureau of Industry and Security. The individuals and corporate entities on this list may be U.S.- or foreign-based and have been placed on this list because they have been denied U.S. export privileges. Dealing with any party on this list is not allowed.

The Unverified List: This is also a list maintained by the Department of Commerce, Bureau of Industry and Security. The parties to this list have been involved in prior export transactions, but the Commerce Department was not able to certify the legitimacy of the party in the prior transaction. While not prohibited per se, dealing with a party on this list should be considered a red flag.

The Entity List: This is the third and final list maintained by the Department of Commerce, Bureau of Industry and Security. Some commodities do not require an export license to ship from the United States. However, dealing with a party on this list may trigger a license requirement specific to the party listed within the list. Parties to this list have typically been identified as being an increased risk of diverting lawful exports to prohibited parties and/or destinations.

Non-proliferation Sanctions: This is a list maintained by the U.S. State Department to prevent illegal arms proliferation. Parties to this list have been sanctioned for violating U.S export laws that prohibit the proliferation of nuclear, chemical and biological weapons of mass destruction and their delivery systems, advanced conventional weapons and related materials, technologies and expertise.

The Debarred List: This is the second list maintained by the U.S. State Department. It lists entities and parties that are prohibited from participating directly or indirectly in the export of defense articles, to include technical data and defense services. Parties are added to this list via “statutory debarment” upon conviction of violating or conspiring to violate the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR). In some cases, parties are added to this list via an “administrative debarment,” where an administrative proceeding is conducted to determine whether the party violated the AECA, but no criminal charges were pursued.

The Specially Designated Nationals List: This is one of six lists maintained by the Department of the Treasury, Office of Foreign Assets Control. This is a general list of prohibited parties that have violated Treasury regulations. Parties on this list are prohibited from transacting export transactions.

Foreign Sanctions Evaders List: This is another list maintained by the Department of the Treasury, Office of Foreign Assets Control. Foreign individuals and entities on this list have been determined to have violated, attempted to violate, conspired to violate or caused a violation of U.S. sanctions on Syria or Iran. The list also included foreign persons who have facilitated deceptive transactions for, or on behalf of persons subject to U.S. sanctions. Transactions by U.S. persons or conducted within the United States involving parties to this list are prohibited.

The remaining four lists maintained by the Department of the Treasury, Office of Foreign Assets Control are specific to Russian parties, the Palestinian Legislative Council, Iranian parties and certain foreign financial institutions. Parties to these lists are either prohibited from export transactions with U.S. parties, or strict conditions have been created prior to any transaction taking place.

The world is a big place, and parties seeking to do business with American companies are not always honest or legitimate. There are many instances of Iranian and Chinese parties acting in bad faith, attempting to export controlled items for improper purposes, to foreign bad actors. Many who seek to complete an illicit export transaction are caught, arrested and imprisoned. When a U.S. company is involved, fines are usually levied, although criminal charges may also be pursued against the company and/or the controlling managers of the company. It pays to know the parties to any proposed export transaction and screen all parties to the transaction. A domestic supplier may be a debarred party on the U.S. State Department list. Similarly, a freight forwarder may be listed within the Commerce Denied Persons List. U.S.-based exporters and those abroad that deal with U.S.-made goods are advised to screen all parties to an export transaction, whether U.S.-based or foreign-based.

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Mr. Wong is a Washington State licensed attorney and manages Hurricane Butterfly, a U.S.-based import/export company that assists foreign and domestic firearm manufacturers, resellers and collectors wade through the regulatory quagmire of U.S. import/export regulations.

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.

Frequent readers of this column will note that we’ve been following the Defense Distributed case since inception and originally noted that this was a First Amendment and Freedom of Speech case versus over-reaching Government regulation.

The ability to regulate speech in the United States is very difficult. We noted back in 2015 that there are generally two ways in which free speech within the United States may be restricted. Regulations may be imposed upon the time, place and manner of expression, but the restrictions imposed must be content-neutral, the restrictions must be narrowly tailored to serve a significant government interest, and the restrictions must leave open ample alternative avenues of communication.

Restrictions on content (as were contemplated by a 2015 U.S. State Department proposed regulatory change to the ITAR and pursued by the U.S. State Department within its regulatory enforcement action against Defense Distributed) may have been permissible if the restriction passes “strict scrutiny.” Strict scrutiny requires the government to show that the restriction serves “to promote a compelling interest” and that the restriction is “the least restrictive means to further the articulated interest.” We predicted back in 2015 that “[it] is unlikely that DDTC can overcome the strict scrutiny threshold under the current proposed regulation language.” It should come as no surprise that the U.S. State Department backed off from its enforcement action and agreed to dismiss all litigation related to the case.

One would think that following the settlement, that would be the end of the case. Unfortunately, Attorney Generals in eight U.S. States (apparently) did not pay attention in law school and have filed additional litigation against Defense Distributed to prohibit the online publication of the programs needed to 3-D print a firearm. This article will predict now–as it did in 2015–that the eight States that filed litigation cannot prohibit this type of speech.

Recall that the eight Attorney Generals are seeking to prohibit the online publication of Defense Distributed’s software. From a technical standpoint, the very thought that the internet could be restricted is ludicrous. From a legal stand point, the current litigation is nearly exactly the same argument as the U.S. State Department’s argument–that there should be a restriction on the content that Defense Distributed is publishing online.

Acceptable First Amendment restrictions on content include defamation, fraud, obscenity, child pornography and threats. Not surprisingly, there are no restrictions on the print publication of the Anarchist Cookbook, The Improvised Munitions Handbook (FM 31-210), or any number of books published on how to manufacture a firearm, whether from common materials found around the home or via the use of complex machinery. The online publication of Defense Distributed’s software is no different from the print version of a similar book.

Recall that these types of restrictions must pass a “strict scrutiny” analysis. Would a prohibition on the online software serve “to promote a compelling interest?” Is the proposed prohibition “the least restrictive means to further the articulated interest?” In both cases, the answer must be no. Manufacture of a firearm by an individual within the United States is not illegal. While some states (like California) require homemade firearms to be registered, most states have no restrictions on the manufacture of firearms made for personal use. There are no such restrictions on the manufacture of firearms for personal use in Federal law. Simply, there is no compelling interest to prohibit an activity that is otherwise legal.

Is “the least restrictive means to further the articulated interest?” In simple terms, no. The internet is very difficult to regulate. It would be impossible to prohibit the online publication of the Defense Distributed code within the eight states that take offense. If Defense Distributed were prohibited from publishing its code in the eight states that take offense, such a prohibition would effectively ban publication (by Defense Distributed) worldwide. Once released, the information has been copied and shared worldwide and is readily available online despite Defense Distributed’s agreement to remove the plans from its website.

Release of the information is far from the public nuisance that politicians and the media have portrayed it to be. Efforts to manufacture a Liberator pistol would require several thousand dollars in equipment and a significant amount of time to make a pistol that may not be safe to fire once produced. Rather than going after the information, the eight states should be going after illegal action performed by possessing the information being distributed. This argument is further supported by the fact that the information has already been released; like the proverbial horse and barn door, it is far too late to control the flow of information on the internet once it has been released.

