Do Manufacturers need to pay the ITAR fees if they are not exporting?  

Do they need to pay fees if they are not Making guns but repairing them or conversions?

yes, repairs no, conversions yes.









 

So what are the 121.1(b) exemptions?













Thanks

Sec. 122.1 Registration requirements.

(a) General. Any person who engages in the United States in the business
of either manufacturing or exporting defense articles or furnishing
defense services is required to register with the Office of Munitions
Control. Manufacturers who do not engage in exporting must nevertheless
register.

(b) Exemptions. Registration is not required for: ...

(2) Persons whose pertinent business activity is confined to the
production of unclassified technical data only. ...

(4) Persons who engage only in the fabrication of articles for
experimental or scientific purposes, including research and development.

(c) Purpose. Registration is primarily a means to provide the U.S.
Government with necessary information on who is involved in certain
manufacturing and exporting activities. Registration does not confer any
export rights or privileges. It is generally a precondition to the
issuance of any license or other approval under this subchapter.

So if you wanted an 07 instead of an 01 just to avoid any potential issues gunsmithing, and to cover things like assembling AR hits for customers you would still have to pay the ITAR extortion fee?

Yes, assembling AR-style rifles definitely falls under ITAR-related activity.

Sorry to bump this month old thread now, but I have a major question here... I've lurked here for years, but never posted until now.

I've been selling AR parts in my business for awhile and my FFL 01 is in process. I really wanted the FFL 07, but the ITAR stuff really turned me away.

By 'falls under' do you mean ITAR does or doesn't need paid to 'build AR's'?

I would really love to be able to assemble AR's and then sell them, not just sell a lower and then 'gunsmith' it to the user's likings.

Is there a final word on ITAR? From my research I was under the impression that you needed to register and pay yearly to even 'safely' have a FFL 07?

If you are building AR's you need to be an 07FFL.  If you are building AR's with an 07FFL, you need to be registered with ITAR.



 

Thanks for the clarification!

I build uppers and sell other non-FFL items now, and will continue to do so. I will be careful to ensure that my activities are limited to 'gunsmithing', and not 'manufacturing'.

Unless you get a CJ... Then ITAR isn't required, nor do you need to register for ITAR before requesting a CJ.

What is a CJ? Never mind.

I was under the impression that a CJ was on a per item basis, and wouldn't be practical. You couldn't specifically get an exemption for all things AR-15 could you? It seems that trying to get a FFL 07 and then trying to get a CJ would be quite a gamble. On the other hand however, you could technically have a FFL 07 and not make anything, and hence not pay ITAR correct? I am actually a lot more interested in a FFL 07 to get a SOT 2 for the odd chance when I'd want to make a SBR or something for a customer.

Anybody had recently done a CJ?  How did it go?

Ok, what is a CJ?

Commodity Jurisdiction

1. Q: Purpose: What is a CJ?
A: The purpose of a commodity jurisdiction request, or CJ, is to determine whether an item or service is
covered by the U.S. Munitions List (USML) and therefore subject to export controls administered by the
U.S. Department of State pursuant to the Arms Export Control Act (AECA) and the International Traffic in
Arms regulations (ITAR). If after reviewing the USML and other relevant parts of the ITAR, in particular
ITAR §120.3 and §120.4, you are unsure of the export jurisdiction of an item or service, you should
request a CJ determination.


CJ Application:
http://www.pmddtc.state.gov/commodity_jurisdiction/documents/DS4076.pdf

FAQ:
http://www.pmddtc.state.gov/faqs/documents/FAQ_CJ.pdf


So in other words, you would want your item(s) NOT covered by the USML, so they are not restricted, and thus not applicable to ITAR. This is all well and good, but the application asks for models numbers and particular information about a product. That would be fine if you were going to always 'manufacture' part number 'XYZ-AR', but that doesn't help you much if you are 'manufacturing' various guns and/or designs. It would be great if you could get some kind of catch all exemption (like the blackpowder guns) that would enable you to do x number of firearms a year. Sadly it doesn't seem to be likely to get a CJ even if you were making a certain model firearms, as firearms are specifically on the USML list.

