After the new rules become effective, non-automatic and semi-automatic firearms, components, ammunition and certain other items that currently require an ITAR export license will still require an export license in most instances but under the more flexible rules of the EAR. 1. Such is the President’s resolution to restrict the citizens’ right to acquire firearms that he has proposed changes to ITAR Regulations. Obtaining licenses (called “approvals”) from the State Department prior to engaging in certain brokering transactions; The prohibition against engaging in transactions involving defense articles with the “proscribed countries” listed in ITAR §126.1; and. The requirement to obtain export licenses for the export of such items; The requirement to obtain export licenses for the export of controlled technology and the transfer of such technology to foreign persons in the U.S. (called a “deemed export”) including to employees of your company; The requirement to obtain licenses for reexports and transfers in foreign countries of controlled items; While Commerce does not formally regulate defense services as defined under the ITAR, Commerce has stated on many occasions that in performing services for a foreign party a U.S. person may transfer controlled technology, and as such the performance of services related to controlled products, technologies or software may require BIS authorization if controlled technology is transferred in the process; Restrictions on selling/transferring items to parties on the BIS restricted party lists including the Entity List (think Huawei and ZTE), the Denied Persons List and the Unverified List; If a product is manufactured abroad that incorporates a controlled U.S. component or is “bundled” with controlled U.S. software, if the value of the controlled U.S. items exceed the. Ammunition preassembled into links or belts. If a company is not sure of the classification of its product, or if it wants a higher level of assurance, it can file a Commodity Jurisdiction request (for ITAR items) or a Commodity Classification Automated Tracking System request (CCATS) (for EAR items) and obtain written confirmation of its product classification. These regulations are regularly updated and revised to reflect change in the international political and security climate, as well as technological development. Some Part 129 brokering rules continue to apply to firearms moved to the CCL by adding a reference to the ATF’s United States Munitions Import List (USMIL). ITAR revisions also include conforming changes throughout where references to firearms needed to be removed or updated. This regulation includes most of the principal types of controls that applied under ITAR. Accordingly, such technology and software is prohibited from being posted on the internet unless an export license is obtained under the EAR. On January 23, 2020, the State and Commerce Departments published their long-awaited final regulations on the transfer of certain firearms, ammunition, components and accessories from controls under the International Traffic in Arms Regulations (“ITAR”) to the Export Administration Regulations (“EAR”). Munitions List (USML). Also, if controlled U.S. technology is “comingled” with foreign technology abroad, if the value of the controlled U.S. technology exceeds the de minimis level in EAR §734.4 the comingled technology becomes subject to the EAR and U.S. export requirements may apply to the comingled technology in the foreign country. The move from ITAR does not change any significant gun control laws in America. Reporting and recordkeeping requirements. On May 24, 2018, the Departments of State and Commerce published proposed revisions to U.S. ITAR goes well beyond firearms and ammo, it includes aircraft, ships, technical data and information technology as well as. 4. The United States Munitions List … Note that there are certain commodities, software and technologies for which no de minimis treatment is permitted under EAR §734.4. Gun barrels, rails, tubes, and receivers specially designed for the weapons controlled in paragraphs (a) and (d) of the revised USML category II. From ExportLawBlog:  An article on the CTV website today revealed that. After months of comments and delays, it appears that certain firearms, guns, ammunition and accessories will move from the Department of State United States Munitions List (USML) to the Department of Commerce, Bureau of Industry and Security, Export Administration Regulations (EAR). [2] Certain activities are excluded from the definition of “brokering activities” in ITAR §129.2(b)(2). For example, the following items will still be ITAR-controlled after the adoption of the amendments: For items transferred to the EAR, in certain cases parts, components and accessories will be placed on the CCL and be subject to licensing requirements, while others may be classified as EAR99 and not require a license under CCL-based controls. But moving (some) firearms from the USML/DOD/ITAR is a really good sign that a regulatory