ATF 41P Comes to Fruition

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Two years ago we first talked about 41P and more recently discussed it again. Well,  it has come to pass. Today we bring you Adam Kraut of the Firearms Industry Consulting Group to help us wade through the legal waters. Mad Duo 

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ATF 41P

Before we delve into ATF 41P and what it means for individuals who currently use gun trusts to purchase NFA items, let us revisit how ATF 41P came about.

As the recently published final rule on ATF 41P states, “The proposed regulations were in response to a petition for rulemaking, dated December 3, 2009, filed on behalf of the National Firearms Act Trade and Collectors Association (NFATCA).

“The NFATCA expressed concern that persons who are prohibited by law from

possessing or receiving firearms may acquire NFA firearms without undergoing a background check by establishing a trust or legal entity such as a corporation or partnership.”

“…the petitioner requested amendments to §§ 479.63 and 479.85 requiring photographs and fingerprint cards for individuals who are responsible for directing the management and policies of the entity so that a background check of those individuals may be conducted.”

While NFATCA is currently touting ATF 41P as a victory because it eliminates the Chief Law Enforcement Officer (CLEO) signature for individuals and replaces it with CLEO notification, it seems they have forgotten a few things that didn’t exist prior to this regulation.


Previously, legal entities such as trusts, corporations, and LLCs did not have responsible persons that would be required to submit fingerprints and photographs, nor did they have to notify the CLEO of the submission of an application to ATF. In fact, there is now an additional burden placed upon legal entities.

So what does this mean for those that use legal entities to obtain NFA firearms? The rule will take effect 180 days from the time the final rule is published in the Federal Register. So until then, the status quo remains.

ATF 41P

For those of you who have purchased all the NFA firearms you could ever want and don’t plan on buying more, you need not worry. Those of you who have items pending will also be grandfathered in (although ATF did not define “pending” so we’re unclear as to what that actually means). During the rulemaking process, we were lead to believe it would either be the day the application was postmarked, the day ATF cashed the check or the day ATF marked it pending in their internal system.

With regards to the Responsible Person (RP) provision, it will depend on how your trust is drafted.

Responsible person. In the case of an unlicensed entity, including any trust, partnership, association, company (including any Limited Liability Company (LLC) ), or corporation, any individual who possesses, directly or indirectly, the power or authority to direct the management and policies of the trust or entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or legal entity. In the case of a trust, those persons with the power or authority to direct the management and policies of the trust include any person who has the capability to exercise such power and possesses, directly or indirectly, the power or authority under any trust instrument, or under State law, to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust.”

ATF 41P

ATF gives examples of who may be considered a responsible person which includes: settlors/grantors, trustees, partners, members, officers, directors, board members, or owners. But again, it will depend on how your trust (or other legal entity) is drafted.

The biggest impact of the RP provision is the requirement that RPs will have to submit fingerprints, photographs, a CLEO notification and an NFA Responsible Person Questionnaire. If the entity has been approved as a maker or transferee within the previous 24 months, the entity can certify that there has been no change to the “documentation previously provided” by specifying the previously approved form by the form type, date of approval and serial number of the firearm (provided that the application within the last 24 months included those things). If this is done, then the entity need not submit the fingerprints, photographs and RP questionnaire. The CLEO notification will still need to be submitted.

If the number of RPs changes within the entity, ATF does not need to be updated unless you are submitting a new Form 1 or Form 4, as you can no longer affirm that there has been no change to the documentation previously provided.

While ATF 41P is not as catastrophic as it could have been, it is certainly no win for the community. Once again it appears members of the community have compromised to the detriment of fellow gun owners.

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Interested in learning more about the President of NFATCA John Brown’s involvement with ATF? You can see documentation of his interaction with ATF, that he provided emails forwarded to him by an FFL involved in litigation against ATF to ATF and more in the initial comment filed in opposition to ATF 41P by the Firearms Industry Consulting Group. That information can be found on pages 27-30 with the supporting documentation attached as exhibits.

-Adam Kraut, Esq.

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4 thoughts on “ATF 41P Comes to Fruition

  • January 6, 2016 at 3:20 pm
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    So how is any of those changes going to prevent, as Obama said, for criminals to “get hold of the most dangerous kinds of weapons” ? How many crimes are committed w/ NFA items – SBRs, SBSs, supressors, machine guns, AOWs – vs 9mm HiPoints ?

    And even then – what is to prevent a “criminal” to send a trust w/ two RPs – his grandma and his grandpa? Both clean as whistles, able to pass any background checks?

    And what is that about the “courtesy copy” to CLEOs? How would LE store those? For how long? We now basically have a registry of all NFA items *at the fingertips of any LEO*, and they may not even properly secure that information – ie, what prevents a rogue admin @ LEO to sell that to real criminals ?

    Is there any other way to fuck this up more ?

    Reply
    • January 6, 2016 at 8:34 pm
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      “Is there any other way to fuck this up more ?”

      Never, ever, ever ask that question. The answer is always “Yes.” and with the government it’s “Yes, let me show you how we plan to do it”.

      Reply
      • January 13, 2016 at 3:25 pm
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        Government is like space travel. It’s unforgiving, deadly, doesn’t care one bit about your welfare, and it can always get worse.

        Reply
  • January 6, 2016 at 2:56 pm
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    “ATF gives examples of who may be considered a responsible person which includes: settlors/grantors, trustees, partners, members, officers, directors, board members, or owners.”

    I expect they will take the widest possible view of who has to submit this information in all cases.

    Not only does this place a burden on the users of a Trust, the CLEO notification is begging for harassment in some areas where CLEOs are notoriously anti-gun.

    Where my parents live it’s impossible to get a CLEO sign off and I’d bet dollars to doughnuts that if you notify the CLEOs in the area as required they will start making their presence highly visible around your house. I’d also expect them to pull vehicle information and license numbers and start pulling you over on a pretty regular basis.

    Some might say that sounds paranoid, but trust me, in some areas it’s not.

    Reply

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