You only have to prove in a CJ that the firearm is designed primarily for civilian or LE use.  This gets it exempted from the USML.  The CJ does apply to a specific model, but how many "models" do most small manufacturers have?

Read this.

http://www.silencertalk.com/forum/viewtopic.php?f=4&t=45696

LOL, now I'm even more confused.

That thead gives some better insight into filing a CJ. Then someone steps in and states that they just decided to make their own determination that their product(s) are not applicable because they are for civilian useage. Seems like quite a gamble to simply state that without getting the proper permission from the Dept of State.

Here's the million dollar question... Can you get a FFL 07, not 'manufacture' anything, and not register for ITAR until you wish to 'manufacture' something? Or does getting a FFL 07 automatically make it so you 'should' get the ITAR registration despite what you may or may not ever make? It seems adventageous to get the FFL 07, and then not use it until you need it, then worry about a CJ or ITAR.

If so, I wonder if I can get the ATF to change my application now ( I sent it in as an 01)..

Thanks guys!

I had my FFL 01 ATF interview a couple of days ago.

I was informed that I could switch to a 07 license, however I would need to pay the yearly $2250, and also excise tax on 50+ guns. I was informed by the ATF IOI that they do not automatically report which FFL's are manufacturers, however the ATF has and does report a list of manufacturers when asked by the Dept of State.

I'm not saying the ATF IOI knew everything, but that is what I was told... It conflicts in some regards, as a 07 shouldn't necessarily have to register with ITAR if they don't make anything.

Ohhh, well.. I'll just stick with a type 01 license. I believe the 07 would require more expensive insurance and a whole host of other issues when you wanted to manufacture something. I can do everything I would need to do by simply performing gunsmith type assembly work.

You know, I'd really like to get a 07/FFL, but the ITAR and other headaches in the future prevent me. I really want to do R&D in new small arms.

I simply see no reason why you need to register with ITAR if you don't export anything and especially if you don't do any export business at all with anybody and only deal with native US civilian/LE small arms. How did state stick it's head in and why is the registration $2300, but you get nothing except put on a list?

Seems to be just another road block to the gun business.

Somebody once said that gov't was supposed to protect you from outside invaders and something about not having a standing army....

Let me know when the second American Revolution starts. Eric the Hun told me once I'd have machineguns on the second day. And without ITAR intervention.

It's almost as if they want to discourage manufacturers!

The full list of FFL's (except Type 03 C&R) is public info available as a MS XL spreadsheet right on the ATF's web site.  DoS can go grab it at will.

At least small manufacturers.  A big manufacturer may make enough rifles to easily cover the fee, but a hobby, or small time manufacturer would have a hard time making enough profit to pay the fee.

Does anyone have a link to approved ITAR CJ letters ?

A few people have filed and been exempt form reg and paying the ITAR reg fee of $2250.00

I'd be very interested in this as well. My company is a FFL 01 / SOT 03 now, but I'd glady switch to a FFL 07 / SOT 02 if I could. Business has been great so far, but not nearly great enough to want to hand over $2250 minimum a year to the DoS for ITAR.

I've spoken about ITAR with the DoS direct and FFL manufacturers as well. The truth is many 07's don't pay because they don't know about it,  they don't care, or they aren't talking. Me, I won't play that game though. I need a concise answer before I decide to do it. It's too much a risk. I would like to build some post samples for R&D and potential sales to LEO, but the DoS won't give a clear answer, and the ATF doesn't care if you pay ITAR since it's not them.

More info on ITAR would be great... It's all available, but the info is as clear as mud lol.




Not to bash, but to clarify, the ATF won't issue a FFL for a 'hobby', and it generally wouldn't be a great idea to try. An extremely low sales volume and playing with too many things could get your licensed revoked or yourself in trouble. You definitely need to at least make a business effort about it.

