The Biden Department of Justice has proposed a rule to clarify that there are actually no loopholes to the requirements for license and background checks in firearms dealing. There was never a loophole.
Finally, the government has taken action to close the so-called “gun show loophole” in an effort to help prevent criminals from getting guns.
The proposed rule is meant to be common sense guidance on complying with the existing statute. If an individual is actively buying and selling firearms to earn a profit, they need to be licensed and run a background check. If they don’t, they aren’t complying with the Gun Control Act as revised by the Bipartisan Safer Communities Act. Non-repetitive conduct exceptions are laid out under the law.
People are not required to have a federal firearms license if they are not engaged in the business of or the repetitive action of buying or selling firearms.
Three aspects of the proposed rule are:
1. The proposed rule would amend ATF’s regulations to clarify that firearms dealing—requiring a license and background checks—does not occur solely in brick-and-mortar stores, but also encompasses dealing at gun shows or flea markets, through mail orders, and over the Internet. The proposed rule thus makes clear that there is no “gun show loophole” or “Internet loophole” recognized under federal law—instead, a gun dealer must obtain a license and run background checks no matter where he engages in the business.
2. The proposed rule would identify examples of conduct that would be presumed to qualify as engaging in the business of dealing in firearms, such as:
When someone is selling or offering firearms to a customer and also represents to that customer that the seller has the willingness and ability to purchase and sell additional firearms to that customer;
When someone spends more money purchasing firearms for resale than that person’s reported taxable income during the applicable period of time;
When someone engages in behavior that evinces a desire to skirt the law—such as using straw or sham businesses, selling illegal firearms, or selling firearms with the serial number removed or altered.
3. The proposed rule would clarify for the public the circumstances when the sale or disposition of firearms does not require the seller to obtain a license.
Among other things, the proposed rule would add a definition of “personal firearms collection” (and related terms) to ensure that genuine hobbyists and collectors may enhance and liquidate their collections without fear of violating the law.
The proposed rule would also provide valuable guidance to the FFL community by addressing the lawful ways in which former licensees may liquidate business inventory upon termination of their license and clarifying how a licensee can lawfully transfer a firearm to another licensee. This would help close what some have described as the “fire sale loophole,” when former licensees are left with a significant quantity of firearms from their former inventory and proceed to dispose of those firearms after their license has been terminated and without running required background checks.
Basically, this amounts to a strengthened and expanded statutory definition of to whom the rule applies and how will it operate on the ground in the modern firearms marketplace.
The proposed rule is consistent with President Biden’s executive order and is being implemented as a result of the Bipartisan Safer Communities Act, which has shifted the focus for those who must be licensed from those who earn their “livelihood” selling firearms to all who engage in the sale of firearms “to predominantly earn a profit.”
ATF Director Steven Dettelbach explained the history and necessity for today’s proposed rule in a call with reporters. “Over a half century ago, Congress passed the Gun Control Act of 1968 which provided that those who are quote, engaged in the business and quote appealing and firearms were required to become Federal Firearms Licensees or FFL. These FFLs are critical partners to law enforcement in our shared goal of promoting public safety.”
“The vast majority of individuals and businesses that deal in firearms follow the law. They become FFL and run legally required background checks to help prevent their guns from being sold to felons, juveniles and other legally prohibited people,” Dettelbach said.
He explained how the loophole is negatively impacting law enforcement efforts, “They also keep transaction records and sell firearms with required serial numbers to help police trace crime guns and catch shooters. However, some firearms dealers have chosen not to become licensed as FFL as required by law… Because they are not FFL, these unlicensed dealers sell guns without running background checks without keeping records and without observing the other crucial public safety requirements by which the FFL community abides.”
The negative consequences of the perceived loopholes laid the foundation for Congress to pass the Bipartisan Safer Communities Act.
“The Bipartisan Safer Communities Act was passed by Congress to reduce gun violence, including by expanding the background checks that keep guns out of the hands of criminals,” said Attorney General Merrick Garland. “This proposed rule implements Congress’s mandate to expand the definition of who must obtain a license and conduct a background check before selling firearms.”
This is just one piece of the efforts the Department has taken to effectuate Congress’ mandate in the bipartisan Safer Communities Act.
There will be 90 days for the public to comment on this before the final ruling is issued. The ATF will “carefully and thoughtfully” consider the comments. While there isn’t a strict timetable for moving forward, a senior DOJ official said, “The ATF and DOJ share the President’s view that background checks are one of our most effective public safety tools and we would like to ensure the widest possible coverage for background checks as expediently as we can responsibly effectuate that.”
Brady United advocates for the closure of the so called “gun show loophole” as a matter of public safety, saying: “Because of gun shows, private sales, and online sales, one in five gun sales today are conducted without a background check. As a result, guns often fall into the wrong hands. Yet, more than 90 percent of Americans agree that anyone who buys a gun — no matter where or how — should go through a Brady Background Check. The will is there—and we will make a way.”
We can perhaps expect that Republicans might not publicly admit that they agreed to this rule, but it is actually exactly what they claim they want, which is to have existing law implemented and to keep guns out of the hands of criminals. While gun show enthusiasts might not appreciate the extra paperwork, law enforcement and the public will. And after all, many jobs require paperwork and or licensing.
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