DEPARTMENT OF THE TREASURY BUREAU OF ALCOHOL, TOBACCO AND FIREARMS WASHINGTON, DC 20226 January 17, 1997 OPEN LETTER TO FEDERALLY LICENSED FIREARMS IMPORTERS AND REGISTERED IMPORTERS OF U.S. MUNITIONS IMPORT LIST ARTICLES The Bureau of Alcohol, Tobacco and Firearms (ATF) is committed to keeping industry members informed of regulatory and statutory developments that affect them. In furtherance of this commitment we have prepared this open letter, which contains a wide range of items that may directly or indirectly affect your day-to-day operations and/or long range plans. We hope you will find this letter helpful in your business pursuits. BRANCH UPDATE The Firearms and Explosives Import Branch personnel now have voice- mail messaging capabilities. It is now possible for industry members to leave messages 24 hours a day, 7 days a week. We are pleased to announce that we now have our own facsimile machine within the Branch. The number is (202) 927-2697. We recognize that from time to time, you may need to meet with Branch personnel to discuss questions, permit applications, unique import situations, or perhaps to voice concerns or problems you may have. To help meet your needs, our Branch personnel are ready and willing to meet with industry members here in our Headquarters facility. We recommend you schedule your visits in advance to help ensure the party with which you wish to meet will be available to you. In addition, Branch personnel may also be available to come and give presentations or seminars on import procedure to your company personnel. ATF now has a home page on the Internet. Our address is http://www.atf.ustreas.gov/firearms. Anyone with Internet access may logon to read a variety of items of interest, such as current firearms related notices of proposed rulemaking, industry circulars, ATF rulings, reference library, etc. RUSSIAN FEDERATION As most of you are aware, the Department of State provides guidance to ATF in relation to ATF's administration of the import provisions of the Arms Export Control Act (AECA), 22 U.S.C. section 2778. State Department direction is provided in matters affecting the foreign policy and national security interests of the United States. This is most evident in their administration of the proscribed country list, which appears in 27 CFR 47.52(a). - 2 - In a letter dated April 5, 1996, the Department of State advised ATF that subject to terms of an agreement executed by the Russian Federation and the United States on April 3, 1996, it is no longer the policy of the United States to deny licenses or other approvals for exports or imports of defense articles and defense services, destined for or originating in, the Russian Federation. In response, ATF published a notice in the Federal Register on April 29, 1996, announcing the implementation of that agreement, which restricts the exportation of firearms and ammunition from the Russian Federation (Russia) to the United States. The agreement restricts firearms exports from Russia (regardless of country of manufacture) to the United States to only the firearms enumerated in Annex A of the agreement. It prohibits the export from Russia of the one type of ammunition enumerated in Annex B of the agreement. The letter further directed ATF to deny applications requesting authority to import any Russian or former Soviet Union- made firearm or firearm component part from any location int he world into the United States if the firearm is not authorized to be exported from Russia to the United States under Annex A of the agreement. A reprint of our April 29, 1996 Federal Register document, which contain the entire agreement and Annexes A and B, is enclosed for your reference. The regulation in 27 CFR Part 47 are being revised to reflect these changes in foreign policy. OTHER NEWLY INDEPENDENT STATES OF THE FORMER SOVIET UNION By letter dated June 24, 1996, the Department of State directed ATF to apply the terms, restrictions and prohibitions of the agreement between Russia and the United States referenced above to the non- Russian newly independent states once those countries have been removed from the proscribed countries list. The letter advised that the State Department would notify ATF when a decision has been made to remove from the list of proscribed countries any of the newly independent states. By letter dated August 12, 1996, the Department of State notified ATF of the removal of Georgia, Moldava, Kazakstan, Krygystan, Turkmenistan and Uzbekistan from the list of proscribed countries in State Department regulations relating to export of defense articles, and by letter dated September 10, 1996, notified ATF of the removal of Ukraine. Consistent with ATF's authority over the importation of defense articles, the Department of State requested that ATF amende the list proscribed countries in 27 CFR Part 47 to remove these countries, subject to the restrictions in the June 24, 1996 letter. Based upon the above, Form 6 applications to import firearms or ammunition from any of the newly independent state listed