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This article is not intended as, and should not be taken as legal advice. If you have legal questions regarding the content of this article, seek competent legal counsel. 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 maintains Hurricane Butterfly, an import/export company that assists U.S. firearm manufacturers and foreign buyers wade through the regulatory morass of U.S. import/export regulations.

Faithful readers of this column are well aware of the ongoing efforts to modernize and streamline the current procedures for the export of small arms from the United States. Recent media reports attribute the recent proposed changes to the Trump presidency, but in reality, export control reform has been underway since 2009, at the request of President Obama. Undertaken with the goal of strengthening national security and increasing the competitiveness of U.S. manufacturing, the reform effort has focused on current threats while adapting to changing economic and technological landscapes. The reform effort has taken two noteworthy avenues: ITAR category revisions and EAR/ITAR definition harmonization. Back in 2016, this column predicted that “[t]rue export reform will not occur for most readers until USML Categories I, II and III are completed; however, at this juncture it seems unlikely that massive changes will be made to these categories.” This author could not have been more wrong.

Transfer of Jurisdiction

The U.S. State Department currently controls jurisdiction over most small arms and ammunition, with the exception of shotguns and shotgun ammunition, which are governed by the U.S. Commerce Department. Under the May 15 proposed regulatory change, all semiautomatic firearms would transfer from State to Commerce. Small arms that were once in USML Category I will be moved to Commerce ECCN categories 0A501 and 0A502. Firearms that fire caseless ammunition, fully automatic firearms, sound suppressors, magazines with a capacity exceeding 50 rounds and firearms that are specially designed to integrate fire control, automatic tracking or automatic firing will remain within USML Category I and under State jurisdiction.

Exports of previously State-regulated firearms should become easier under Commerce, albeit, probably slower. The U.S. State Department currently processed export license applications rather quickly, with Commerce taking quite a bit longer. Nevertheless, there is no fee to file an export license under the Commerce Department. Which leads us to…

ITAR Registration Fees

ITAR registration fees have been a major sticking point to firearm manufacturers. Prior to 2012, the annual registration fee was $1,750. In 2012, the registration fee was redesigned on a sliding scale, with $2,250 as the base fee, $2,750 for companies that export 10 times or less per year and $2,750 plus $250 per export over 10 transactions per year. Application of the fee was routinely applied to firearm manufacturers but was also extended to manufacturers of firearm parts and accessories. Enforcement efforts were exhaustive, with reports of the U.S. State Department contacting major distributors and asking for ITAR registration for each firearm parts supplier. For many small businesses that conducted little or no international business, the registration scheme was burdensome and excessive. Several very small businesses discontinued business rather than pay the ITAR registration fee.

With the transfer of jurisdiction from the U.S. State Department to the U.S. Commerce Department, many current registrants may not be required to register under ITAR, unless they currently manufacture suppressors, magazines that exceed 50-round capacity, caseless ammunition and the weapons that fire caseless ammunition, or fully automatic weapons.

Rifle Scopes

Jurisdiction of rifle scopes depends upon whether the optic is “manufactured to military specifications.” Under the proposed regulations, all optics would transfer to the Commerce Department unless they incorporate night vision or infra-red capabilities that are defined under USML Category XII. All optics would be classified under ECCN 0A987 under the proposed regulations.

Performance of Defense Services

Defense services are currently regulated under the ITAR. Teaching a class on anything more advanced than basic use and maintenance of a rifle is deemed a licensable event under the ITAR. With the transfer of jurisdiction of semiautomatic firearms to Commerce, training that would have required a license under the old rules will not require a license if the new rules are adopted.

Export of Technical Data

Frequent readers of this column will recall the argument between 1st Amendment rights to free speech versus the U.S. State Department’s determination on what constitutes “export activity.” Recently, legal action was taken against Defense Distributed for posting plans online on how to use a 3D printer to manufacture a handgun. Under the ITAR, this was a deemed export, and the U.S. State Department sent a cease and desist letter to Defense Distributed in an attempt to prevent further “deemed exports.”
The BIS notice of proposed rulemaking states: “Part 734 makes clear that publication of technology on the Internet is not an export of that technology to the rest of the world; rather it is a release of that technology from export controls.” Should jurisdiction transfer from State to Commerce, the actions undertaken by Defense Distributed would not be illegal.

The government has historically had difficulty in striking an appropriate balance between national security and national competitiveness via export control. The new proposed regulations are just that–proposed. There is no timeline on when the new rules will take effect, and the final rules could be different from what has been proposed. Both the State and Commerce Departments will be taking comments (for, or against) the proposed regulatory changes through June 30. Interested parties may submit comments on the proposed regulations by emailing DDTCPublicComments@state.gov with the subject line, “ITAR Amendment–Categories I, II and III.” Comments received after June 30, 2018, will be considered, if feasible, but consideration cannot be assured. Comments received are subject to public disclosure, so those wishing to submit anonymous comments may do so by submitting their comments via www.regulations.gov and leaving the fields that would identify the commenter blank and including no identifying information in the comment itself.

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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.

Gun control pundits have long extolled the virtues of an Australian or European gun control scheme, pointing to the low incidences of gun violence in Australia and Europe. Listening to politicians and media worldwide, the high rates of firearm ownership were apparently the root cause of mass shootings throughout the United States, to include recent events in Aurora, Colorado and San Bernardino, Colorado. With recent mass shootings in Paris and Brussels, a series of high profile attacks against women, Europeans are re-evaluating their positions on gun control. As usual, the politicians seem disconnected from reality and the will of the populace.

Market Forces

Austria, one of the most heavily armed countries within the European Union, reports an estimated 900,000 firearms held by a population of 8.5 million. Despite already being one of the most heavily armed countries within Europe, sales of firearms in Austria have exceeded prior year to date sales. “Nearly all shotguns are sold out because you don’t need to have a firearms permit to buy them,” Thomas Ortner, spokesman for gun retailers in the state of Upper Austria. “Registration courses for pistols are usually held only every five weeks but are now held weekly.” According to Austrian law, anyone 18 and over can buy and own a shotgun or certain types of rifles, but they must be registered at a licensed dealer on gunsmith within six weeks of purchase. The report also noted that many of the new gun buyers are women. The report stated that the most common reasons given for buying a gun were fear of refugees and fear of burglars.

A January 2016 article from Reuters pointed out that the best-selling products on the “Sport & Leisure” section of Amazon.de (the German Amazon.com) revealed brisk sales of defensive sprays. The Reuters article also noted that the president of German defensive spray manufacturer DEF-TEC indicated that sales of the products “rose seven-fold in the final three months of [2015].”

Following a well-publicized scene of violence in Cologne on December 31, 2015, reportedly more than 300 people have applied to Cologne police for licenses to carry gas pistols and imitation firearms; only 408 such licenses were granted in all of 2015. Actual firearms are also in great demand – German state news agency Deutsche Welle noted a similar trend. According to Deutsche Welle, “most customers want a pistol that can fit easily into a handbag or a small drawer in the night table.” Moreover, the news outlet reported that “there has been an increase of at least 1,000 percent or more in Google search queries for gun permits since January.”

Faced with increased threats of random violence, European citizens are seeking to arm and protect themselves by whatever means necessary. As Europeans are learning, a gas pistol may not be ideal when confronted by an unruly mob or an armed gunman, but it’s better than nothing. Sadly, Europe’s politicians are seeking to disarm the continent’s citizens, rather than allow for increased self-reliance and personal protection.

