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Fact Sheet - Federal Firearms Compliance Inspections and Revocation Process

May, 2018
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Fast Facts

  1. ATF is responsible for licensing persons engaged in manufacturing, importing and dealing in firearms and ensuring that those who are licensed to engage in those businesses are in compliance with applicable laws and regulations.

  2. There were 134,738 federal firearms licensees in fiscal year 2017, including firearm licenses for dealers, manufacturers, importers and collectors.

  3. Federal firearms licensees that comply with the Gun Control Act assist with law enforcement efforts, prevent the diversion of firearms from lawful commerce to the illegal market, ensure successful tracing of firearms and protect the public.

The Bureau of Alcohol, Tobacco, Firearms and Explosives (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. It is critical that federal firearms licensees (FFL) comply with the Gun Control Act (GCA) of 1968 and its implementing regulations in order to assist law enforcement efforts, prevent the diversion of firearms from lawful commerce to the illegal market, ensure successful tracing of firearms and protect the public.

Image of a form with a bullet lying on top.
Image of a form with a bullet lying on top.
ATF industry operations investigators (IOIs) conduct inspections of FFLs to ensure compliance with the law and regulations and to educate licensees on the specific requirements of those laws and regulations. Additionally, IOIs review required records of the FFLs to determine and identify individuals potentially associated with diverting firearms to illicit markets or involved in other criminal activity. During inspections, IOIs suggest voluntary measures that licensees can take to improve compliance with the GCA and help reduce violent crime and protect the public through partnership with ATF. If violations are discovered during the course of an FFL inspection, the tools that ATF has available to guide the FFL into correction of such violations and to ensure future compliance include issuing a report of violations, sending a warning letter and holding a warning conference with the industry member. Despite these actions, on rare occasions, ATF encounters a licensee who fails to comply with the laws and regulations and demonstrates a lack of commitment to improving his or her business practices. In such cases where willfulness is demonstrated, ATF’s obligation to protect public safety may require revocation of the FFL.

There were 134,738 FFLs in fiscal year 2017. This includes firearm licenses for dealers, manufacturers, importers and collectors. During that time, ATF conducted 11,009 firearms compliance inspections.  In 2017, less than half of 1% of FFLs were revoked.

Part of ATF’s core mission is to protect the public from violent crime involving the use of firearms. The FFLs who willfully violate the laws and regulations preventing ATF from accomplishing its mission to protect the public are few. Willfulness is not defined in the regulations, but is defined by case law to mean the intentional disregard of a known legal duty or plain indifference to a licensee’s legal obligations. In the case of an FFL who has willfully violated the law, has shown an intentional disregard for regulatory requirements or has knowingly participated in criminal acts, revocation often becomes the only viable option. It should be noted, however, that ATF does not revoke for every violation it finds and that revocation actions are seldom initiated until after an FFL has been educated on the requirements of the laws and regulations and given an opportunity to voluntarily comply with them but has failed to do so. Violations commonly cited in revocation cases include failure to account for firearms, failure to verify and document purchaser eligibility, failure to maintain records requisite for successful firearms tracing and failure to report multiple sales of handguns.

If revocation is pursued, procedures are followed as specified under Title 27 Code of Federal Regulations Part 478. The licensee is provided with a notice of revocation that includes findings describing the reasons for pursuing revocation. The licensee has 15 days from receipt of the notice to request a hearing. The licensee may be represented by an attorney at the hearing and may bring employees and documentation to address the violations cited in the notice. ATF is generally represented at hearings by ATF counsel and the IOIs who conducted the inspection(s) resulting in the revocation recommendation.

During a hearing, the licensee has the opportunity to challenge the violations. Based on the evidence, testimony and exhibits presented at the hearing by the licensee and ATF, the DIO decides whether to continue with the revocation. If the DIO’s decision is to revoke following a hearing, or in cases where a hearing is not requested by the FFL, a final notice of revocation is sent to the licensee with a summary of the findings and legal conclusions that warrant revocation.

A licensee who receives a final notice of revocation may, within 60 days of receipt of the Final Notice, file a petition for de novo review with the U.S. District Court.

If the licensee makes a request to the DIO to allow continuance of business operations, the DIO may allow the licensee to operate during the appeal process. If the DIO prohibits continuance of operations during judicial review because of the risk to public safety, the FFL can appeal to the court to continue operations during the review process.

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