burden for FFLs has been lifted. Up until this change, the Department of State regulated exports of most firearms and their related parts, ammo, and information through their International Traffic in Arms Regulations (ITAR) which contain a list of covered firearm types called the United States Munitions List (USML). After review, the Defense Department, in conjunction with the Departments of State and Commerce, concluded that the firearms in this proposed rule also do not provide a critical military or intelligence advantage to the United States, are not the types of weapons that are almost exclusively available from the United States, and are manufactured from “technology” that is widely available. However, you will need to start this process right away due to the tight time deadline for implementation. Communicate recent and upcoming changes in DECCS to the members of the User Group. In its rule, DDTC significantly reduced the number of items controlled by Categories I–III of the USML. 2. The following are a number of important points to recognize about the amendments. DDTC has a highly effective and well-respected compliance staff (the Office of Defense Trade Controls Compliance), focused principally on investigating civil ITAR violations. ITAR and what constitutes the export and import of defense-related articles and services on the United States Munitions List (USML) is interpreted and controlled by the Department of State, Directorate of Defense Trade Controls (DDTC). Here is the latest update matrix from DDTC as of Today. Parts, Accessories and Attachments Are Treated in Many Different Ways. But moving (some) firearms from the USML/DOD/ITAR is a really good sign that a regulatory burden for FFLs has been lifted. The New Changes Become Effective Quickly – Get Ready Now. The new Commerce amendments also specifically address placing controlled firearms technology on the Internet. The new regulations become effective on March 9, 2020. This proposed rule is being published simultaneously with a proposed rule by the Department of State that would revise Categories I, II, and III of the USML to describe more precisely the articles warranting continued control on that list. ITAR are the State Department controls that regulate defense products and services. The new Commerce amendments add a number of specific ECCNs covering technology related to firearms including: 0E501, 0E502, 0E504, 0E505, 0E602 and 0E982. It removes almost all commerical firearms from the USML, which means we don't have to register with the State Department, don't have to pay the fee, and can follow the more relaxed export rules of the Commerce Departent. 3. Specifically, DDTC amended Categories I, II and III of the U.S. However, instead of dealing with the ITAR rules and State Dept licensing, the firearms industry will be able to use the more efficient export system through the Department of Commerce for most firearms. These sections are amended because they all refer to firearms that are now controlled on the CCL. The International Traffic in Arms Regulations ("ITAR," 22 CFR 120-130) implements the AECA. The USML includes all rifles, handguns, and short barreled shotguns (those with a barrel length less than 18″). Fully automatic firearms (including firearms under .50 caliber (12.7 mm)) and fully automatic shotguns; Many guns greater than .50 caliber (12.7mm) including guns, howitzers, artillery, cannons and grenade launchers; Ammunition for guns and armaments controlled under the new USML Category II; Caseless ammunition manufactured with smokeless powder; Certain “tracer” ammunition employing pyrotechnic material; and. What are the common ITAR violations? In light of the broad scope of these requirements, any company that is engaged in an international firearms transaction, even as a sales agent, consultant, advisor or other intermediary, should be familiar with the ITAR brokering regulations. It seems different training companies are putting out different effective dates. Will firearms (finally) change under Export Control Reform? BIS also recommends that companies adopt controls within their computer networks to prevent foreign national employees from being able to access controlled technology in the company’s computer system, as well as to prevent all employees from inadvertently exporting controlled technology and software in laptops, iPhones and PDAs when traveling outside the U.S. Firearms and Related Products Will Still Be Heavily Regulated Under the U.S. While many firearms parts, components, accessories and attachments are being transferred to the EAR, many will still be regulated under ITAR. The USML includes all rifles, handguns, and short barreled shotguns (those with a barrel length less than 18″). If a party is brokering or assisting others in the sale of foreign-made firearms, even just the commencement of the negotiations may require ITAR registration and advanced DDTC approval – it is not necessary to close the sale for requirements to apply. While most firearms .50 caliber and