If you are thinking of becoming a Federal Firearms Licensee (FFL), you must have a thorough understanding of the laws relating to your business. Not only does understanding the laws help you succeed in business, it also protects you from making a costly mistake that could send you to jail. The law that you must know comes from multiple different sources, including both federal and state statutes. It can be confusing, unclear, and filled with pitfalls for the unwary.
Here at The McShane Firm, we have worked with aspiring FFL’s to help them open their business and provide guidance and understanding of the law so as to avoid those costly mistakes. Having a lawyer by your side through the FFL process ensures that you have all your ducks in a row including preparing your application for an FFL and meeting with the industry operations inspector from the ATF as part of the application process. We are her to help manage your day to day practices, rules and regulations regarding manufacturing and gunsmithing, importing and exporting, and dealing with NFA (National Firearms Act) weapons. Going it alone without legal advice and expertise leaves you open to a failing business and a plethora of potential legal issues.
The 8 most common violations that can land an FFL in legal trouble:
- Failure to properly record items in the Acquisition and Disposition Record. The A&D book is a simple transaction record of the date a gun is received in your shop (Acquisition) and the date it leaves (Disposition). Most A&D book errors are not intentional or malicious, however they can still land you in trouble. The law has very strict guidelines of when and how records are put into the A&D book and it is important that they are followed to a T.
- Failing to keep proper records. The Firearms industry is highly regulated. Federal and State regulations require strict maintenance of records from your A&D book, the 4473 forms and multiple sales forms to name a few. Things that may seem menial such as failure to fill out a full middle name or noting “NMN” for no middle name on the 4473 form is a violation of the law. The law also requires a special and separate form for multiple handgun sales. These items can be easily overlooked but just because they may seem small, you can still be prosecuted for these violations.
- Unlawful possession or transfer of an NFA item without the appropriate Forms. The appropriate paperwork has to be filled out for EVERY transaction. Failure to comply with these requirements could land you a 5-10 year jail sentence for each and every occurrence.
- Missing firearms or regulated items. Keeping track of inventory is a daunting task for every retail store – from the local minimart to big box shops. All stores likewise experience “shrinkage” meaning something went missing and your inventory doesn’t match up. It is a reality of retail sales and can happen to an FFL just as easily. The trick is that because firearms are so highly regulated, there are very stringent protocols that you must adhere to if you discover a firearm missing. Failure to comply with these protocols can land you in a heap of trouble.
- Keeping inventory offsite. All of your inventory must be stored at your primary place of business as listed on your license. Temporary business may be conducted off site at gun shows, but that is temporary in nature. If you need to store inventory off-site, there is a specific approval process that must be followed.
- Failing to timely respond to the Tracing Center. If an FFL is ever contacted as a link in the chain of an ATF trace, timely response is critical. Failure to respond in a timely manner, even if not intentional, is framed as willful behavior. It’s key to respond timely and with your attorney in the loop to make sure you are protected.
- Making materially false statements to the IOI. When the Industry Operations Inspector (IOI) comes to the shop for an audit, you must be 100% truthful. It is human nature to sometimes not tell the full and complete truth about something, especially if you are scared, but an incomplete truth is the same as a lie in the eyes of the prosecution.
- Surreptitiously tape recording the conversation with the IOI. Pennsylvania is a two-party state, meaning that if you want to record a conversations, both parties have to know it is being recorded. This is why police officers always tell you that you are being recorded during a traffic stop. Even if you want the recording for your own personal “secret” to keep everyone honest, making that recording in secret is a crime in Pennsylvania.
We can help.
At The McShane Firm, our attorneys are experienced and knowledgeable in both the administrative side involved in setting up an FFL as well as all the possible criminal pitfalls awaiting a new FFL business owner. Whether you are new in business, have an IOI audit coming up, or have already received a notice of violation, you need a qualified attorney on your side to make sure you stay in business and out of jail! Call (717) 657-3900 today.