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December 30, 2010

ATF Issues Ruling on Interim Processors


ATF has issued a ruling (ATF Rul. 2010-10) to end the need of interim processors (a/k/a “secondary manufacturers”) to obtain a manufacturing license and/or marking variances. Under this new ruling, dealers (Type 1 FFLs) will be able to blue, heat treat, polish, etc. firearms in the process of being manufactured as long as they have a contract with the primary manufacturer, receive the firearms (receivers/frames) properly marked from the manufacturer and return them directly to the manufacturer.

In addition to eliminating the need for marking variances, presumably interim processors will no longer have to register as “manufacturers” of USML “defense articles” and therefore be exempt from paying the Department of State DDTC fees as otherwise required by the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR).  NSSF is checking into this with the Department of State. NSSF is also checking with the Tax and Trade Bureau (TTB) to ascertain whether interim processors remain responsible for paying the manufacturing excise tax.

This is a very welcome and long sought improvement that is directly attributable to industry’s ongoing dialogue with ATF.  This dialogue includes our Industry-ATF quarterly meetings, ATF-Manufacturer meetings designed to better educate ATF about modern manufacturing processes, and tours of “secondary manufacturers” to help show ATF that interim processors are in fact not “manufacturers.”