Business law

Public Affairs Office | The Department of Justice proposes new regulation to update the definition of “in business” as a firearms dealer

The Department of Justice announced today that it has submitted to the Federal Register a Notice of Proposed Rulemaking that would clarify circumstances in which a person is “in the business” of dealing in firearms and is therefore required to obtain a license and conduct background checks. The bipartisan Safer Communities Act (BSCA), passed June 25, 2022, broadens the definition of engaging in the firearms trade to include all persons who dedicate time, attention, and labor to dealing in firearms as a regular course of trade or business. To earn profit mostly through frequent buying and selling of firearms. On March 14, President Biden issued Executive Order 14092, which, among other things, directs the attorney general to develop and implement a plan to clarify the definition of who engages in the business of dealing firearms and thus requires them to obtain a federal firearms license. license. Today’s proposed rule would amend Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) regulations by, among other things, matching ATF regulations with the new BSCA definition and further clarifying the behavior that requires a license under this revised definition.

“Congress passed the bipartisan Safer Communities Act to reduce gun violence, including by expanding background checks that keep guns out of the hands of criminals,” said Attorney General Merrick B. Garland. “This proposed rule implements a congressional mandate to broaden the definition of who must obtain a license and conduct a background check before selling firearms.”

“An increasing number of individuals in the for-profit firearms business have chosen not to register as federal firearms licensees, as required by law,” said ATF Director Steven Dettelbach. Instead, they sought to make money through the illegal sale of firearms. These activities undermine the law, endanger public safety, create significant burdens for law enforcement, and are unfair to many licensed dealers who go to great lengths to follow the law. The Gun Control Act’s exceptions to licensing requirements are in place to allow all law-abiding Americans to exercise their Second Amendment rights—not to facilitate willful evasion of the background check system. This proposed new rule would clarify the circumstances in which a person is “in the business” of trafficking in firearms and is therefore required to obtain a license and follow laws established by Congress for firearms dealers.

Federally licensed firearms dealers are important partners for federal, state, local, tribal and territorial law enforcement in our shared goal of enhancing public safety. They help keep firearms out of the hands of proscribed persons by conducting background checks on potential buyers; ensuring that crime weapons can be traced back to their first retail purchaser by maintaining transaction records; and facilitating the safe storage of firearms by providing child safety locks with every handgun carried and offering customers other safe gun storage options. However, unlicensed handling undermines public safety – which is why Congress has long prohibited engaging in the business of dealing in firearms without the required license.

To increase compliance with laws enacted by Congress, the proposed rule identifies examples of conduct that, in certain circumstances, would presumably qualify to engage in the business of dealing in firearms and would therefore require a federal firearms license. In addition to implementing the revised legal definition discussed above, the proposed rule would help clarify circumstances in which a license is (or not) required by, among other things, adding a definition of “collection of personal firearms” to ensure that true hobbyists and collectors can enhance Their groups are filtered without fear of violating the law. The proposed rule would also provide valuable guidance to the community of federal firearms licensees by addressing the legal ways in which former licensees can liquidate trade stock upon termination of their license and clarifying how a licensee can legally transfer a firearm to another licensee.

Once the proposed rule is published in the Federal Register, the public will have 90 days to submit comments. The Notice of Proposed Rulemaking provided by the Department can be viewed here.

Learn more about the rulemaking process here.

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