Political Forces

As gun sales increase throughout Europe, the European Union Parliament is seeking to impose additional restrictions on the purchase and possession of firearms. A proposed directive jointly issued in December 2015 by Internal Market and Industry Commissioner Elzbieta Bienkowska (Poland) and Migration, Home Affairs and Citizenship Commissioner Dimitris Avramopoulos (Greece) that would restrict all “Semi-automatic firearms for civilian use which resemble weapons with automatic mechanisms.” This restriction is an attempt to ban firearms based upon form, rather than function. In addition, the restriction would apply to all firearms, including pistols, blank guns, and flare guns. This proposed restriction would be a constructive ban on nearly all semiautomatic rifles within the continent, regardless of caliber, model, historical significance, or value. Most importantly, the proposed regulation would seek “…to ban certain semi-automatic firearms, which will not, under any circumstance, be allowed to be held by private persons, even if they have been permanently deactivated.”

In addition to restricting “military-type” firearms, the European Parliament proposes that all firearm owners be subject to mandatory medical testing in order to own and possess firearms. The regulation reads: “Member States shall provide for standard medical tests for issuing or renewing authorizations as referred to in paragraph 1 and shall withdraw authorizations if any of the conditions on the basis of which it was granted is no longer met.” In effect, the European Parliament seeks to treat law-abiding shooters as mentally ill unless proven otherwise, by forcing mandatory medical tests to assess the “physical, mental and cognitive aptitude” of gun license holders.

If mandatory medical testing was not enough, additional restrictions on possession, ownership and sales are proposed. Under the proposed regulation, “good cause” must be shown to possess a firearm. The UK ‘Section 2’ system of licensing an unlimited number of shotguns would be outlawed. Instead, a good reason must be presented for each and every firearm purchased and possessed. Private sales via the internet would be prohibited by anyone other than a licensed dealer or broker.

Although each European country has laws in place dictating the deactivation of live firearms, the proposed regulation would harmonize the requirements with the UK standard. Under the proposed regulation, “deactivation” would require completely destroying and/or removing internal parts, replacing bolt carriers with dummy parts, and welding the action so that deactivated firearms cannot function.

Finally, the potentially most troubling proposal allows the creation of an EU-wide gun registry – similar to the type of registry pursued (and recently abandoned) by Canada. Such a database would have huge implication to personal privacy and individual liberty.

A press release detailing the proposed restrictions may be found online at http://europa.eu/rapid/press-release_IP-15-6110_en.htm

As of press time, the proposed regulation was facing strong opposition from the European public and from a majority of Members within the European Parliament. Nevertheless, in March 2016, an amendment was proposed that would regulate magazines with a capacity of 10-rounds or more. In justifying the proposal, British Labour MEP Claude Moraes was quoted as saying that “large magazines make firearms more dangerous and should be subject to license.” As American readers know, this effort was tried in the United States from 1994 – 2004, with little to no effect on crime rates.

As most within the shooting community know, terrorists are not law abiding and compliance with these proposed laws and restrictions seems doubtful. These latest restrictions are tired, played-out arguments that gun control pundits have been arguing in support of for years. Sadly, with the increase in violence within Europe, and the lack of a personal right to possess and bear arms, the political will may be great enough to pass sweeping restrictions against firearm possession.

For many years, the import/export community has relied upon a combination of paper and electronic submission of required documents. As the U.S. Government gets pulled into the 21st Century (albeit, sometimes reluctantly) we are beginning to see increased automation and efficiencies in the import/export realm. ATF established the E-Forms system several years ago, allowing the electronic submission of import permit applications. Similarly, U.S. Customs and Border Protection established the Automated Export System (AES) as a means of electronically filing export paperwork. Despite AES, Customs entries for incoming shipments still required submission of clearance documents in paper format. Outbound shipments required exporters to present paper copies of export paperwork in person, so that CBP could enter the data into their system.

Under the legacy AES system, industry members were the nexus of all information. Importers filed for, and received ATF Form 6 import permits. Importers then filed the ATF Form 6 with U.S. Customs upon arrival. An ATF Form 6A was presented to U.S. Customs for execution. There was no way for U.S. Customs to speak directly with ATF without significant effort. Similarly, exporters applied for, and received BIS and DDTC export licenses. DSP5 export licenses were presented in paper format by exporters to Customs for entry into the CBP system. Shipping documents were examined in paper format by individual officers, often while holding up a shipment. That is, until now.

In April, 2001, U.S. Customs announced a modernization effort to import and export transactions, thus starting the Automated Commercial Environment (ACE) Portal system. In 2003, Customs began designing a web portal, and invited 40 importers to test and evaluate the system. By June, 2004, over 145 importer and Customs Broker accounts had been established within the nascent system. During the next ten years, the system was upgraded, tested, and verified by users in the import/export community. The system is now ready for full implementation, with plans to disable and shutter the legacy AES system.

According to U.S Customs, “the ACE Secure Data Portal is a web-based application providing a single, centralized on-line access point to the ACE system and connects CBP, the trade community and government agencies involved in importing goods into the United States. The ACE portal gives users access to view their account information as it exists in CBP and to their transactional data, which they can use to identify and evaluate compliance issues and monitor daily operations.” Importers no longer need to present an ATF Form 6; the approved form is automatically uploaded into the ACE system by ATF. Although the form will still be required, the ATF Form 6A no longer needs to be presented to U.S. Customs. Similarly, exporters no longer need to present a paper copy of the DSP-5 export license to U.S. Customs, as DDTC will automatically upload a copy into the ACE system. In terms of efficiencies, the new ACE system will allow for faster and more streamlined transactions for imports and exporters.

In addition to ATF and DDTC, the ACE system plans to implement partnerships with the Centers for Disease Control, Defense Contract Management Agency, the Animal and Plant Health Inspection Service (APHIS), National Highway Traffic Safety Administration/Department of Transportation, and the Food and Drug Administration.

The system is not perfect; the ACE portal is still experiencing growing pains. At some point, the legacy AES system will be phased out. The deadline for shuttering AES has been pushed back several times, but migration has already begun.

As of February 28, 2016, CBP has announced that it will offer limited Client Representative and Technology Service Desk support, will perform AES maintenance during peak business hours, and will provide processing priority to ACE entries where corresponding AES entries are still available. Full migration is expected sometime during the summer of 2016.

Importers and exporters needing an ACE account will find the application for the new system relatively easy. In addition, there are plans to place historical AES data within the ACE system, to allow for seamless transition between the two systems. More information on the ACE data portal may be found at the U.S. Customs website, or by searching for additional information online.

January 2013: Defense Distributed, a nonprofit, gun-design digital publisher headquartered in Austin, Texas started offering free online technical information about gun-related items, including a 3-D printed magazine for the AR-15 rifle.

Following publication of the AR-15 magazine code, the Defense Distributed website provides instructions for a 3-D printed pistol called the Liberator. According to Defense Distributed, within days, users downloaded the files “hundreds of thousands of times.”

