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June 18, 2018

ATF Updates Its Demand 2 Program Criteria

By Wally Nelson, NSSF Compliance Consultant

Through a notice in the Federal Register on June 5, 2018, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) has requested that the Office of Management and Budget approve a three-year extension of its Demand 2 Program, which began in 2000.

ATF is proposing to change the Demand 2 reporting requirements. The Demand 2 Program will now require Federal Firearms Licensees (FFLs) with 25 or more traces in a calendar year, where the time from retail sale to trace is three years or less, to submit an annual report followed by quarterly reports of used firearms acquired by the FFL. Currently, and for most of this past 18-year period, ATF has issued a Demand 2 Program letter to FFLs that have had 10 or more such traces in the previous one-year period. The impact of this change will be that many FFLs that have been on the Demand Program for years will be relieved of the burden of reporting their used firearms acquisitions.

Demand 2 Program Background

the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)ATF’s National Tracing Center (NTC) receives firearms tracing requests from law enforcement agencies. In 2017, it received over 400,000 trace requests. Firearms traces, where the time from retail sale to the law enforcement trace request is under three years, are referred to by ATF as short time-to-crime traces. The idea behind the program is that, if dealers with larger numbers of short time-to-crime traces also acquire older used firearms which might not otherwise be able to be traced, the information on these used firearms can be accessed to successfully complete traces on them as well. This has proven to be true. Since its inception, this program has used been used to complete many thousands of traces successfully.

Under the Gun Control Act at 18 U.S.C. § 923 (g) (5), ATF has the delegated authority to demand in writing that FFLs submit all or part of their required records to ATF. The demand letter describes the records to be submitted. The Demand 2 Program operates under this authority and has been delegated to the Chief, NTC. FFLs on this program receive a letter from the Chief that demands they report information about any used firearm acquisition they make in the current calendar year to the NTC. The NTC maintains a database of this information. Only the nomenclature of the firearm and the date of acquisition are required to be reported. The identity of the person a firearm is acquired from is not reported, nor is any disposition information.

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