Guest Article: Obama’s Executive Order and the Gunsmith, by Gene Kelly

Does the recent Obama “executive order” really affect your ability to do your own gunsmithing or be a professional gunsmith?!

If you listen to the wagging tongues, supposedly all gunsmiths are going to have to register with the State Department DDTC and pay big fees. In reality, well, not so much.

The first thing I want to tell you is don’t panic. Things are not as dire as initially broadcast widely over the Internet. The current government would love nothing better than to have you throw up your hands and quit gunsmithing or stop working on your guns. In fact, this current president has only five months left. So these are acts of desperation of a fading administration. After his term ends, depending on who is elected, all of this may just blow over and go away.

So in spite of the intent of our ever-expanding government, I have good news for most of you! In fact I am going to tell you how the recent obama executive order will enable some gunsmiths to even make more money! But first, I need to tell you who I am and why our company exists. My name is Gene Kelly, and I am president of the American Gunsmithing Institute.

The American Gunsmithing Institute (AGI) was established in 1993 to preserve the gunsmithing arts and, therefore, protect our firearm freedoms. That is our mission. We have done that by training well over ten thousand Certified Professional Gunsmiths, through our study-at-home professional gunsmithing, design, function, and repair courses. Plus, we have created over 60 firearm specific armorers courses and numerous specialty gunsmithing, welding, and machining courses.

The Gun Club of America (GCA) is another entity that I started over a decade ago to expand our ability to provide individuals that want to be true firearm experts with high quality information and resources.

Now, I have to do my disclaimers: I am not an attorney. I am not giving you legal advice. Each individual’s situation is different, and you need to seek your own legal advice with regards to your individual situation. I am only giving you my well-researched opinion. With all that said, I will tell you that I have already spent numerous hours over the last several days reviewing this information and checking with some of my sources.

As you may have heard, the Obama Administration issued an “executive order”, which inspired the Directorate of Defense Trade Controls (DDTC) to issue new “policy guidance” dated July 22, 2016 on the “Applicability of the ITAR Registration Requirement for Firearms Manufacturers and Gunsmiths”. (ITAR stands for the International Traffic in Arms Regulations.)

This has caused a great deal of unnecessary concern and distress in the firearm community.

But do not panic! When you read the actual document, you will realize:

  1. These rules do not apply to hobby gunsmiths (as they are not engaged in the “business” of gunsmithing).
  2. Most gunsmiths do not have to register, as long as you are not offering and preforming specific tasks that are now classified as “manufacturing” by DDTC.
  3. There is an opportunity for the gunsmiths that do preform the services that require registration to make more money. Keep reading to find out how.

In an attempt to clarify and illuminate the actual impact of this new “guidance”, I have provided extracts of the “policy guidance” in quotes below. Emphasis is mine.

(As usual with any government agency, not everything is crystal clear, and some areas are open to interpretation. I am only providing my opinion of what I think it says. However, I am not an attorney, so this is just my opinion. If you need a legal interpretation, please contact a qualified attorney.)

First, here’s the good news: It is pretty clear that this does not apply to hobby gunsmiths that are doing their own work, as they are not someone who “engages in the United States in the business of manufacturing or exporting or temporarily importing defense articles, or furnishing defense services, is required to register with the Directorate of Defense Trade Controls under §122.2.“

So my read on this is that if you legally modify your guns for your own use and purposes, these regulations do not affect you, as you are not “in the business”. So take a deep breath and carry on enjoying your hobby! It is also clear that many licensed gunsmiths (FFL’s) will not have to register, depending on the services that they offer. The “policy guidance” also specifically exempts most things a gunsmith will need to do:

“The Directorate of Defense Trade Controls (DDTC) has reviewed and consolidated policy guidance about whether various activities related to firearms constitute manufacturing for International Traffic in Arms Regulations (ITAR) (22 CFR Parts 120-130) purposes and require registration with DDTC and payment of a registration fee. DDTC has found that many, but not all, traditional gunsmithing activities do not constitute manufacturing for ITAR purposes and, therefore, do not require registration with DDTC. The following guidance is confined to DDTC’s ITAR implementation. You must also comply with all other relevant laws”