May 8, 2013: the U.S. State Department Directorate of Defense Trade Controls (DDTC) sent a letter to Defense Distributed, informing the company that the online instructions may have violated regulations for exporting defense articles and services. According to DDTC, ITAR restrictions may require Defense Distributed to obtain prior authorization from the Directorate of Defense Trade Controls before releasing the technical data online.

Following receipt of the Government’s letter, Defense Distributed removed the instructions to manufacture the Liberator pistol from the internet.

June 2013: Defense Distributed submitted the first commodity jurisdiction request to DDTC, seeking review of (10) 3-D printer files. No response is received from DDTC.

September 2014: Defense Distributed sent a request for pre-publication review to the Department of Defense Office of Prepublication Review and Security (DOPSR).

October 2014: DOPSR refused to review the Defense Distributed submission because DOPSR is uncertain whether the submission is subject to ITAR. DOPSR suggests that Defense Distributed submit a commodity jurisdiction request to DDTC.

January 2015: Defense Distributed sent a second commodity jurisdiction request to DDTC.

April 2015: DDTC determines that ITAR restrictions apply to the 3-D printer software, CNC software and firearm design files, but do not apply to the physical CNC machine or 3-D printer.

April 29, 2015: Defense Distributed, in conjunction with the Second Amendment Foundation, files a lawsuit against the U.S. State Department, alleging that pre-approval publication amounts to a violation of free speech rights, a violation of one’s right to keep, bear, and manufacture arms, and a violation of due process.

May 11, 2015: Defense Distributed seeks an injunction against DDTC, seeking to restrict the enforcement of any prepublication approval requirement against unclassified information under the ITAR, including all of the Defense Distributed files submitted for DOPSR review.

June 3, 2015: DDTC publishes proposed regulations to re-define the definitions of “defense services,” “technical data,” “public domain,” and “fundamental research.” DDTC also seeks to define electronic transmission and storage of technical data in terms of the ITAR. Within the proposed definition of “public domain,” DDTC attempts to restrict the publication of any firearm-related technical data online without prior approval.

New developments:

On August 4, 2015, the 5th Circuit Court issued a ruling on Defense Distributed’s request for injunction. When reviewing an injunction, a court will examine four factors in determining whether to issue injunctive relief:
1. Irreparable harm. The court will consider whether the significance of the harm suffered by the requesting party if he injunction is not granted.
2. Balance. The court will determine the effects of not issuing the injunction. That is, will the non-requesting party be harmed if the injunction is issued?
3. Public interests. If the injunction is issued, what effect will the injunction have on the public interest?
4. Likelihood of success. How likely is the party requesting the injunction to succeed at the end of the litigation?

In making its decision, the Court determined that Defense Distributed proved a substantial threat of irreparable injury. Nevertheless, DDTC is tasked by law to regulate the export of defense articles from the country. If the injunction were issued, DDTC would also suffer harm, as it would not be able to perform its lawful duties in preventing foreign nationals from accessing the technical data provided by Defense Distributed via the internet. In the interest of the public, the court found that the harm of an illegal export outweighs the individual harms that Defense Distributed may suffer. Finally, the court found Defense Distributed likely would NOT succeed in its case against the Government. In reviewing Defense Distributed’s case, the court delved into each of the three alleged Constitutional violations.

Violation of the 2nd Amendment:

Defense Distributed alleged that the ITAR regulatory scheme violated their Second Amendment rights. The court disagreed. In very basic terms, the Court ruled that there were no restrictions placed upon the possession of the computer code created by Defense Distributed. Defense Distributed was in possession of the code, and DDTC made no effort to restrict Defense Distributed’s possession of the code. Co-Plaintiff, the Second Amendment Foundation (SAF) argued that by preventing distribution, DDTC violated the possessory rights of its members – that is, the right of SAF members to possess the computer code was restricted by DDTC via the Government’s restriction from publishing the information on the internet. The Court ruled that “SAF members are not prohibited from manufacturing their own firearms, nor are they prohibited from keeping and bearing other firearms. Most strikingly, SAF members in the United States are not prohibited from acquiring the computer files at issue directly from Defense Distributed.” As a result, the 2nd Amendment argument in support of the injunction failed.

Violation of Due Process.

The 5th Amendment to the U.S Constitution provides that no one shall be “deprived of life, liberty or property without due process of law.” In protecting due process rights, U.S. law acts to prevent the mistaken or unjustified deprivation of life, liberty, or property, and enables individuals to contest Government actions that are based upon a vague regulatory scheme. In this case, Defense Distributed argues that the terms “export,” and “defense articles” within the ITAR are vague.

The terms “export” and “defense articles” are defined within the ITAR. Defense Distributed argued that 22 CFR §120.6, the section that defines “defense articles” was too broadly written, to the point that it was unconstitutionally vague. One section to which Defense Distributed quoted included restrictions on information “which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles” which additionally “includes information in the form of blueprints, drawings, photographs, plans, instructions or documentation.” Defense Distributed argued that it cannot determine whether its computer code is regulated under this section of the ITAR.

Similarly, Defense Distributed argued that it cannot determine whether placing its data on the internet would be classified as an export. Exports are defined to include “[d]isclosing (including oral or visual disclosure) or transferring technical data to a foreign person, whether in the United States or abroad.” 22 C.F.R. §120.17(a)(4).

There is no question that reading the ITAR regulations is difficult. The rules of Standard English seemingly do not apply, as sentences run on with multiple commas and semi-colons. Nevertheless, the court determined that placing the computer code on the internet would result in an export, pursuant to the regulatory definition. Similarly, the court found that although the definition for “defense articles” was extensive, the ITAR adequately defined and identified items with significant specificity. As a result, the 5th Amendment due process argument failed.

Violation of the 1st Amendment:

Defense Distributed’s best argument may lie with an alleged violation of the 1st Amendment right to free speech. In addressing First Amendment claims, there are three steps to the analysis:
1. Determine whether the claim involves protected speech,
2. Identify the nature of the forum, and
3. Assess whether the justifications for exclusion from the relevant forum satisfy the requisite standard.

Not all speech is protected. Individuals are not permitted to commit perjury, commit a true threat against others, commit blackmail, engage in defamation, incite actions to harm others, or make obscene materials. Instead, the 1st Amendment allows an individual (or group of individuals) to express their beliefs, thoughts, ideas and emotions about different issues free from government censorship.

The restriction against government censorship is a central issue within this case – if prior DDTC approval is required prior to publication by Defense Distributed, DDTC may have created a censorship scheme in violation of the U.S. Constitution. Prior courts have ruled that “[a]ny prior restraint on expression comes …with a ‘heavy presumption’ against its constitutional validity”; Shuttlesworth v. City of Birmingham, 394 U.S. 147, 150–51 (1969) Similarly, “a system of prior restraint avoids constitutional infirmity only if it takes place under procedural safeguards designed to obviate the dangers of a censorship system.” Collins v. Ainsworth, 382 F.3d 529, 539 (5th Cir. 2004) (quoting Southeastern Promotions, Ltd. v. Conrad,420 U.S. 546, 559 (1975). The prior approval scheme proposed by DDTC in responding to Defense Distributed and again proposed in June 2015 as an amended regulation cannot stand if it violates the 1st Amendment.