under will no longer be on the USML, they will still be listed on the USMIL and hence the “brokering” of such products will continue to be regulated by the State Department under ITAR. About a year ago we reported on the possibility of easing the burden on Federal Firearms License (FFL) holders in terms of the International Trafficking of Arms (ITAR) regulatory requirements. Current regulations require firearms manufacturers to pay a minimum of $2,240 per year in ITAR fees even if they have no intention to export weapons outside of the United States. [2]  If a party engages in “brokering activities” it will be subject to a number of requirements including: Under the recent amendments, the ITAR brokering regulations were revised to exclude activities by persons to facilitate the manufacture in the United States or export of items subject to the EAR. This proposed rule describes how articles the President determines no longer warrant control under United States Munitions List (USML) Category I—Firearms, Close Assault Weapons and Combat Shotguns; Category II—Guns and Armament; and Category III—Ammunition/Ordnance would be controlled under the Commerce Control List (CCL). Note:  This article contains general, condensed summaries of actual legal matters, statutes and opinions for information and education purposes. Generally, “technology” includes designs, drawings, specifications, technical manuals and similar technical information related to controlled products in both tangible and intangible form (including technical information in spreadsheets, PowerPoint slides, e-mails, Word documents and CAD/CAM drawings). 3/5/19. This is an extremely short time period - much shorter than was provided in the past for many other USML amendments. On January 23, 2020, the Trump administration published new rules that will significantly help the U.S. firearms industry and American gunsmiths. The firearms exemptions formerly at § 123.17(a) through (e) are removed and the subsections reserved as a consequence of the removal from the USML of non-automatic and semi-automatic firearms and their transfer to the CCL. It will take some time to read through the final rule (which has yet to be entered into the Federal Register) and determine the actual changes for FFLs. The new regulations provide many benefits for firearms industry companies, provided they properly prepare to take advantage of them. Prior to ECR, many common-use firearms and ammunition were controlled by the International Traffic in Arms Regulations (ITAR) —i.e., a set of rules which regulates various items and activities related to … ITAR Firearms Amendments - Six Important Points You Need to Know, ITAR, Export Controls and Economic Sanctions. In addition, restrictions may apply, and licenses required, for the transfer of controlled technology to foreign nationals in the U.S. (called a “deemed export”), including to employees within your own company. The EAR will also regulate certain “technology” related to the newly- transferred firearms products that become subject to the EAR. Under the proposed changes, fully automatic firearms and other weapons controlled by the National Firearms Act (NFA) will remain under the USML. However, they still apply to most foreign manufactured firearms products. There are proposed changes to ITAR (International Traffic in Arms Regulations) on the table right now that could be bad for the way firearms related content is distributed on the internet and possibly magazine publications. However there is another important area of regulation that applies to the firearms industry as well – the International Traffic In Arms Regulations (“ITAR”). And, firearms are still regulated for exports. If an article satisfies one or both of those criteria, the article remains on the USML. Thus, manufacturers and distributors of these products will have to work quickly to determine how the new amendments will apply to their particular products. The major proposed change to Category I includes the removal of non-automatic and semi-automatic firearms to caliber.50 (including all their parts, components, accessories, and attachments specifically designed for them). The U.S. firearms industry is regulated under the National Firearms Act, Gun Control Act and other federal and state firearms laws. If an article does not satisfy either criterion, it has been identified in the new Export Control Classification Numbers (ECCNs) included in this proposed rule. However, the BIS Office of Export Enforcement, which focuses on EAR violations, is a much larger organization with agents in eight field offices across the U.S. and authority to carry firearms, make arrests, execute search warrants, serve subpoenas, detain and seize goods and investigate both civil and criminal violations. Due to the time periods required for determining export classifications for products, determining new licensing requirements, obtaining export licenses and amending compliance procedures, companies will have to move quickly to remain in compliance and