Part 1: ATF Rulings You MUST Know!

ATF rulings have significant implications on your business. These ruling have the weight of the regulations behind them and if you aren’t familiar with these documents, you should start reviewing them today. While there are dozens upon dozens of active ATF Rulings we are going to focus a few that you should be intimately familiar with as they impact your day-to-day operations.

They are:

ATF Ruling 2001-5 : Identification of Transferee
ATF Ruling 2010-1 : Temporary Assignment of a Firearm by an FFL to an Unlicensed Employee
ATF Ruling 2016-1 : Requirements to Keep Firearms Records Electronically (A&D/Bound Book)
ATF Ruling 2016-2 : Electronic ATF Form 4473
ATF Ruling 2021R-05f : Definition of “Frame or Receiver” and Identification of Firearms
ATF Ruling 2022-1 : Electronic Storage of Forms 4473

All of these ATF Rulings, and others (click here to see all ATF Firearm related Rulings), impact your business, how you operate when receiving firearms, keeping them in inventory and selling firearms. Some of the these rulings allow you to use technology as a replacement to the old school, handwritten records that FFLs used for decades. Others further clarify the regulations, but all of them should be reviewed to ensure you are operating your business in a compliant manner. Coming from a 3-decade long career in compliance, I can say that ensuring compliance is nonnegotiable. If you aren’t complaint, you won’t be in business. Simple as that. ATF revocations are up and your compliance health is paramount in keeping your FFL from being the next licensee targeted by ATF (or at least successfully targeted).

Let’s look at each of these and break down what they mean to you and your business in your day-to-day operations. Yes, there is a lot of information below. So much so that we are dedicating 3 blogs to get this important information to you. This is part 1, so be on the lookout for parts 2 and 3 in the coming weeks.

ATF RULING 2001-5:

How do you identify your customers prior to making the transfer over the counter with a background check (if needed) and an ATF F 4473?

There are 5 requirements that must be met:

The ID/IDs presented must be government issued.
- Pay attention here – just because the utility bill has the name of the city or state on it does NOT necessarily mean that that utility is truly run by a government entity. In fact, many times it is NOT. And that will cause you issues on an ATF compliance inspection.
The ID or IDs presented must have all 4 of the following:
- The individual’s photograph.
- The individual’s legal name.
- The individual’s date of birth.
- The individual’s current physical address.
  - REMEMBER – PO Boxes, or PMB (Personal Mailboxes) do NOT qualify!

If you are using more than one form of government issued ID, be sure to record the secondary, or “supplemental”, ID/IDs in the proper line on the 4473.

**Currently (as of this writing) supplemental identification is recorded on line 26.b. However, be aware, military orders should be recorded in their proper place (currently 26.c) and non-immigrant alien exemptions are line 26.d (as of this writing)!

**NOTE – when listing non-immigrant exemption documents, you are also REQUIRED to attach a copy of that exemption to the 4473 itself!

One last point when it comes to recording supplemental documentation on the 4473. Notice the ONLY requirement listed on the 4473 in which you MUST keep a copy of the ID/documentation is for non-immigrant alien exemptions. If you are keeping additional copies of ID(s), you should consider whether or not that document adds any value or helps your business stay compliant. The short answer is – they probably do not and keeping them truthfully can only hurt you and your business during a compliance inspection.

***REMEMBER – a NEW version of ATF F 4473 is required to be used starting April 1, 2023!

If you aren’t familiar with this new version, no worries, we’ve got you covered. Look out for a dedicated blog focused just on the new 4473’s layout and the new information that is now going to be required on it.

ATF RULING 2010-1:

Most of the time when an FFL transfers possession of a firearm it is a permanent transfer from the business to the customer. However, there are many times an FFL will temporarily “loan” a firearm to an employee for testing, R&D, etc. This ruling details to whom the FFL may loan firearms, how to track those temporary loans, and what docs the individual receiving those firearms should keep with them while in possession of firearms still owned by the FFL.

Here are the highlights:

When an FFL temporarily assigns a firearm to an employee for bona fide business purposes, title and control of the firearm remain with the licensee.
- In a nutshell, are they a W-2 employee? If so, they qualify.
For this reason, no transfer or disposition occurs for purposes of the GCA.
Accordingly, no NICS check, disposition record entry, or ATF Form 4473 is required for the temporary assignment of a firearm by an FFL to its employee.
Bona fide business purposes, in this context, are purposes integral to the FFL’s business operations, and do not include permanent or long-term assignment of a firearm to a specific employee, or loaning or renting a firearm to an employee for personal use.
- Those are considered transfers or other dispositions that would trigger recordkeeping and NICS requirements. Because FFLs are accountable for their firearms inventories, ATF strongly recommends that FFLs ensure accountability for firearms temporarily assigned to employees.
- ATF has historically focused on the duration of time the firearm was released to the employee when determining if it constituted a “transfer.” Though longer periods may be appropriate in certain industries or for certain purposes, ATF has suggested the duration should typically be short, such as issuance during a shift with the employee returning the firearm at the end of the shift.
In addition, ATF reminds FFLs that they may not knowingly make available or assign a firearm to any person whose receipt or possession of firearms is prohibited under the GCA.

Since there is no transfer, you don’t need to dispose in your bound book. But you should at minimum make a note that the firearm is on loan, to whom it was loaned, and when that loan is expected back at your FFL premises.

You should also provide your employee with the following, showing they are in legal possession of the firearm(s) you have loaned to them:

an authorization letter (signed by an RP stating that the employee is in legal possession of company property);
a copy of the regulations specific to the transfer as well as copy of this ruling (2010-1); and
a copy of the company’s FFL and SOT (if in possession of an NFA-regulated firearm/suppressor).

If you are using an eBound Book, you should speak with your provider and ask if they can track loaned firearms. If yours does, it will make your life much easier and give you a great tool for tracking and managing your loan-out program.

While you are reviewing the functionality of your electronic Bound Book be sure to also ensure that whatever solution you are using (or will be switching to) is compliant with ALL the requirements of our next ruling for review – ATF Ruling 2016-1. Though there were previous rulings that governed eBound Books, they are superseded by 2016-1 and any software that has been around longer than 2016 should have been updated as the ruling requirements changed.

Next week we will dive into ATF Rulings 2016-1 and 2016-2.

Even with looking at just two of the 6 key ATF Rulings, it is a lot of information. As you can see, they date back to 2001 and there is no real notification from ATF that these rulings apply to you. Therefore, you must do all the work to find out what ATF expects of you! Understanding these rulings will allow you to ensure [CB1] your business has sound standard operating procedures around the regulations, and more importantly to ensure your team follows the SOP!

In part 2 we will review in detail the ATF Rulings that govern your use of an electronic Bound Book and an electronic 4473. It’s easy to just say the software company told me “It is compliant”, but guess what? The ATF doesn’t care what the software company says. They only care that you know the requirements and that you vetted the software before using it.

MUCH more to come!

In the meantime, consider who you are using, how that software works and what you can do to take your compliance to the next level. That next level is going fully digital and storing your 4473 in a secure, encrypted, tamper-evident file format. Never print another 4473 again with 4473 Cloud! Click here to get started today.