In arguing against Defense Distributed, DDTC argued that computer code is not protected speech, as the code is largely unintelligible to most people. The Court found that although Sanskrit is also largely unintelligible to most people, a book written in Sanskrit would be protected. In addition, Defense Distributed sought to distribute the file as open source, allowing others to read, amend, and change the original code. As a result, the court found that the first element of the review was met – the computer code written by Defense Distributed was protected free speech. All parties agreed that the internet was a public forum. As a result the second element of review was met.

In reviewing the third element of review, there are different standards of review. Depending upon the restriction on speech, two possible levels of review are possible. Restrictions that are based upon a content-neutral basis are afforded “intermediate scrutiny,” and will be permissible as long as the restriction is narrowly tailored to serve a significant governmental interest. A content-neutral regulation must allow ample alternative channels for communicating the affected information. Content-based restrictions are examined under strict scrutiny, meaning that the regulation must be narrowly tailored to meet a compelling government interest. Defense Distributed and DDTC disagree as to whether the regulation is content-neutral or content-based.

In determining whether the ITAR is content-neutral or content-based, the court looked to the U.S. Supreme Court, which found regulations to be content-neutral where the regulations are aimed not at suppressing a message, but at other “secondary effects.” The Court found that there is no doubt that the ITAR “clearly regulates disclosure of “technical data” relating to “defense articles,” [and that] the ITAR… unquestionably regulates speech concerning a specific topic.” Nevertheless, the Court found that the ITAR “does not regulate disclosure of technical data based upon the message it is communicating.” As a result, the ITAR was deemed to be a content-neutral regulation, and subject only to intermediate level scrutiny.

Intermediate level scrutiny requires that a “regulation of the time, place, or manner of protected speech must be narrowly tailored to serve the government’s legitimate, content-neutral interests but that it need not be the least restrictive or least intrusive means of doing so.” Ward v. Rock Against Racism, 491 U.S. 781. In this case, the parties agree that there is a substantial governmental interest in regulating the publication and distribution of military related technical data. The only issue at stake is whether the ITAR is tailored sufficiently narrowly to meet the government’s interests in preventing distribution of restricted technical data to persons outside of the United States.

The court determined that the ITAR was sufficiently narrow to meet the government’s interests, and did not infringe upon Defense Distributed’s ability to disseminate the information domestically. In making its ruling, the Court determined that Defense Distributed could use any medium of communication, to include the mail – as long as the chosen medium did not allow for international distribution.

By failing on all three claims within the motion for preliminary injunction, the Court ruled in favor of DDTC.

What’s next?

The most recent court action was only a motion for preliminary injunction. Nevertheless, the hearing was an important view into the Court’s thought process, and how the Court may rule when the full case is heard. Defense Distributed has appealed the motion, and a second hearing on the injunction will be heard at a future date. Surprisingly, a number of groups have come out in support of Defense Distributed, to include the Electronic Frontier Foundation, U.S. Congressman Thomas Massie, the CATO Institute, and the Reporter’s Committee for the
Freedom of the Press.

Restrictions on the export of defense articles have existed since the 1940s. The ITAR was enacted in 1976, and although it is updated from time to time, the regulatory language has never fully addressed the internet. Clearly, the regulation will need to be amended to remain current and applicable in the modern era; the only question will be how to amend the regulation while remaining within the bounds of the U.S. Constitution. Stay tuned, this case is not resolved yet.

Dealing with the U.S. Government is not always the easiest or most straight forward exercise. Numerous Federal agencies are involved in the import and export of arms from the United States – U.S. Customs, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the U.S. State Department, the U.S. Commerce Department, and even the U.S. Census Bureau. The two main agencies are obviously the State Department, and ATF. While both agencies have defined roles in the import and export realm, there are surprising overlaps within the two agencies.

Exports from the United States

When dealing with exports from the U.S., we often talk of ITAR, DDTC, and the U.S. State Department. The U.S. State Department is currently tasked with the review and approval of most export licenses. Centerfire rifles, crew served weapons systems, ammunition, and explosives are all governed by the U.S. State Department. These exports are normally conducted on a DSP-5 export license for permanent exports from the U.S.

One would be led to believe that the U.S. State Department is the de-facto authority on export of firearms from the U.S., but this would not be true. For the export of shotguns, shotgun ammunition, night vision equipment, and some body armor, the U.S. Commerce Department governs. The U.S. Commerce Department has its own forms and license submission process; in general terms, the forms used by the U.S. State Department are not compatible with the forms used by the U.S. Commerce Department in seeking export approval.

To add further confusion to the export process, ATF get involved in the export of firearms governed by the National Firearms Act (NFA.) NFA-regulated firearms are recorded within an ATF managed registry that tracks for all NFA firearms within the U.S., whether assigned to a police department, a firearms dealer, or an individual. When an NFA registered firearm is exported, ATF requires the submission of an ATF Form 9 for export approval. This author has often argued that the ATF Form 9 should be a notice-based submission – ATF should have no discretion to “approve” an export when the U.S. State Department has already given its blessing to the export transaction via an approved DSP-5. As an aside, there is a basis for such notice-based filings, most notably the ATF Form 2, informing ATF that a manufacturer has manufactured an NFA firearm. In an ideal world, an ATF Form 9 would merely serve as notice to ATF that an NFA firearm has been exported, and that the NFA registry needs to be updated to reflect the export. Sadly, this is not the state of the ATF Form 9.

Submission of an ATF Form 9 requires the inclusion of an approved U.S. State Department DSP-5 as a required document. As a result, there’s really no basis for ATF to deny a Form 9 except possibly for errors in descriptions or serial numbers. Nevertheless, under the current regulations, ATF requires an approved Form 9 prior to shipping any NFA firearm from the U.S. Submission of an ATF Form 9 can typically add 30 days or more to the approval process needed for an export transaction.

Imports into the United States

Imports into the United States require (in most cases) an approved ATF Form 6. Bear in mind that there are many exceptions to this rule; far too many to list and cover within this brief space. The ATF Form 6 process is pretty straight forward – licensed importer sends in a completed Form 6 application, the application is reviewed by ATF, and the application is either approved or denied. This is probably the most basic and easiest means of importing firearms into the U.S. Potential issues arise when attempts to import firearms deemed “non-sporting” by ATF are pursued.

The import of NFA firearms into the United States can pose issues for importers. ATF is unlikely to grant an import unless specific documentation is provided from a law enforcement agency or the U.S. Government. This paperwork may not always be available, particularly when firearms are being imported into the U.S. for use within a trade show or exhibition. In some cases, a previously exported firearm may need to be returned to a U.S. manufacturer for repair. In these cases, a temporary import may be better suited to the transaction. Recall however that ATF only governs permanent imports into the United States. Likewise, NFA firearms that are not recorded within the NFA registry (generally) do not require ATF oversight. Instead, for the temporary import of a firearm into the U.S., we turn back to the U.S. State Department for review and approval.

The temporary import of firearms into the U.S. is governed by the U.S. State Department via the DSP-61. Use of the DSP-61 allows importers wide latitude in describing a number of different situations and transactions. As discussed above, the temporary import of a firearm for use and display at a trade show is one use. In the case of NFA firearms transiting the U.S. – namely, from one foreign manufacturer to an end user in a third country, a DSP-61 is needed as a form of transit license. Approval of a DSP-61 in these cases is not automatic, and are sometimes denied.