above will be evaluated under the terms of the April 3, 1996, agreement between Russia and the United States. The regulations in 27 CFR Part 47 are being revised to reflect these changes in foreign policy. The specific application of the policy has the following results for importers. The Department of State directed ATF to deny applications to import firearm and ammunition located (regardless of the country of manufacture) or manufactured in the newly independent states of the Former Soviet Union that are not listed in Annex A to the April 32, 1996, agreement between Russia and the United States. The - 3 - Department of State also directed ATF to deny applications to import ammunition located (regardless of the country of manufacture) or manufactured in the newly independent state of the Former Soviet Union that is listed in Annex B to the April 3, 1996, agreement. COMPONENT PARTS FOR U.S. MADE MILITARY FIREARMS AND AMMUNITION By letter dated December 20, 1996, the Department of State, Office of Arms Transfer and Export Control Policy directed ATF to amend the definition of military firearms and ammunition at 27 CFR section 47.57 to include component parts for firearms and ammunition. The letter further instructed ATF to consult with the Department of State on Form 6 applications for importation of U.S. manufactured military equipment, including weapons, ammunition, and parts previously furnished to a foreign government under a foreign assistance or sales program of the United States ("U.S. origin military surplus"). In compliance with this direction, we are in the process of amending section 47.57 to include component parts for firearms and ammunition in the definition of military firearms and ammunition. In addition, we are now sending all Form 6 applications to import U.S. manufactured military defense articles, including component parts for firearms and ammunition, to the Department of State to ensure that the importation does not violate the Arms Export Control Act or the Foreign Military Assistance Act. The results for the importing community are immediate. In the past, U.S. origin military surplus parts kits and U.S. origin surplus ammunition were approved by ATF directly, without referral to the Department of State. As most of you know, U.S. origin military surplus whole guns were always referred to the Department of State for review and recommendation. Because we realize that this change can impact the importing community on existing commitments under contract, we are considering exploring with the Department of State possible transitional relief for parts and ammunition applications that were pending at the time of their request. No final decision on seeking that accommodation has been made by ATF, and it should be emphasized that even if the agency does seek it, the Department of State has no obligation to consent to the request. YUGOSLAVIA With the signing of the Peace Accords in December, 1995, Yugoslavia was formally divided into the following five countries: Bosnia and Herzegovena Croatia Macedonia Slovenia Serbia and Montenegro - 4 - The Department of State informed ATF that, effective March 14, 1996, sanctions against small arms and ammunition trade between the United States and each of the above countries were lifted EXCEPT FOR SERBIA AND MONTENEGRO. Effective July 12, 1996, sanctions against trade involving all other defense articles and defense services between the United States and each of the above countries, EXCEPT FOR SERBIA AND MONTENEGRO, were also lifted. During this same period, the Office of Foreign Assets Control (OFAC) within the Department of Treasury published regulations in the Federal Register formally lifting sanctions against all of the newly created countries of the former Yugoslavia, including Serbia and Montenegro, effective June 14, 1996. However the action to relax trade sanctions with each of the above countries, including Serbia and Montenegro DID NOT affect the sanctions against arms trade imposed and administered by the Department of State. Accordingly, ATF is denying, and will continue to deny, applications for permits seeking authority to import U.S. Munitions Import List (USMIL) articles produced in or being exported from Serbia and Montenegro. The regulations in 27 CFR Part 47 are being revised to reflect these changes in foreign policy. However, pursuant to 27 CFR section 47.52, ATF will accept applications to import firearms that have been outside Serbia and Montenegro if accompanied by a statement certifying that the firearms have been stored for a 5-year period immediately prior to importation in a nonproscribed country. Enclosure - Federal Register reprint dated July 12, 1996. LARGE CAPACITY AMMUNITION FEEDING DEVICES On September 13, 1994, the Violent Crime Control and Law Enforcement Act of 1994 was enacted. The Act prohibited the transfer and possession of large cpapacity ammunition feeding devices. Excpetions from the prohibition are provided for in the law, including devices lawfully possessed on or before the date of enactment