“Registration not required, not manufacturing: In response to questions from persons engaged in the business of gunsmithing, DDTC has found in specific cases that ITAR registration is not required because the following activities do not meet the ordinary, contemporary, common meaning of “manufacturing” that DDTC employs in implementing the ITAR and, therefore, do not constitute “manufacturing” for ITAR purposes:

  1. Occasional assembly of firearm parts and kits that do not require cutting, drilling, or machining;
  2. Firearm repairs involving one-for-one drop-in replacement parts that do not require any cutting, drilling, or machining for installation;
  3. Repairs involving replacement parts that do not improve the accuracy, caliber, or other aspects of firearm operation;
  4. Hydrographic paint or Cerakote application or bluing treatments for a firearm;
  5. 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;
  6. Cosmetic additions and alterations (including engraving) that do not improve the accuracy, caliber, or other aspects of firearm operation beyond its original capabilities;
  7. 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; and
  8. Manual loading or reloading of ammunition of .50 caliber or smaller.

Activities limited to the domestic sale or resale of firearms, the occasional assembly of firearms without drilling, cutting, or machining, and/or specific gunsmithing activities that do not improve the accuracy, caliber, or operations of the firearm beyond its original capabilities (as described above) are not manufacturing within the context of the ITAR. If you are not manufacturing, exporting, temporarily importing or brokering defense articles or services, you are not required to register with DDTC. “

So if you are not offering services that constitute “manufacturing”, then you are exempt! They say it directly in the “guidance” quote above.

Also, some firearms are not covered by the ITAR.  So if the firearm is not a “defense article,” then it is not covered by this regulation. What exact firearms are “defense articles” is not clearly covered in the provided “guidance”. The definitions listed in the regulations on their website appear to be pretty broad to cover many firearms. You can check directly with DDTC to see if a type of firearm is an ITAR firearm. (However if a firearm is not covered by the ITAR, then their regulations do not apply):

“Because the GCA (Gun Control Act of 1968) is intended to cover a broader scope of domestic activity than the AECA, the ATF regulations define the term “firearm” more broadly than the ITAR. As a result, not every firearm controlled by the ATF regulations is also controlled by the ITAR.”

“Persons who do not actually manufacture ITAR-controlled firearms (including by engaging in the activities described below, which DDTC has found in specific cases to constitute manufacturing) need not register with DDTC, even if they have an FFL from ATF. “

“DDTC has found that many traditional gunsmithing activities do not constitute manufacturing for ITAR purposes and, therefore, do not require registration under the ITAR, particularly where such activities do not require cutting, drilling, or machining and do not improve the accuracy, caliber, or operation of the ITAR-controlled firearm beyond its original capabilities.”

So there are another large percentage of gunsmiths that do not need to register with the DDTC.

It is very clear though that other common gunsmithing services would require a gunsmith to register according to this “guidance”, if you are manufacturing firearms that are covered by the ITAR.  This could include: cutting, drilling, or machining, or improving the accuracy of the firearm beyond its original capabilities.

But use common sense. For example, mounting a scope might improve the accuracy of the shooter, but it does not improve the inherent accuracy of the firearm. H here is where they say it they say the difference is;

“Registration Required– Manufacturing: In response to questions from persons engaged in the business of gunsmithing, DDTC has found in specific cases that ITAR registration is required because the following activities meet the ordinary, contemporary, common meaning of “manufacturing” and, therefore, constitute “manufacturing” for ITAR purposes:

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

The primary effect on the gunsmiths that do want to offer those services on ITAR controlled firearms that the DDTC claims falls under their purview, is that they will have to fill out a form and pay an annual fee of $2,250 as a registration fee. It’s just a fee to register, even if you do not intend to export. Actual exporting requires specific permission from the DDTC.

In my opinion this is just typical expansion of the law beyond it is intended purpose, so as to create a vehicle for harassment and financial burden on the firearms industry, with an overall goal to further suppress gun ownership if you let it.  All of this may pass away, if the right individual is elected to the presidency.