Guys, I sent a email to the DDTC and here is the response -


MY EMAIL:
From: RANDY.WILSON
Sent: Friday, January 27, 2012 10:24 AM
To: DDTC Response Team
Subject: Federal Firearms License Question

I am a home based gunsmith who has applied for a Type 7 FFL (Manufacturers License) to do gun repair. They require I have a manufacturers license as I will be changing barrels on rifles. Do I have to pay the ITAR $2250.00 fee to operate? Thanks for your help!



THE RESPONSE:

If ATF issues you a manufactures license, DDTC considers you am manufacturer of defense articles (US Munitions List Category I, Firearms) and requires you to register.

Go to www.pmddtc.state.gov and on the Home Page click on the link to Registration.  There you will find the application form and complete instructions for a complete submittal package.
If this is a renewal of registration, please note that renewal is exactly the same as registering for the first time.  You must submit a complete package.

Send your documents by courier service (FedEx, DHL, or UPS) to:

U.S. DEPARTMENT OF STATE
PM/DDTC, SA-1, 12TH Floor
Attn:  Registration
2401 E Street NW
Washington DC 20037


Stephen M. Geis
DDTC Response Team
Contractor, XL
NOTE:  Information in this message generally discusses controls and information contained in the Arms Export Control Act and International Traffic in Arms Regulations (ITAR), both of which are authoritative on this matter.  The Response Team fields basic process and status questions, and assists exporters in identifying how to get answers to more complex questions handled by the Directorate of Defense Trade Control's licensing and compliance offices.  The Response Team's services are not a substitute or replacement for the advisory opinion, general correspondence, and commodity jurisdiction processes delineated in the ITAR, which should be used to obtain authoritative guidance on export control issues, and do not in any way relieve exporters from their responsibilities to comply fully with the law and regulations.


This email is UNCLASSIFIED.

That is essentially the same response I received... I'm a SOT 3 dealer and I do a ton of AR-15 stuff, so I wanted to be able to make SBR's for customers. Also would make some 'sales sample' post sample auto AR's to test with products for the local police. Obviously I would need to pay ITAR to manufacture and sell SBR's or any other item to the public. My thought was to do R&D for the first year or two to get some good products developed and refined, and then pay ITAR.

I called the DoS and the first guy I spoke with yelled at me and quickly transferred me to someone else. It went something like this...

Me: Hello, I am a firearms dealer and I am calling in regards to information on exemptions for ITAR registration pertaining to R&D work?
DoS: Exemptions! There are no exemptions! These are *federal* guidlines here! You need to register and pay!
Me: Sir, there is a list of exemptions contained in the ITAR documentation. I wish to comply with ITAR and I need information and clarification on what is and isn't exempt so I can stay in compliance.
DoS: If you wan't to be a manufacturer you have to pay! Why would you manufacture and not register???
Me: I'm sure many businesses have a need for research and development to test new products, and mine is no dif..
DoS: ..Here you can speak to someone else! His name is xxx. [phone system]

I got 'lost in their phone system', so I called the other guy back direct. The first guy was from the Response Team and the second guy did registration. I spoke with the second guy for awhile and he was very nice. Everything we spoke about was hypothetical and as clear as mud. No resolution for me. He said there was no way to get a concise answer on whether or not you were exempt (except for file a CJ and get a response on ONE exact product). He said the DoS would make you prove you were exempt if they found you didn't register. He said it was either a 'make you register and pay' kind of thing, all the way to the max fine and jail time. Not too reassuring.

It's a lost cause... I've spoke with a number of other small manufacturers about this as well. Most of them don't care, so they don't pay. Me I can't sleep peacefully knowing I could get in big trouble lol. Especially since I'd make some post samples. I don't feel like having to explain myself in court despite the fact that the official documentation said I could do what I did.

I guess I'll wait awhile and see if the business is sucessful enough to blow $2250+ a year to those clowns...