avoid costly violations. The new regulations officially take effect on March 9, 2020. It is critical to remember that while the firearms covered under the amendments will no longer be subject to ITAR, they will still be subject to significant regulation by the Commerce Department under the EAR. The changes described in this proposed rule and in the State Department’s companion proposed rule on Categories I, II, and III of the USML are based on a review of those categories by the Department of Defense, which worked with the Departments of State and Commerce in preparing the amendments. The regulations are complex. Effective March 9, 2020, the firearms and ammunition described below will be transitioned from the International Traffic in Arms Regulations (ITAR) to the Export Administration Regulations (EAR) under new Export Control Classification Numbers (ECCNs), resulting in … From what I understand from my (limited) understanding of US laws and regulations there is going to be some major changes coming into effect from march 9th that will significantly change the way exporting firearms and firearm parts from the US will be handled. ITAR CHANGES. Also, under ITAR §129.7 and §126.1(e) no person may engage in or make a proposal to engage in brokering activities (or the direct sale of USML items) that involve a “proscribed country” listed in ITAR §126.1 – and if a party becomes aware of such activities that involve a “proscribed countries” he/she is required to immediately disclose the occurrence to DDTC under ITAR §§129.7 and §126.1(e). While most firearms .50 caliber and under will be regulated under the EAR, the ITAR brokering regulations will still apply to these products. Included in the reforms is the transfer of responsibility for the export of most firearms and ammunition from the Department of State to the Department of Commerce. (The Directorate of Defense Trade Controls (“DDTC”) and Bureau of Industry and Security (“BIS”) provided 180-day transition periods for transfers of items from the USML to the CCL for other USML categories under export control reform.). The ITAR brokering regulations are a broad set of requirements that place controls on performing “any action on behalf of another to facilitate the manufacture, export, permanent import, transfer, reexport, or retransfer of a U.S. or foreign defense article or defense service, regardless of its origin. These items will be transferred from the United States Munitions List (USML) under the jurisdiction of the Department of State’s Directorate of Defense Trade Controls (DDTC) to the Commerce Control List … ITAR For FFLs – End Of USML Control For Certain Firearms, Guns, Ammo Munitions Import List (the “USMIL”). Export Laws, Even After the Amendments. [1] Similarly, if controlled U.S. software is “comingled” with foreign-made software abroad, if the value of the controlled U.S. software exceeds the de minimis level in EAR §734.4 the comingled software becomes subject to the EAR and U.S. export requirements may apply to the comingled software in the foreign country. BIS believes the control of these firearms under the EAR is justified because the firearms described in this proposed rule are either not inherently military or do not warrant the obligations that are imposed under the ITAR pertaining to such items. Because of the popularity of shooting sports in the United States, for example, many large chain retailers carry a wide inventory of the firearms described in the new ECCNs for sale to the general public. In addition, possible Federal rule changes would broadly move firearms and ammunition out from ITAR regulation. Generally speaking, it appears that the proposed rule changes will make Federal law more tolerant, so that producers of small firearms accessory parts would no longer have to register as ITAR manufacturers (with hefty annual fees). Additionally, this final rule makes conforming changes to several sections of the ITAR that referred to the control of articles formerly in USML Category I(a). Also, various components, accessories and attachments transferred to the EAR will be classified under a variety of different ECCNs or possibly become EAR99. It will take some time to read through the final rule (which has yet to be entered into the Federal Register) and determine the actual changes for FFLs. Firearms available through U.S. retail outlets include rim fire rifles, pistols, modern sporting rifles, shotguns, and large caliber bolt action rifles, as well as their “parts,” “components,” “accessories” and “attachments.”, Editor In Chief- TFB Who enforces it? Munitions List (USML) Categories I, II, and III in the Federal Register. 5. For a small FFL manufacturer who mainly engages in gunsmithing or builds a few guns, a $3,000 fee for not exporting a single item can cut into their bottom line. The new rules also eliminate a punitive annual $2,250 registration fee that gunsmiths and small companies who do not manufacture, nor export firearms or ammunition products were forced to … There seems to be a lot of rumors in regards to the time-frame of the upcoming ITAR changes. These changes would even interfere with the way that content relating to firearms and ammunition could be distributed and published on the internet and in print publications. ITAR Brokering Regulations Still Apply to Transferred Firearms. This change in policy is expected to go into effect by Summer 2019. 