But another way of looking at this is that it is for gunsmiths that want to do this type work or provide those services, and for them it is simply just an additional “cost of doing business” that only works out to less than $200 a month, which is not really such a big deal in the overall scope of things if you actually do have to register.

Gunsmiths that do work that falls under these regulations will just have to raise their prices and be a bit more professional in operating their businesses. (Part of what we teach at AGI is how to make money gunsmithing through the appropriate application of best business practices.)

I think a simple solution for gunsmiths that don’t want to register is to job out any of the work in the above “guidance” that is “manufacturing” to gunsmiths that are willing to register.

One possible example: Gunsmith “A” does all of his non-registration required work as outlined in the “DDTC Guidance”, and when he gets in a project that falls into the “manufacturing”, he lets the customer know that he is sending that to a “DDTC Registered Gunsmith” and subcontracts it to Gunsmith “B”, who is “registered” and then receives and does the work, and then sends it back to Gunsmith “A”, who makes a mark-up on handling the transaction.

Gunsmiths that specialize in barreling and accurizing work are going to probably end up making more money as a result. As always, less competition equals opportunity to raise prices.

Our company intends to register, and I will share with you what we learn from the process. We also are retaining a law firm that specializes in this area of activity.

But you may or may not want to wait to register (if required) to see what happens in the November election. If Trump is elected, this entire problem may go instantly away. So again, don’t panic.

Hobbyists are not affected, and half to two-thirds of gunsmiths are not required to register, depending on the services that they offer.

We will be monitoring this to see where it goes. Hopefully the NRA, National Shooting Sports Foundation, and other groups can get Congress to clean up this mess by exempting Domestic manufacturing with intent for domestic sales and the related “Gunsmithing” aspects.

But for now, I want assure you that there is no reason to “jump out of the window”. It appears that many, if not most of you, who want to or are doing gunsmithing are already exempt from this registration process.

What I have stated is only my personal opinion after a careful reading of the DDTC issued “policy guidance”. I am of course not an attorney, and I am NOT offering legal advice, only my personal opinion after having read the information distributed by the DDTC. If you have specific questions, seek qualified professional legal advice.

Now I am going to give you my political opinion.

Quite honestly, unless we all work hard to elect Trump (like him or not), we will end up with a lot worse than this crippling the industry and destroying our freedoms. Hillary is toxic and will ruin the country for the rest of our lives and beyond, just with her control of the appointments to the Supreme Court. Let alone all of the other decisions and appointments that she would make. We need to give people the backbone to vote against her and to vote for Trump. We also need to open our wallets and support Trump and maintain a Republican House and Senate. I would hope that Trump would unwind many of these executive orders and overreaches.

The fact that the elites on both sides are so wound up and don’t want him is enough of a contrarian reason alone for me to vote for him.

But personally, the sweetest revenge is to make money!!

At AGI we have consistently provided knowledge and assistance to gunsmiths on how to make money gunsmithing. We have provided specialty courses and even include “The Money Makers” with our professional gunsmithing courses to help gunsmiths start making money as soon as they have their FFL.

I want to help more gunsmiths and FFL dealers make money. I want them to survive and prosper. Our country needs gunsmiths and FFL dealers! Part-time gunsmiths that properly run their business should be making a minimum of $1-2,000 per month, and full-time gunsmiths who work efficiently the way we teach them are capable of making as much as $100,000 a year or more, as a number of our students do. You need to survive and prosper.

If you are not yet a Certified AGI Gunsmith and don’t yet have your FFL, now is the time to enroll in the Professional Gunsmithing Course and apply for your FFL, while it is still easy. Get on the inside now, in case things don’t go our way in the election. People on the inside always find a way to get by.

I hope that this has been helpful to you. If you want to get more information on how to become a certified gunsmith, go to: www.AmericanGunsmithingInstitute.net or for Armorer Courses www.AmericanGunsmith.com

Best regards,

Gene Kelly

President American Gunsmithing Institute (AGI)

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