and devices manufactured for or possessed by governmental entities. On April 6, 1995, ATF published in the Federal Register a temporary rule implementing provisions of the law. In response to the notice, many commenters objected to ATF's interpretation of the law as restricting the importation of ammunition feeding devices with a capacity of more than 10 rounds after September 13, 1994, regardless of the date of manufacture of such devices. Similar objections and arguments were raised in litigation challenging ATF's interpretation of the law. ATF re-examined the Act and determined that ammunition feeding devices with a capacity of more than 10 rounds manufactured on or before September 13, 1994, are not subject to the restrictions of the la and may be lawfully imported. Importers of such devices for sale to the public must provide evidence, e.g., a penalty of perjury statement coupled with a statement from the foreign manufacturer or supplier that the devices were manufactured on or before September 13, 1994. Enclosure - Federal Register reprint dated July 29, 1996. - 5 - PERMIT APPLICATION TRACKING SYSTEM ADOPTED One of the main goals of this Branch is to find ways we can improve the level of service we provide to you, our customers. Recently, we implemented a program that will enable us to provide you with faster status updates for your pending permit applications, particularly those of you who may have several applications in the pipeline at any one time. For those of you who are willing to provide us with a self-addressed, stamped envelope when submitting your permit application, we will imprint the third copy of each application with the control number assigned to it, mark the copy "VOID", and return it to you for your records. By giving you the ability to reference our control number when you call in for status updates on your applications, we will be able to locate the application in question in our database with a single query. Another tracking method employed by some importers, and now available to all who would like to adopt a similar method, involves the placement of a unique reference/control number, i.e. 97-008, 1234, etc., on the permit application they submit. Our database has now been modified to allow us to capture these unique numbers as key fields. This allows us to search our database for a given application using your unique number. For those of you who feel you could benefit from one or both of these tracking methods, we encourage your participation. In closing, we hope you have found this letter to be both helpful and informative. Any feedback you might like to share will be greatly appreciated. For those of you who will be attending the 1997 SHOT Show in Las Vegas, Nevada, we invite you to stop by our information booth (#4954). The Branch will have representatives available at the booth to field any import questions you might have. We will also be available to importers at the F.A.I.R. Trade Group meeting on Thursday, January 30, 1997 (Call F.A.I.R. for the room location and time at 703-424-9484). Best Regards for the New Year, [signed] Mary Jo Hughes [second letter] United States Department of State Washington, DC 20520 December 20, 1996 William T. Earle Deputy Associate Director Regulatory Enforcement Programs Bureau of Alcohol, Tobacco and Firearms Department of the Treasury 650 Massachusetts Ave. N.W. Room 8110 Washington, D.C. 20226-0013 Dear Mr. Earle: The Department of State requests the Department of Treasury, Bureau of Alcohol, Tobacco and Firearm (BATF) amend the definition of "military firearms and ammunition" at 27 C.F.R. 47.57(c) to include firearm and ammunition component parts and to consult with us on all Form 6 applications for importation of military equipment including weapons, ammunition, and parts previously furnished to a foreign government under a foreign assistance or sales program of the United States. * Executive Order 11958 and 27 C.F.R. 47.55 require that BATF be guided by the views of the Department of State in the administration of permanent munitions imports. * Section 3 of the Arms Export Control Act (AECA) and Section 505 of the Foreign Assistance Act (FAA) of 1961 require that potential sellers request the Department's permission to retransfer said materiel, and that prospective purchasers agree not to retransfer the items without the prior written permission of the Department. * Also, the FAA requires, among other things, that the USG receive the net proceeds from any sale of defense articles provided as aid to a foreign country (unless the State Department grants a waiver). The Department believes the import of US military parts furnished to foreign governments under a foreign assistance or sales program must be subject to Department review to be consistent with the law and State policy. - 2 - I appreciate your cooperation in this matter. If you have any questions or comments, please contact me at 202-647-4231. Sincerely, Robert W. Maggi Acting Deputy Assistant Secretary for Export Controls Bureau of Political-Military Affairs