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Would I need to pay ITAR?


Gremby

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Hello everyone. 

I am a small time machinist and I have considered getting my 07 FFL for a while now to make very small batches of custom hunting rifles  (maybe 25/year). I am looking at outfitting a small facility to accomplish this, but I would like to start small to avoid unnecessary risk.

I always thought that all manufacturers had to pay ITAR registration, however yesterday I stumbled on an article:

 https://gununiversity.com/firearms-moved-itar-commerce-ccl/#comments 

that states that many manufactures no longer have to pay ITAR. 

Has anyone else encountered this or consulted a lawyer regarding the issue? I understand that a lawyer is the next logical step, but I figured this would also be a good place to ask for some advice. Thanks in advance for any help. 

 

 

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5 hours ago, Gremby said:

Hello everyone. 

I am a small time machinist and I have considered getting my 07 FFL for a while now to make very small batches of custom hunting rifles  (maybe 25/year). I am looking at outfitting a small facility to accomplish this, but I would like to start small to avoid unnecessary risk.

I always thought that all manufacturers had to pay ITAR registration, however yesterday I stumbled on an article:

 https://gununiversity.com/firearms-moved-itar-commerce-ccl/#comments 

that states that many manufactures no longer have to pay ITAR. 

Has anyone else encountered this or consulted a lawyer regarding the issue? I understand that a lawyer is the next logical step, but I figured this would also be a good place to ask for some advice. Thanks in advance for any help. 

 

 

If you make MGs you pay ITAR, if you don't make them, then no.

Its also in the year you make them, ie if you dont make MGs one year, you dont pay itar

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50 minutes ago, Gremby said:

Thanks for responding, that is very helpful, paying ITAR has been one of the biggest things dissuading me from going that route, that's very good news.

Wait till you start paying sales tax, business license, credit card company, SOT, bound book company, any web hosting, advertisements, CPA, etc.

If you think I'll just get a FFL and build guns for cheap is a pipe dream.  I'm a small time guy, I spend 5k a year just to do business by paying the above.  If you think you can only build 25 guns a year and actually make money, I would be shocked.

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DDTC has found that the following instances do not require registration.
a)  Occasional assembly of firearm parts and kits that do not require cutting, drilling, or machining;
b)  Firearm repairs involving one-for-one drop-in replacement parts that do not require any cutting, drilling, or machining for installation;
c)  Repairs involving replacement parts that do not improve the accuracy, caliber, or other aspects of firearm operation;
d)  Hydrographic paint or Cerakote application or bluing treatments for a firearm;
e)  Attachment of accessories to a completed firearm without drilling, cutting, or machining—such as attaching a scope, sling, or light to existing mounts or hooks, or attaching a flash suppressor, sound suppressor, muzzle brake, or similar item to a pre- threaded muzzle;
f)  Cosmetic additions and alterations (including engraving) that do not improve the accuracy, caliber, or other aspects of firearm operation beyond its original capabilities;
g)  Machining new dovetails or drilling and tapping new holes for the installation of sights which do not improve the accuracy or operation of the firearm beyond its original capabilities;
h)  Manual loading or reloading of ammunition of .50 caliber or smaller.

Registration required: 
a) Use of any special tooling or equipment upgrading in order to improve the capability of assembled or repaired firearms;
b) Modifications to a firearm that change round capacity;
c) The production of firearm parts (including, but not limited to, barrels, stocks, cylinders, breech mechanisms, triggers, silencers, or suppressors);
d) The systemized production of ammunition, including the automated loading or reloading of ammunition;
e) The machining or cutting of firearms, e.g., threading of muzzles or muzzle brake installation requiring machining, that results in an enhanced capability;
f) Rechambering firearms through machining, cutting, or drilling;
g) Chambering, cutting, or threading barrel blanks; and
h) Blueprinting firearms by machining the barrel.

So if you're doing machining you will pay ITAR since you're not "occasionally" cutting drilling machining.

If you're just putting them together you should be fine.

 

Note I know numerous FFL 07 that don't pay ITAR. They do make machine guns through putting parts together and registering them on a Form 2. Kind of a gray area.

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Thanks for the response and research! I say 25 guns in that I would ramp up production over a period of time, guessing my first year for 25. My biggest issue is betting the farm before I've got all my ducks in a row. Everything you've added is very helpful.

 

Ideally I'd eventually get to be in the shop full time, but I still have a day job to work until I know I'm actually making money. As much as I'd love to just build a few guns in my spare time and call it at that, my real goal is small scale manufacture.

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On 1/7/2022 at 10:40 PM, Ryo said:

 

DDTC has found that the following instances do not require registration.
a)  Occasional assembly of firearm parts and kits that do not require cutting, drilling, or machining;
b)  Firearm repairs involving one-for-one drop-in replacement parts that do not require any cutting, drilling, or machining for installation;
c)  Repairs involving replacement parts that do not improve the accuracy, caliber, or other aspects of firearm operation;
d)  Hydrographic paint or Cerakote application or bluing treatments for a firearm;
e)  Attachment of accessories to a completed firearm without drilling, cutting, or machining—such as attaching a scope, sling, or light to existing mounts or hooks, or attaching a flash suppressor, sound suppressor, muzzle brake, or similar item to a pre- threaded muzzle;
f)  Cosmetic additions and alterations (including engraving) that do not improve the accuracy, caliber, or other aspects of firearm operation beyond its original capabilities;
g)  Machining new dovetails or drilling and tapping new holes for the installation of sights which do not improve the accuracy or operation of the firearm beyond its original capabilities;
h)  Manual loading or reloading of ammunition of .50 caliber or smaller.

Registration required: 
a) Use of any special tooling or equipment upgrading in order to improve the capability of assembled or repaired firearms;
b) Modifications to a firearm that change round capacity;
c) The production of firearm parts (including, but not limited to, barrels, stocks, cylinders, breech mechanisms, triggers, silencers, or suppressors);
d) The systemized production of ammunition, including the automated loading or reloading of ammunition;
e) The machining or cutting of firearms, e.g., threading of muzzles or muzzle brake installation requiring machining, that results in an enhanced capability;
f) Rechambering firearms through machining, cutting, or drilling;
g) Chambering, cutting, or threading barrel blanks; and
h) Blueprinting firearms by machining the barrel.

So if you're doing machining you will pay ITAR since you're not "occasionally" cutting drilling machining.

If you're just putting them together you should be fine.

 

Note I know numerous FFL 07 that don't pay ITAR. They do make machine guns through putting parts together and registering them on a Form 2. Kind of a gray area.

Effectively the difference between an FFL 01 gunsmith and an 02 mfr. 

Essentially if you want to gunsmith get an 01, if you want to play with post samples you're going to pay annually, a substantial amount of money and intrusion into your life by atf, irs, osha, epa, and even local firemen who wanted $100/year to chat for a few minutes.  Nice to have your address, info, etc all public as well to the folks at the Brady bunch.  Course then there's you personal insurance on your residence.  Having an FFL is like having three trampolines and two pit bulls at your house.  Rates are cheaper for meth labs in the kitchen. LOL

The other option is to pay $200 tax per gun, a LOT for the gun, but have the freedom to do all of both lists without paying additional money or inspections and further dealings with any agencies.  You get to keep your risk free profitable day job as well and still do the unprofitable projects for your friends?

It's good to have choices!

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FFL 01 is a dealer. For the gunsmithing side of things you can only work on firearms that customers ask you to work on. You can't "manufacture" a firearm unless your doing it personally and it is legal in your state.

If you plan to build for resale, then get the FFL 07. Interesting thing is the cost of a 01 is more expensive than a 07.

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