It is truly a sad state of affairs this ITAR thing. I called the Washington DC ATF branch and they said "Whats ITAR?". I called a friend who runs a rather large manufacturing facility of NFA devices and he said pffft, never paid it, never will his attorney said we are exempt unless making weapons for the military. Of coarse the DDTC is going to say pay it, they want to fund their useless department. I too however am afraid to proceed without paying the extortion.

Randy

Exactly. Sometime's it's easier to beg forgiveness than to ask permission; but not when it comes to gun laws...

I'd like a clear cut and concise answer before I put my neck on the line. Worst part it, we may never get it. The DoS's stance is that you can't have a FFL 07 AT ALL unless you register and pay ITAR. Even if you literally do no work of any kind, they still require ITAR on their end.

When will people learn to stop sending letters to bureaucrats and instead get legal advice from a lawyer?

YUP, once again the government has us by the balls. I cannot make any money paying those heavy fees in my small business so I guess the anti-gun agenda is working....

Do you personally know of any lawyer qualified enough to make this determination?

That being said, the lawyer can interpret the law and give you advice, but that doesn't keep the DoS from taking things further. Then you are faced with defending yourself. Think that same lawyer wants to represent you? Maybe. But I bet he's a whole lot more expensive than $2250.

It's a great answer, but I don't believe it to be a definitive solution. Plus, I don't know who could be trusted as a lawyer well versed in ITAR and DoS rulings. I certainly don't want to be the test subject.



True. I'll have to speak with my accountant about it more. In all honesty though unless you are doing a really high volume of business, or you are making something or providing a service, the profit in this business is extremely low. They say if you want to make 1 million dollars selling guns, then you better start with 2 million lol.

There are a lot of 07's who research and develop prototypes a long time before they have a finished product.

If you are an 07 and are not done with these weapons , even if they are done enough to do a demo that does not mean you are finished with the MFGing process

You don't submit a form 2 until it is done to your satisfaction.

This is in stone with the ATF

A weapon or weapons are not done and form 2ed until we say they are complete.

 

Just because you have an 07 does not mean you have to reg with ITAR



If you make anything of the munitions list "make" MFGer"



You can buy some time



To all the guys who are worried about getting popped and going to federal prison?

I'll say this, there are exemptions for 07's who are building AR's and other things, they say we have to do our own CJ letters , which we are working on.

They have these rules and will not clarify them to us.

Those exemptions are good for everyone in a criminal court case , they cannot stand up in a federal court and say you avoided paying to reg because you make this and that when this and that has already been exempted out by ITAR themselves.



We had one law firm in NYC tell us there is no charge ITAR can bring for just not reg.

This law firm does nothing but customs work & export.

They told us that every ITAR charge or penalty was tied to exporting along with not reg.



It really pisses me the fuck off.

That is why we are going to file our exemption letters for AR's and AR pistols.

   



 

On the first federal case where someone fights this "fee" ITAR will be overturned.

We already pay a lic fee to operate , it is to the BATFE

IF THIS WAS TRULY A REG FEE IT WOULD BE $2250 PER YEAR!



07's who do not export do not receive any benefit from ITAR
 

I'm sorry, but you are a little incorrect. The NFA Handbook and the GCA laws state:

"7.3.2 Filing ATF Forms 2. All firearms manufactured during a single day must be included on one
Form 2 and must be filed by the manufacturer no later than the close of the next business day. The
manufacturer must prepare the form in duplicate, file the original with the NFA Branch, and keep the
copy with the records required to be kept."

The F2 needs to be filled by the close of the second business day after creation. If you just drilled the sear pin whole in a receiver or built an auto sear, you'd best file the F2 ASAP. That doesn't mean you can't destry that one and make more, or change stuff later, but you can't just build machine guns and leave them sitting around for days, weeks, or months at a time.