One experience involving a DSP-61 comes to mind, where a Chinese based manufacturer was legally exporting shotguns to Canada. While legal in both China and Canada, the shotguns met the U.S. definition of a short barreled shotgun. As a result, the shipment required an approved DSP-61 to transit through the U.S. from China to Canada. The sporting shotguns (that is, the shotguns with barrels longer than 18-inches) passed through the U.S. without ATF or State Department involvement or oversight; it was the short barreled shotgun characteristics that invoked State Department governance.

Submission of a DSP-61 was submitted on behalf of the Canadian importer, where it was reviewed and ultimately denied by the U.S. State Department on the basis of foreign policy. The end result required the Canadian based importer to return the shotguns to China and start the shipping process from the beginning, adding significant shipping costs and delays to delivery.

Exemptions from Temporary Import Permits

There are other cases of temporary imports where no import permit is needed for the import of firearms into the United States. Most notable are cases where lawfully exported firearms are delivered to a foreign end user, but later require inspection and/or repair. In these cases, a DSP-61 could be used to affect a temporary import, but there are exemptions within the regulations that allow for faster and more cost effective transactions.

Within the ITAR regulations are temporary import license exemptions. Some of these exemptions may be found at 22 CFR 123.4. Notably, 22 CFR 123.4(a)(1) specifically allows for the import of U.S.-original defense items without an import license where the defense items are to be serviced, inspected, tested, calibrated, or repaired. Use of the 22 CFR 123.4 exemption makes temporary imports into the U.S. easy and convenient – usually one need only reference the regulation during the U.S. Customs clearance process.

Imports and exports to and from the United States are not clearly regulated, and a number of unexpected U.S. Government agencies often get involved in international transactions. Knowing the commodity being shipped, knowing the applicable regulations, knowing how to apply the applicable regulations, and knowing how to structure a transaction all lead to a successful transaction. U.S. export reform is underway, with some aspects of exports being transferred between the U.S. State and Commerce Departments. Sadly, export reform has not come to small arms and ammunition, so these commodities are still governed by the U.S. State Department. At this time there is no discussion of reforming U.S. import controls.

While most U.S. based importers are well versed in the regulations, there are times when an outside expert may be needed. In these cases, a penny spent on prevention may prevent a pound of aggravation. The cost of an expert may add to the final cost of the transaction, but ultimately ease the transaction through the regulatory scheme.

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 HurricaneButterfly.net

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.

As computing systems get more advanced, there are increased opportunities to automate previously mundane or tedious tasks. In automating common tasks, systems are able to better screen data for errors and process data more efficiently than the prior manual systems. The U.S. Government has discovered that automating systems in the import and export arena makes transactions easier and faster, without sacrificing screening and compliance checks. Within the past several years, ATF has implemented an E-forms systems for digital submission of common forms, to include the ATF Form 6 import permit application. Although partially automated, ATF still accepts the bulk of data submissions the old-fashioned way – via written paper submission of forms.

The U.S. State Department has required electronic submission of export license applications for several years, but has gone a step further in that it no longer accepts paper submissions in any form. Initial registration, submission of export licenses, Commodity Jurisdiction requests, and General Correspondence are all now accepted via an on-line electronic portal. It only makes sense that a similar system would be set up for outbound export shipments.

The need to declare outbound export shipments is not new. Prior to AES, the system was paper based, labor intensive, and prone to errors. Launched in 1995, AES is a joint venture between U.S. Customs, the Census Bureau, the U.S. Commerce Department, the U.S. State Department, other Federal agencies, and the export trade community. AES is the system by which an exporter notifies U.S. Customs of a pending export shipment. Export information is collected electronically and edited immediately, and errors are detected and corrected at the time of filing, thereby eliminating reporting errors. Since 1997, AES has been available for all outbound vessels (air or ocean) at all ports throughout the United States.

Until recently, AES was not well known outside of the export industry. It should be noted that AES filings are required for all exports of a commercial nature – regardless of commodity. An AES filing is not limited only to small arms and ammunition. AES filings are required for the export of vehicles, olive oil, and binoculars, for examples. Nevertheless, this article provides examples of AES requirements as it relates to the small arms industry.

Recently, the U.S. State Department, (in its desire to automate all aspects of its operations) determined that temporary exports of firearms outside of the United States must be reported via AES. Previously, hunters heading out of the U.S. would file a CBP Form 4457, and have their firearms inspected by U.S. Customs prior to leaving the country. Upon return, presentation of the completed Form 4457 would be sufficient to allow the firearms back into the country. This scenario changes with the requirement of an AES filing prior to travel. As a portal intended for industry, a basic test must be completed prior to registering for access to the AES portal. Once online, the system is not difficult to navigate with some experience and knowledge of export procedure. For the casual traveler, filing an AES report is not easy, nor practical. Because there is little reason for the casual international hunter to become AES trained, U.S. Customs announced that its officers will help travelers with firearms fill out CBP Form 4457 “to ensure that no traveler attempting to legally take their firearm out of the country experiences significant delays.”

What about permanent exports? Not all firearm parts require an FFL to manufacture. Some firearms, namely those manufactured prior to 1898 (or replicas of pre-1898 firearms,) do not require an export license. While there may be no ATF or State Department oversight over these items, an AES filing would still be required prior to export. As an example: A replica pre-1898 Blunderbuss rifle would require no ATF paperwork to build, and could be exported without an export license from the U.S. State Department. But, if the blunderbuss was shipped outside of the U.S., an AES filing would be required. Similarly, there are export license exemptions for small transaction that do not exceed $500. Filing an AES filing places U.S. Customs on notice that the shipment is outbound, allows U.S. Customs to confirm that the transaction fits within the confines of the exemption, and helps the exporter ensure compliance with U.S. export regulation and law.

Failure to file with AES prior to shipping will often result in seizure of the shipment and a potential fine. The minimum fine levied by U.S. Customs for an AES violation is $500, and escalates upward quickly. Failure to pay the fine usually results in surrender (and loss) of the goods being shipped.

Automation on the part of the Government will continue to increase. Automated systems are getting better at verifying compliance, at a lower cost, and with greater efficiency than manual verification. The AES is but one means for the Government to ensure compliance with export law, whether by verifying the quantity and value of the items being exported, or the proper use of an exemption. The scope of automation sometimes seems to be over-reaching – namely in the case of the temporary export of a firearm by a U.S. hunter. Nevertheless, automation allows Customs and other Federal agencies to focus on more important aspects of law enforcement, and allows U.S. exporters to effectively and efficiently ship their products worldwide.

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 maintains Hurricane Butterfly, an import/export company that assists U.S. firearm manufacturers and foreign buyers wade through the regulatory morass of U.S. import/
export regulations.

The guidance provided within this article was correct and current at the time it was written. Policies and regulations change frequently. 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.

On June 3, 2015, the U.S. State Department published a proposed rule on the publication of firearms related information on the internet. Word of the proposed rules was quick to spread across the internet via on-line firearm discussion forums, firearm industry blogs, and other social media sites online. In light of the proposed restrictions, what’s the big deal? The First Amendment to the U.S. Constitution regulates free speech, with that right applying to the internet. Why the big fuss?

