07 FFL for ASSEMBLY?

[Spectre1995]

Hello everyone, I am looking to apply for an 07 FFL for the purposes of firearm *assembly* (such as assembling custom AR's from pre-made lower receivers where the only work I am doing is putting it together), as well as non-machining gunsmithing (mainly cleaning, minor parts replacement, and general repair of older firearms) and my only concern is ITAR. With an 07 FFL, even if I don't do any machining on the firearm, would I still be required to pay ITAR?

Another question, because I don't intend to be a licensed *Dealer*, rather an 07 Manufacturer, am I still permitted to conduct gunsmithing work, or is an 01 required for that.

Last question; if the answer is "yes" to the above question, as an 07 am I still required to apply for the CFD? I know I'll need the COE, and the BOE permits but the CFD was the only one I'm not sure about.

Thank you all in advance.

[OCArmory]

Anytime you are changing the category of the firearm i.e. receiver - rifle you are manufacturing and would need an 07. You would also need to add you manufactures mark unless you had a variance. The ATF has taken it one step further and said that anytime you are adding value to a firearm you are also manufacturing. I will leave the ITAR can of worms alone. You will always have to apply for a state license. The CFD is if you want to process DROS'. You can get an exempt license but would not be able to DROS firearms so you would have to not be dealing with transfers or new sales just repair and return or sales to other dealers.

[Spectre1995]

I am aware that I would need an 07 to put them together. But I was talking specifically about finished receivers. For example, I get a Spikes AR lower with a serial number already engraved, etc, and build a custom AR around it. Would this need ITAR?

And with a CFD, a 07 can carry out DROS just like an 01?

[audiophil2]

Originally Posted by Spectre1995

I am aware that I would need an 07 to put them together. But I was talking specifically about finished receivers. For example, I get a Spikes AR lower with a serial number already engraved, etc, and build a custom AR around it. Would this need ITAR?

And with a CFD, a 07 can carry out DROS just like an 01?

A stripped receiver is in a different category than an assembled rifle. Once oyu start adding parts to it you are manufacturing and oyu must engrave your FFL info onto the receiver and pay excise tax. That Spikes tactical receiver is no longer a SPikes Tactical and must now be registered with ATF as a Spectre1995 receiver. It is why a lot of companies will not sell a complete lower and a complete upper to an individual on the same invoice. The excise tax was not paid at the rifle rate and only at the receiver rate and the seller would be liable for the evasion.

ITAR must be paid. Some FFLs choose not to pay. Then when they get caught they have to pay all the late fees. Skip 5 years of payments and oyu are over $10,000. ATF can take well over 5 years to audit you and you can lie to them since yu do not pay ATF ITAR fees. I've seen FFLs lose their license for not paying ITAR fees and when you apply for a new one you will be asked if oyu ever had your FFL revoked and they will want to know why. Then you get denied a new FFL.




https://www.ttb.gov/firearms/faet-faqs.shtml

[Spectre1995]

Isn't under 50 items still exempt from the excise tax?

[cleck]

Originally Posted by Spectre1995

Isn't under 50 items still exempt from the excise tax?

Exactly right. https://www.rocketffl.com/ffl-cost/

[cleck]

Originally Posted by Spectre1995

I am aware that I would need an 07 to put them together. But I was talking specifically about finished receivers. For example, I get a Spikes AR lower with a serial number already engraved, etc, and build a custom AR around it. Would this need ITAR?

And with a CFD, a 07 can carry out DROS just like an 01?

Even though a manufacturer's FFL would be required, you don't need to register under ITAR for "Occasional assembly of firearm parts and kits that do not require cutting, drilling, or machining."

The definitions of "manufacturer" are very different between ATF and State. Typically, the State definition (the one used for ITAR registration) covers many more people/companies than just FFLs. However, in this rare case, an FFL is needed but ITAR registration is not.

https://www.rocketffl.com/itar-regis...gunsmith-ffls/

[weaselfire]

Originally Posted by Spectre1995

I am aware that I would need an 07 to put them together. But I was talking specifically about finished receivers. For example, I get a Spikes AR lower with a serial number already engraved, etc, and build a custom AR around it. Would this need ITAR?