The official stance from the Department of State is that ALL FFL 07's need to be registered and paying ITAR. In their eyes a 07 is a 'manufacturer' and is required to abide by ITAR.

Nearly every firearm piece is on the US Munitions List and is covered by ITAR. As you stated a Commodity Jurisdiction (CJ) is needed to clarify what you are building is exempt. The CJ covers only one model product only. You would need to do a different CJ for anything you plan to make. I've heard that getting a CJ granted for something that is expressing on the Munitions List (and most everything is) is about as rare as seeing a unicorn. The CJ keeps you safe, but it seems pretty hard to get a CJ on something like an AR-15 in which you are assembling pieces that are almost all on the USML.

The law firm sounds correct, but is it worth the risk, that's the question?

The guy from the DoS told me that unless they see your company name come up on a list of something that is being exported they wouldn't know your sales. The full list of FFL's by type however is listed for public access on the ATF's website. Do you trust the DoS won't simply download the list and draft up some letters? It's kinda one of those things that just because you can get away with it doesn't mean you won't get caught.

You are correct to say that manufacturers who do not export do not *benefit* from ITAR, but unfortunately it does keep *not* registering from being *illegal*.

I like what you are saying very, very, much, but to be completely honest it's still too gray to make that decision.

I'm not incorrect at all.



The tech branch, legal told us this in writing and on the phone.



A weapon is not finished and complete until the MFGer says it is.



You might want to see if you can find something on this before you tell me I'm wrong.
When we are building something new and not sure if it's ready we take it apart, change things , test fire it , it's not done until we say it is.



The ATF does not make you file a form 2 the second you drill the sear pin hole.,



When you make a weapon and file the form 2 it goes into the reg.
It's not a weapon under the guide lines for a form 2 until you as the MFGer are finished with it and it's ready to sell or otherwise.
A lower drill & milled is tech a machine gun and that point but not fully completed into a weapon needing the form 2 filed..



We work with the NFA pretty close and get whatever guidance we need and they have not steered us wrong yet.
You are correct about one thing, once a weapon is MFGed it needs to be form 2ed.



The point you missed is it is not done until the 07 says it is done.
Edit to add this:


You can hold an 07 and make 20" shotguns, you do not have to reg with ITAR


Only 07's making things not exempt have to reg with ITAR





Just because you have an 07 does not mean you have to reg.
 

The statues in the Gun Control Act do not coincide with what you are saying. The ATF has however, as you said provided letters and written documents that don't exactly always coincide with what they state in law. Some things are open up to a bit of interpretation. Would you mind posting a copy of your letter from the ATF concerning manufacturing? It would be a trememdous help to other manufacturers of NFA weapons. If not, can you show where else it may say it is OK to not file a Form 2 for a NFA production by the second business day as is said above? That is a direct copy and paste from the ATF's 'NFA Handbook'. I'd love to hear otherwise to put my mind at ease.

Yes, there is an ITAR examption for sporting shotguns.
According to the Department of State however, you must register and pay if you are a 07 and do nothing. It's not 'right', but it's their stance on the issue.

I think I'm going to try and speak with the NFA Branch and see if I can get some guidance in this area. I'd love to get something in writing saying I can 'do NFA R&D work and not have to register for ITAR'. Not sure if anyone will do it however.

jrzy can you assist further please?

Please post copy or provide link to this "official stance".



 

Here's the ITAR registration instructions for Manufacturers. It outlines that everyone manufacturing items on the US Munitions list must register for ITAR. A FFL 07 is a manufacturers license, and all firearms and most parts are on the USML except for shotguns with 20"+ barrels and other oddities.

http://www.pmddtc.state.gov/regulations_laws/documents/official_itar/ITAR_Part_122.pdf

If you call the DoS Response Team they tell you that everyone must register. I'm sure they wouldn't have a problem putting that in writting. The ATF will also tell you to register for ITAR, but they don't enforce it because it isn't any of their business. I just had a compliance inspection done, so I spoke my my IOI, the Pittsburgh, PA ATF field office supervisor, and the ATF FFL Licensing Center woman who processes and approves licenses for PA and other states. They all told me that the DoS has asked them to inform FFL's of ITAR, however it was not their duty to enforce it.