6. [email protected], reported on the possibility of easing the burden on Federal Firearms License, Control of Firearms, Guns, Ammunition and Related Articles the President Determines No Longer Warrant Control Under the United States Munitions List (USML). Commerce also issued companion regulations to establish controls for the newly transferred items under the EAR. BIS has created ECCNs, referred to as the “600 series,” to control items that would be removed from the USML and controlled under the CCL, or items from the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual Use Goods and Technologies Munitions List (Wassenaar Arrangement Munitions List or WAML) that are already controlled elsewhere on the CCL. While the details may be changed (such as export classification numbers and procedures for filing license applications), the majority of responsibilities for U.S. exporters will remain the same. The newly adopted EAR §734.7(c) provides as follows: (c) The following remains subject to the EAR: “software” or “technology” for the production of a firearm, or firearm frame or receiver, controlled under ECCN 0A501, that is made available by posting on the internet in an electronic format, such as AMF or G-code, and is ready for insertion into a computer numerically controlled machine tool, additive manufacturing equipment, or any other equipment that makes use of the “software” or “technology” to produce the firearm frame or receiver or complete firearm. Companies should expect that the risk of enforcement actions are likely to be greater under Commerce than State and plan accordingly. This week the Trump Administration is set to finalize new rules which will ease the regulatory and licensing burden on manufacturers of commercial firearms, ammunition and associated products. Silencers, mufflers and sound suppressors; Barrels, receivers (frames), bolts, bold carriers, slides and sears “specially designed” for the items covered under the newly revised USML Category I (a), (b) and (d); Drum and other magazines for firearms to .50 caliber (12.7 mm) inclusive with a capacity greater than 50 rounds, regardless of jurisdiction of the firearm, and specially designed parts and components therefor; Parts and components specially designed for conversion of a semiautomatic firearm to a fully automatic firearm; Accessories or attachments specially designed to automatically stabilize aim (other than gun rests) or for automatic targeting, and specially designed parts and components therefor; Parts and components specially designed for defense articles described in newly revised Category I (c) and (e); Certain ammunition handling equipment; and. Controls on technology are one of the most challenging (and dangerous) aspects of export compliance. Thus if a U.S. person (including its foreign subsidiaries and in some cases foreign persons) contemplates becoming engaged in transactions involving foreign-made firearms (including firearms .50 caliber and under) and ammunition it should review the ITAR broker regulations carefully to determine if any ITAR requirements apply to the transaction. The DECCS User Group was approved by OMB under the authority of “Generic Clearance for the Collection of Routine Customer Feedback” (OMB Control Number: 1405-0193) Who should be involved? Section 123.17 is renamed “Exem… On January 23, 2020, the State and Commerce Departments published their long-awaited final regulations on the transfer of certain firearms, ammunition, components and accessories from controls under the International Traffic in Arms Regulations (“ITAR”) to the Export Administration Regulations (“EAR”). Submitted by tharris on February 6, 2020 - 1:46pm. Requirements under the EAR that will apply going forward in many types of firearms industry transactions include the following: Also, many firearms industry products will continue to be regulated under ITAR after adoption of the amendments, including for example: Thus while a few of the requirements under ITAR are eliminated (such as the registration requirement) most of the general compliance requirements will continue, except administered through a different agency. The ITAR changes will ease the burden on the firearms industry by placing some common small arms, like semiautomatic rifles, under the control of the Department of Commerce Export Administration Regulations (EAR) instead of the State Department’s U.S. It is not intended and should not be construed as legal advice. Penalties are significant – the penalties under the EAR are effectively the same as ITAR – up to $1,000,000 in fines and 20 years’ imprisonment.
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