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Justice Department, ATF Issue Final Rule on What It Means to be “Engaged in the Business” of Selling Guns

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On the 31st anniversary of the Federal government’s assault on the Branch Davidian complex in Waco, Texas, more questions are being asked about another gross case of government overreach regarding the botched March 19 ATF SWAT team raid that killed Little Rock Airport executive director, Bryan Malinowski. Just as in Waco where more than 900 FBI and ATF agents attempted to storm the complex by pumping tear gas into the building and ramming it with armored vehicles, leading to a conflict that caused fires that killed 76 people, Malinowski, was awakened by an ATF SWAT team storming into his home in the middle of the night. When he ran from his room, armed and unsure of who was invading his home, agents shot and killed him. The very rule the ATF has used to justify their storming of the man’s house in the middle of the night is just now being issued and won’t be made final until 30 days after it appears in the Federal Register.

The Justice Department announced last week it had submitted to the Federal Register the “Engaged in the Business” Final Rule, which makes clear the circumstances in which a person is “engaged in the business” of dealing in firearms and thus required to obtain a federal firearms license, in order to increase compliance with the federal background check requirement for firearm sales by federal firearms licensees. Here’s what they had to say:

“Under this regulation, it will not matter if guns are sold on the internet, at a gun show, or at a brick-and-mortar store: if you sell guns predominantly to earn a profit, you must be licensed, and you must conduct background checks,” said Attorney General Merrick B. Garland. “This regulation is a historic step in the Justice Department’s fight against gun violence. It will save lives.”

“The Bipartisan Safer Communities Act enhanced background checks and closed loopholes, including by redefining when a person is ‘engaged in the business’ of dealing in firearms. Today’s rule clarifying application of that definition will save lives by requiring all those in the business of selling guns to get a federal license and run background checks — thus keeping guns out of the hands of violent criminals,” said Deputy Attorney General Lisa Monaco. “I applaud the hard work of ATF in drafting this rule and reviewing the hundreds of thousands of public comments, which overwhelmingly favored the rule announced today. Because of that work, our communities will be safer.”

“This is about protecting the lives of innocent, law-abiding Americans as well as the rule of law. There is a large and growing black market of guns that are being sold by people who are in the business of dealing and are doing it without a license; and therefore, they are not running background checks the way the law requires. And it is fueling violence,” said Director Steven Dettelbach of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). “Today’s Final Rule is about ensuring compliance with an important area of the existing law where we all know, the data show, and we can clearly see that a whole group of folks are openly flouting that law. That leads to not just unfair but, in this case, dangerous consequences.”

The Bipartisan Safer Communities Act (BSCA), enacted June 25, 2022, expanded the definition of engaging in the business of firearms dealing to cover all persons who devote time, attention, and labor to dealing in firearms as a regular course of trade or business to predominately earn a profit through the repetitive purchase and sale of firearms. On March 14, 2023, 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 is engaged in the business of dealing in firearms and thus required to obtain a federal firearms license. The Final Rule conforms the ATF regulations to the new BSCA definition and further clarifies the conduct that presumptively requires a license under that revised definition, among other things.

Federally licensed firearms dealers are critical to federal, state, local, Tribal, and territorial law enforcement in our shared goal of promoting public safety. Licensees submit background checks on potential purchasers to the FBI’s National Instant Criminal Background Check System, which helps to keep firearms out of the hands of prohibited persons. Further, licensees keep records of sales transactions to help ensure that when a gun is used in a crime and recovered by law enforcement it can be traced back to the first retail purchaser; they help identify and prevent straw purchasers from buying firearms on behalf of prohibited persons and criminals; and they facilitate safe storage of firearms by providing child-safety locks with every transferred handgun and offer customers other secure gun storage options. Unlicensed dealing, however, undermines these public-safety features — which is why Congress has long prohibited engaging in the business of dealing in firearms without the required license. 

To increase compliance with the statutes Congress has enacted, the Final Rule identifies conduct that is presumed to require a federal firearms license. And, in addition to implementing the revised statutory definition discussed above, the Final Rule clarifies the circumstances in which a license is — or is not — required by, among other things, adding a definition of “personal firearms collection” to ensure that genuine hobbyists and collectors may enhance or liquidate their collections without fear of violating the law. The Final Rule also provides clarity as to what licensees must do with their inventory when they go out of business.  

The Final Rule goes into effect 30 days after the date of publication in the Federal Register.

On Sept. 8, 2023, the  Justice Department published a notice of proposed rulemaking, and during the 90-day open comment period, ATF received nearly 388,000 comments.

The final rule, as submitted to the Federal Register, can be viewed here.

And this is what the ATF announced:

On April 10, 2024, the Attorney General signed ATF’s final rule, Definition of “Engaged in the Business” as a Dealer in Firearms, amending ATF’s regulations in title 27, Code of Federal Regulations (“CFR”), part 478. The final rule implements the provisions of the Bipartisan Safer Communities Act (“BSCA,” effective June 25, 2022), which broadened the definition of when a person is considered “engaged in the business” as a dealer in firearms (other than a gunsmith or pawnbroker). The Final Rule clarifies that definition. It will be published in the Federal Register and will be effective 30-days from publication.

This final rule incorporates BSCA’s definitions of “predominantly earn a profit” and “terrorism,” and amends the regulatory definitions of “engaged in the business as a dealer other than a gunsmith or pawnbroker” and “principal objective of livelihood and profit” to ensure each conforms with the BSCA’s statutory changes and can be relied upon by the public. 

The final rule clarifies when a person is “engaged in the business” as a dealer in firearms at wholesale or retail by:

  1. clarifying the definition of “dealer,” and defining the terms “purchase,” “sale,” and “something of value” as they apply to dealers;
  2. adding definitions for the term “personal collection (or personal collection of firearms, or personal firearms collection),” and for “responsible person”;
  3. setting forth conduct that is presumed to constitute “engaging in the business” of dealing in firearms, and presumed to demonstrate the intent to “predominantly earn a profit” from the sale or disposition of firearms, absent reliable evidence to the contrary, in civil and administrative proceedings;
  4. clarifying that the intent to “predominantly earn a profit” does not require the person to have received pecuniary gain, and that intent does not have to be shown when a person purchases or sells a firearm for criminal or terrorism purposes;
  5. clarifying the circumstances when a person would not be presumed to engaged in the business of dealing in firearms, including as an auctioneer, or when purchasing firearms for, and selling firearms from, a personal collection;
  6. addressing the procedures former licensees, and responsible persons acting on behalf of such licensees, must follow when they liquidate business inventory upon revocation or other termination of their license; and
  7. clarifying that licensees must follow the verification and recordkeeping procedures in 27 CFR 478.94and Subpart H, rather than using an ATF Form 4473 when firearms are transferred to other licensees, including transfers by a licensed sole proprietor to that person’s personal collection.

Read Final Rule

Based on their own wording, it is unlikely Malinowski was making the majority of his income from selling firearms since being the executive director of a national airport pays pretty well last time we checked. (It’s ironic that the airport he was director of is the Bill and Hillary Clinton National Airport as Bill Clinton was president of the United States and head of the federal government at the time the Waco siege took place.) And despite this new rule from the ATF, it will be of no help to them in defending their actions in Little Rock. The “Engaged in the Business” rule may be part of the falsely named “Bipartisan Safer Communities Act,” but for one Little Rock family, it has already cost them a life.

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Read the full article here

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