The heart of this issue starts with the creation of the International Trade in Arms Regulations, or the ITAR. Created long before the advent of the internet, the regulations do not contemplate the free exchange of information across international borders at near light speed. Instead, the regulations seek to govern the export of defense articles, defense services, and technical data. Herein, lies the issue – now more than ever, it is possible to transfer sensitive technical data around the world, instantly. When restricted technical data is posted to a public U.S.-based internet forum, there are usually no restrictions on who may visit the forum – Syrians, Iranians, Chinese, and Cubans – countries prohibited from receiving U.S. arms exports under the ITAR suddenly have access to technical data that would otherwise be restricted. To better understand the issue, one must first understand the basics.

What is technical data? Technical data is defined within the ITAR as “information… required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles. This includes information in the form of blueprints, drawings, photographs, plans, instructions or documentation.” (See 22 CFR 120.10) As one can see, this definition is quite broad, and could (if strictly applied) cover almost all online discussion between firearm designers, hobbyists, and enthusiasts. With the definition of technical data clearly defined, why does an online discussion matter to the U.S. State Department?

The ITAR defines an export as the “sending or taking a defense article out of the United States in any manner, except by mere travel outside of the United States by a person whose personal knowledge includes technical data; or… disclosing (including oral or visual disclosure) or transferring technical data to a foreign person, whether in the United States or abroad.” (See 22 CFR 120.17) Publishing technical data on a U.S. based website could result in the disclosure of technical data to a foreign person that happens upon the internet forum. Indeed, there are many known foreign users on AR15.com and subguns.com, two well-known internet venues for the discussion of firearms. Both websites promote the vigorous debate and discussion of firearm design, usage, and modification.

Thankfully, not all discussion about firearms is regulated. Under 22 CFR 120.11, there are exemptions for information in the public domain. The ITAR defines the public domain as “information which is published and which is generally accessible or available to the public… through sales at newsstands and bookstores; through subscriptions which are available without restriction to any individual who desires to obtain or purchase the published information; or [information found] at libraries open to the public or from which the public can obtain documents.” Note that 120.11 does not mention the internet – there was no internet when the regulations were first drafted, and section 120.11 has never addressed the internet and information disclosed via the internet. That is, at least not until June 3, 2015, when the U.S. State Department proposed new rules regarding public domain and disclosure of technical data.

The “modern” internet was created in 1990. On-line forums focused on the discussion of firearms date back to at least 1995, when F.J. Vollmer created a website to discuss NFA (National Firearms Act) firearms. AR15.com was formed shortly thereafter in 1996. After nearly 20 years of online discussion, why the recent interest in online firearm discussions? In December 2012, a Texas based educational organization named Defense Distributed published files for the creation and manufacture of a single shot pistol manufactured entirely via a three-dimensional printer. Unlike other written forms of publication, the files were published online. In response, on May 8, 2013, DDTC sent notice to Defense Distributed that read, “DTCC/END is conducting a review of technical data made publicly available by Defense Distributed through its 3D printing website, DEFCAD.org, the majority of which appear to be related to items in Category I of the USML. Defense Distributed may have released ITAR-controlled technical data without the required prior authorization from the Directorate of Defense Trade Controls (DDTC), a violation of the ITAR.”

Defense Distributed removed the files from its servers, but not before the files had been downloaded more than 100,000 times. Based upon the original file, additional CAD files have reportedly been developed increasing the strength and reliability of the single shot pistol.

First Amendment Considerations and Pre-Publication Approval of Technical Data

From 1969 to 1984, there was a presumption that ITAR Section 125.11 imposed a prepublication approval requirement for privately generated ITAR-controlled technical data. The regulation at the time noted that “[t]he burden for obtaining appropriate U.S. Government approval for the publication of technical data falling within the definition in § 125.01, including such data as may be developed under other than U.S. Government contract, is on the person or company seeking publication.”

In 1978, the U.S. Department of Justice’s Office of Legal Counsel issued a series of written opinions advising Congress, the White House, and the Department of State that imposing a prior restraint on publications of privately generated unclassified information into the public domain violated the First Amendment of the U.S. Constitution. As a result, in 1980, the Department of State Office of Munitions Control, (the predecessor to DDTC) issued official guidance that section 125.11 did not require pre-publication approval for publication of technical data within the United States. (Emphasis added.) ITAR section 125.11 was later amended to make clear that there is no pre-publication requirement, in accordance with the U.S. Constitution.

Are the Defense Distributed Files Technical Data?

Are the Defense Distributed files technical data? Therein lies the issue. If the files are not technical data, the files can be freely distributed without ITAR restriction. If the files are deemed technical data, there are ITAR restrictions on distribution, notwithstanding the public domain exemption. In response to DDTC’s order to remove the files, Defense Distributed sent a commodity jurisdiction request to DDTC and the Department of Defense Office of Prepublication Review and Security (DOPSR). Together, the two agencies are tasked with determining whether data submitted for review is ITAR controlled. As of publication, and more than two years after the commodity jurisdiction request was submitted, no determination has been made by DDTC or DOPSR. Without a determination that the files are technical data, there can be no analysis or determination of whether the public domain exemption fits the Defense Distributed case.

The Defense Distributed files are very likely to be classified as ITAR controlled technical data. Recall that technical data is “information required for the manufacture or assembly of a defense article.” A single shot pistol is classified as a defense article under the U.S. Munitions List Category I (a).

The Defense Distributed files were exported under the definitions of the ITAR. The export of technical data (under the current regulations) easily occurs via the internet. It is not hard to imagine the transfer of a CAD file or blueprint showing the critical dimensions of a firearm from the United States to a foreign national via e-mail. Notwithstanding the ease in which the transfer may happen, the transfer of technical data to a foreign national is a regulated act under the ITAR. Technical data is ITAR controlled. Transfer of technical data to a foreign national is an “export” under the regulations. The export of technical data requires DDTC approval prior to transfer.

Does the public domain exemption cover Defense Distributed? Possibly. Note that the 1980 guidance removes the requirement for pre-publication approval of technical data within the United States. The guidance predates the modern internet by at least ten years, and could not possibly contemplate the modern capability of transferring information instantly throughout the world. Defense Distributed may have created a better case had they published the files within this magazine, or on an established firearm publication’s website. Nevertheless, most public libraries offer access to the internet, and there are many examples of publications that exist solely online. Can the internet be public domain? Possibly – but if the internet is public domain, anything published online is not outside of the current ITAR regulation on export and transfer of ITAR governed technical data. The proposed changes to internet publication by the U.S. State Department on June 3, 2015 are meant to address this issue.

What about the First Amendment issues? There are generally two ways in which free speech within the United States may be restricted. Regulations may be imposed upon the time, place, and manner of expression, but the restrictions imposed must be content-neutral, the restrictions must be narrowly tailored to serve a significant government interest, and the restrictions must leave open ample alternative avenues of communication. Restrictions on content (as being contemplated by the U.S. State Department proposed change to the ITAR) may be permissible if the restriction passes “strict scrutiny.” Strict scrutiny requires the government to show that the restriction serves “to promote a compelling interest” and is “the least restrictive means to further the articulated interest.” It is unlikely that DDTC can overcome the strict scrutiny threshold under the current proposed regulation language.

