Learn what firearms licensees can expect from an ATF compliance inspection. There is a similar process for federal explosives licensees and permittees (FEL/FEPs).
ATF is responsible for licensing persons engaged in manufacturing, importing, and dealing in firearms. ATF also ensures that those who are licensed to engage in those businesses do so in compliance with applicable laws and regulations.
Federal firearms licensees (FFLs) must comply with the Gun Control Act (GCA) of 1968 and its implementing regulations. This helps protect the public by preventing illegal firearm trafficking and ensuring the successful tracing of crime guns back to the first retail purchaser.
Inspection Process
ATF’s industry operations investigators (IOIs) conduct inspections of FFLs to ensure compliance with applicable federal, state and local laws and regulations, and educate licensees on the specific requirements of those laws and regulations. IOIs also review the required records kept by FFLs to identify individuals potentially associated with trafficking firearms or involved in other criminal activity.
Below is the general process for compliance inspections.
When and Where
Compliance inspections happen during the licensee’s business hours at their business premises. This may also include the inspection of off-site storage locations, if any.
Generally, ATF will not give advance notice prior to conducting a compliance inspection.
If a licensee refuses to comply by not letting the IOI enter the business premises or inspect their inventory and records, this is considered a willful violation and can lead to the revocation of the license.
What to Expect
The IOI will introduce themselves to the licensee, show their ATF credentials, and explain why they’re there. They will also provide their contact information for any follow-up questions.
During an inspection, the IOI will conduct the following activities (not necessarily in this order):
- Review business operations, including ownership and responsible person information
- Evaluate the licensee’s internal controls and security measures
- Verify that licensee is in compliance with state and local laws
- Conduct a complete physical inventory of firearms
- Review the acquisition & disposition (A&D) record, also known as the bound book
- Review all ATF forms, including Forms 4473
- Suggest voluntary actions or steps the licensee can take to improve compliance
If the IOI finds a violation or discrepancies, the licensee will be advised of the required corrective action. The corrective action may include reconciliation of inventory discrepancies, corrections to the A&D record, or corrections to copies of completed ATF Forms 4473. Corrective actions will be included in the final report of violations.
At the end of the inspection, the IOI will sit down with the licensee to go over the final report of violations, if any. The IOI will document the licensee’s response to the violations, including any corrective actions the licensee has taken. Later, the licensee will receive a physical or digital copy of the signed report of violations. Additionally the IOI will review the federal firearms regulations with the licensee, who will have an opportunity to ask questions.
Inspection Results and Recommendations
If an IOI finds violations during an FFL inspection, ATF has several ways to guide the FFL toward correcting those violations and ensuring future compliance. These methods include issuing a report of violations, sending a warning letter, and holding a warning conference (or meeting) with the industry member.
On rare occasions, ATF encounters a licensee who fails to comply with the laws and regulations and does not commit to improving their business practices. If a licensee demonstrates a willful disregard of the law, ATF’s obligation to protect public safety may require the revocation of their license.
In fiscal year 2019, ATF’s firearms compliance inspections resulted in the following recommendations:
| Result of firearms compliance inspection | Number of inspections | Percent of total inspections |
|---|---|---|
| No violations | 6,911 | 52.84% |
| Report of violations | 2,594 | 19.83% |
| Warning letter | 1,482 | 11.33% |
| Warning conference | 415 | 3.17% |
| Licensee went out of business or surrendered their license | 1,634 | 12.49% |
| Revocation/denial of license | 43 | 0.33% |
| TOTAL | 13,079 | 100% |
Please note that the numbers provided above are for the most notable areas, and do not include all items identified by an industry operation investigator during an inspection.
Common Violations
In fiscal year 2019, the most frequently cited violations during ATF firearms inspections included:
Form and Transfer Violations
- Transferee did not properly complete Section A of ATF Form 4473: Firearms Transaction Record [27 CFR 478.124(c)(1)]
- Licensee did not properly identify the firearm on Form 4473 [27 CFR 124(c)(4)]
- Licensee did not contact the National Instant Criminal Background Check System (NICS) or state POC and wait the stipulated time before transferring the firearm [27 CFR 478.102(a)]
- Licensee did not record NICS contact information on Form 4473 [27 CFR 478.124(c)(3)(iv)]
- Licensee did not sign and/or date Form 4473 [27 CFR 478.124(c)(5)]
- Licensee failed to obtain and/or document the purchaser’s identification document [27 CFR 478.124(c)(3)(i)]
- Licensee failed to complete forms as indicated in instructions [27 CFR 478.21(a)]
- This violation is often cited when the licensee failed to properly complete a form, but there is not a separate regulatory citation addressing the omitted or incorrectly documented item.
Recordkeeping and Reporting Violations
- Licensee failed to record entries in their bound book or A&D record in a timely manner [27 CFR 478.125(e)]
- Licensee failed to record manufactured or acquired firearms in an accurate, complete and/or timely manner [27 CFR 478.123(a)]
- Licensee failed to report multiple handgun sales [27 CFR 478.126a]
Questions
If you have questions about a particular ATF inspection or about ATF inspections in general, please contact your local ATF office.