Sample Block

Bureau of Alcohol, Tobacco, Firearms and Explosives

Does the fact that two licensed manufacturers are wholly-owned by the same parent corporation allow them to transfer post-1986 machineguns between the corporations without either having a Government contract or law enforcement sales demonstration request?

Because the licensed manufacturers are separate legal entities, any NFA firearm would have to be transferred between the entities subject to an ATF-approved application. However, under 27 CFR 479.105(d), a machinegun made or imported on or after May 19, 1986, may only be transferred to the U.S. Government (USG) or a law enforcement agency, or to a Federal firearms licensee for use as a USG or law enforcement sales sample. The transfer of a post-1986 machinegun between licensed manufacturers solely for the performance of a manufacturing sub-process in furtherance of finishing the product, without meeting the requirements of 27 CFR 479.105(d), is not permissible.

To accomplish the sub-process without conducting a transfer of the firearm, an employee of the entity to which the machinegun is registered must accompany the machinegun to the secondary manufacturer’s premises and remain with it, maintaining dominion and control, while the sub-process is being performed. If the sub-process requires more than one day to complete, the registrant may store the firearm overnight at the secondary manufacturer’s premises in a locked container to which only the registrant’s employee has access. In this scenario, no transfer between the primary and secondary manufacturer takes place, and both parties would comply with 18 U.S.C. 922(o).