Why Does This Matter to the International Community?

In strict terms, the proposed rulemaking only applies to U.S. citizens and U.S.-sourced technical data. A firearms enthusiast in New Zealand, the Netherlands, or the Philippines is free to post technical data from their home countries without restriction as long as the technical data is not U.S.-based or sourced. Sadly, the U.S. State Department takes a skewed view of international jurisdiction. When exporting a defense article, DDTC takes the position that it retains jurisdiction over the re-transfer and/or sale of the item for the life of the item. As an example, a rifle exported to Canada, and resold to the Netherlands requires (under U.S. law) DDTC re-transfer approval. The transaction could be many years old – yet DDTC asserts that it retains jurisdiction over re-transfer. The same policy would also apply to the re-transfer of technical data.

Major allies are typically quick to follow U.S.-based regulations. In countries without First Amendment protections, adoption of similar regulations and policies would have a chilling effect on the discussion of firearms in online forums.

What Happens Next?

What happens next? Defense Distributed filed a lawsuit against DDTC and DOPSR on May 6, 2015, seeking a determination of whether its files are ITAR restricted technical data, and seeking a determination that pre-approval of free speech within the U.S. is not permitted by the U.S. Constitution. Motions for preliminary injunctions from both parties are scheduled throughout the summer. Litigation in this case is likely to take quite some time to be resolved. In the meantime, the proposed regulatory changes to the ITAR are located at 80 FR 31525, and online here: http://www.gpo.gov/fdsys/granule/FR-2015-06-03/2015-12844. Comments (for or against the proposed change) were accepted by the U.S. State Department through August 3, 2015. Updates on this issue will be published here in future issues as the case matures and develops.

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.

Firearms, like most mechanical items, occasionally break. Parts can fail, and barrels become worn. If the firearm was made in the United States and is used domestically, there’s usually no issue in getting the firearm repaired. The owner finds a competent gunsmith to effectuate the return, or contacts the manufacturer. But what happens when the firearms has been exported out of the U.S.? How does a foreign firearms owner fix a U.S. made rifle when there may not be an overseas service center or competent gunsmith available?

For years, critics have accused Remington Firearms of designing a defective trigger for the Model 700 rifle. Multiple class action lawsuits have been filed against Remington, seeking a repair or recall of the alleged defect. On April 16, 2015, a preliminary agreement was approved in U.S. Federal Court by U.S. District Judge Ortrie Smith. The preliminary agreement endorses a settlement of several class-action lawsuits filed by consumers who said the Model 700 and other Remington rifles are defective and dangerous.
It is important to note that this is a preliminary settlement. Remington does not admit the trigger mechanism is defective and denies any wrongdoing. In addition, Remington’s offer to replace the trigger mechanisms on millions of rifles won’t be final until Smith issues a final order after a hearing scheduled in December 2015. The proposed rifles include the Remington bolt-action model 700, Seven, Sportsman 78, models 673, 710, 715, 770, 600, 660, XP-100, 721, 722 and 725 rifles, and could total over 7.85 million firearms. Without question, some of these firearms were exported out of the United States.

Thankfully, Remington maintains a robust international service and repair network. A full list of international service centers may be found on Remington’s website at: http://www.remington.com/pages/support/parts-information/international-authorized-repair-centers.aspx

Nevertheless, not every U.S. firearm manufacturer maintains an international network of repair centers. What happens if a firearm needs to be returned to the U.S. for repair? How does one temporarily import (and presumably, re-export) a rifle made in the U.S.?

The U.S. State Department governs the import and temporary import of ITAR restricted items into the United States. In contrast, the U.S. Department of Justice, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) governs the permanent import of firearms into the U.S. Since the subject firearm would be coming into the U.S. for repair and being returned to the owner, a temporary import would apply. It is important to note that although this article discusses the temporary import of firearms, the same guidance may also apply to other ITAR restricted items, such as ITAR regulated optics or electronics.

Perhaps the easiest method of temporarily importing a firearm into the U.S. is use of an import permit exemption. Firearms made and exported from the U.S. may be temporarily imported back into the U.S. under 22 C.F.R. 123.4(a)(1). Imports under a 123.4(a)(1) exemption are fairly easy – as long as the basic requirements are met. The firearms being returned must be of U.S. origin. In addition, the customs entry into the U.S. must reflect that the goods are being imported under exemption. If the firearms do not enter the U.S. properly under exemption, an export permit may be required to subsequently return the firearms to their foreign owner. While in the U.S., the firearm may be serviced, to include inspection, testing, calibration or repair, including overhaul, reconditioning and one-to-one replacement of any defective items, parts or components. The temporary import may not be enhanced, upgraded, or otherwise altered to change he basic performance of the item. Finally, the temporary import must be returned to the country from which it was imported.

In terms of cost, items imported under a 123.4(a)(1) exemption will not be subject to A U.S State Department license application fee. Shipping charges and customs clearance fees will likely apply. As the customs entry is very specific and nuanced, the cost for customs clearance may be slightly greater than a more common type of entry, especially if U.S. Customs agents are not familiar with the requirements of the exemption.

What about cases where the import will be upgraded and enhanced, or is not of U.S. origin? In these cases, a DSP-61 temporary import license would be appropriate. The application for a DSP-61 is scrutinized by the U.S. State Department, and requires that the applicant describe the transaction with appropriate documents. The required documents will vary depending upon the work to be performed and the type of article being imported. In general terms, U.S. State Department will ask for documents describing the 5 Ws: Who, What, Where, Why, and When. In other words: Who owns the item being imported into the U.S.? Who will perform the work? What work is being performed, and how will the item be enhanced or upgraded? Why does the work need to be performed? When will the item be re-exported from the United States? Answering these questions with documents that describe the transaction will likely result in the U.S State Department agreeing to review (but not necessarily approve) the temporary license application. The license fee is $250, and once approved, the temporary import license is good for four years.

As noted above, shipping charges and customs clearance fees will apply to either type of import. In some cases, the shipping charges may be significant. In the case of a defective rifle, the shipping costs alone may far exceed the value of the rifle being shipped.

Readers are cautioned against looking to 22 CFR 123.28 as a possible exemption to allow the export of repair items. On March 11, 2011, the U.S State Department proposed a rule allowing the export of parts for the repair of previously-licensed US-origin defense articles. Although proposed, the rule never took effect, and as of publication, has not been implemented. There are other exemptions within the International Traffic in Arms Regulations (ITAR) that may fit individual situations. As with all exemptions, the rule must fit the situation exactly, and responsibility for using the exemption properly lies with the U.S. party relying upon the exemption.

The required supply and logistics for the repairs proposed by Remington are massive, and will likely take years to complete. Thankfully, Remington has the resources to accomplish such a gigantic task – to include international service centers that can perform the necessary repairs. Thankfully, there is a means by which the repairs can be made for foreign owners of the affected Remington firearms. For others, take comfort in knowing that if a U.S. made firearm is damaged or needs repair, it can come back into thhe United States with a minimum amount of hassle and paperwork.

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 maintains Hurricane Butterfly, an import/export company that assists firearm manufacturers and foreign buyers wade through the regulatory morass of U.S. import/export regulations.

The guidance provided within this article was correct and current at the time it was written. Policies and regulations change frequently. 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.