And with a CFD, a 07 can carry out DROS just like an 01?

According to Department of State, simply assembling a firearm from parts does not require ITAR registration. According to ATF, simply assembling a firearm from parts does not require additional marking if the serialized part is already marked. A 07 FFL is capable of everything a 01 is capable of, as well as what a 06 is capable of.

Jeff

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[audiophil2]

I'm just going to leave this here.

https://www.law.cornell.edu/cfr/text/22/122.1

§ 122.1 Registration requirements.
(a) Any person who engages in the United States in the business of manufacturing or exporting or temporarily importing defense articles, or furnishing defense services, is required to register with the Directorate of Defense Trade Controls under § 122.2. For the purpose of this subchapter, engaging in such a business requires only one occasion of manufacturing or exporting or temporarily importing a defense article or furnishing a defense service. A manufacturer who does not engage in exporting must nevertheless register. (See part 129 of this subchapter for requirements for registration of persons who engage in brokering activities.)

Good luck with the under 50 parts internet advice.


I wonder who would be responsible when a Spikes tactical stripped receiver blows up when it was "assembled" by Spectre1995. Will the owner sue Spikes or Spectre1995. Will Spikes sue Specte1995 for advertising Spectre1995 AR15s as Spikes Tactical AR15s since there are no Spectre1995 markings on the firearm? Will the owner send the rifle to Spikes for warranty work or Spectre1995?

[weaselfire]

The problem with the cited law is that assembly does not equate with manufacturing. DDTC and BATFE use two different definitions.

Jeff

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[Spectre1995]

So, the way I see it, and the way it's shown in the guidelines for ITAR, so long as I do not "manufacture" in the definition of doing any actual machining, and simply assemble firearms from pre-made receivers/frames that already have Serial markings on them, etc, I should be good to go so long as I stay under 50 articles per calendar year. I've spoken with a few other small 07's and they seem to have similar understandings of the law as well.


On a different note, as an 07 if I design and build a prototype firearm for the sake of testing purposes, but not sell it, would that require ITAR?

[audiophil2]

Originally Posted by weaselfire

The problem with the cited law is that assembly does not equate with manufacturing. DDTC and BATFE use two different definitions.

Jeff

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It most certainly does. If the OP primarily assembles AR15s then he is not occasionally assembling. He is manufacturing. That is what the "requires only one occasion" is all about. If he assembled 50 AR15s a year but sells 5000 guns a year or repairs 3000 guns a year then maybe he can get away with it as occasional but if he assembles 50 AR15s a year to avoid FAET and only sells 100 guns including those 50 he assembled then a significant part of his business is manufacturing.

It is one thing to have an 01FFL and sell 1000-10000 guns a year and assemble <50 guns from parts. It is completely different to get an 07FFL with the intention of hitting a 50 gun cap every year and expect DDTC to think assembling AR15s was a small part of the overall business plan so it is exempt from ITAR. The <50 gun FAET exemption does not automatically exempt him from ITAR as occasional because occasional can be as low as 1 gun. He clearly stated he wants to assemble AR15s as a regular part of his business. That is not occasional at all.

I'm done here. Not going to P up a rope over something I deal with yearly.

[Spectre1995]

Persons who engage in the fabrication of articles solely for experimental or scientific purposes, including research and development.

Well, I found my exemption.

If I primarily engage in the business of firearm sales and gunsmithing activities (must check to see if an 07 can engage in gunsmithing) and restrict "manufacturing" strictly for experimentation which is what I intended, I'll be fine.

Then when I can afford ITAR, I'll branch out a little further.

[weaselfire]

Originally Posted by Spectre1995

Well, I found my exemption.

If I primarily engage in the business of firearm sales and gunsmithing activities (must check to see if an 07 can engage in gunsmithing) and restrict "manufacturing" strictly for experimentation which is what I intended, I'll be fine.

Then when I can afford ITAR, I'll branch out a little further.

07 can do gunsmithing. 01 as well.

Jeff

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