The answer I believe we all need here is 'how not to have to register and pay'.

I'd love to buy the FFL 07 and the SOT 02, but I need some better answers. There is simply no denying it that if you want to stay on the good side of DoS, and you make items to sell to the public, then you need to register and pay ITAR. What I'm still debating is if I can legally and correctly not pay ITAR for the first few years while I do R&D work. When it comes times to sell, I'm sure I'll have to register and pay. I appreciate everyone's responses, but anecdotal reasonings of how/why you don't pay doesn't cut it. One needs official proof to do things correctly, and I'm having a hell of a time getting the correct evidence I need here.

CLIFF NOTES:

I'm a FFL 01 / SOT 03. I want to be a FFL 07 / SOT 02. I need proof that I can do R&D and NOT pay ITAR. Further evidence that manufacturing AR's and other items means ITAR does NOT need payed.

Thats what I said, there are 07's who do not MFGer anything on the munitions list so they do not have to register for ITAR



 

This is not a gray area at all.

You have to file a form 2 with the NFA when the gun is COMPLETE

The gun is not complete until the 07/SOT FFL is satisfied it is complete.

You might want to look up and see when that is but you won't find it.

A weapon cannot be in a finished status until the 07 says it is.



You could make 100 full auto AR 15's and not install the BCG & Charging handle because they are on back order and those weapons are not finished yet, no form 2 would be required at that point.



 
 

I understand that, no problems. Can you please give an example of something that your company manufactures that is not on the USML? Sporting shotguns, perhaps?

Earlier you were talking about filing a Form 2. A Form 2 is for the creation of a NFA weapon to 'register' it with the ATF. As far as I can tell, every NFA weapon would be on the munitions list.

For example, I'll list two things that apply to my business.

1. I'd like to make post sample full auto AR-15 style machine guns to test various upper receivers and weapons systems. I would then sell the uppers (which are not firearms, and so long as I'm not manufacturing the compents which are on the USML, then ITAR is not there). This would be 'R&D' work, however I want to make sure I am exempt from ITAR. DoS still says I must pay. I need proof otherwise.

2. I'd like to do custom AR-15 builds and sell to customers. I'd like to manufacture short barrel rifles for customers and transfer to them on a Form 4. These are on the munitions list as they are firearms. In this situation, I would have to register and pay ITAR to stay in complance. I wish this was not the case, but it is.




I'm sorry but that still does not make any sense. The law clearly states the 'end of the second business day'. The lower receiver with the sear pin hole is a 'machine gun' in the eyes of the ATF. A BCG and charging handle are not a 'machine gun'. I see what you mean in response to say silencer parts or something else, but with an actual machine gun, I do not see how it 'isn't finished until you say so as a manufacturer'. I believe you when you say you have ATF NFA Branch clarification on the matter. They're certainly swayed their interpretation before.

It's fine, it's pushing the thread off topic. I'm mucchhhhhh more concerned with having to pay ITAR.

We are working on our CJ letters with our lawyer.

There are already many 07's who have been granted exemption from ITAR reg after their CJ letters were approved.

The State dept has said (verbally) that someone else's CJ letter does not exempt you or I but will not put that in writing.

Why?

Because it certainly would cover you and I if we are all making Mil spec AR 15's

So to be safe we are going to file CJ letters for everything we make including NFA weapons



They cannot exempt XYZ company making a 16" mil spec AR 15 and then turn around and refuse to except you and I making the same thing.



Getting anyone to show us their CJ letters is not easy and so far no one has.

So once we get them approved I think we will redact our info and allow other 07's to see our work and use it for themselves.
 

Just because the ATF says that the lower is at that point after milled and drilled a Machine gun does not make that a complete weapon.


And only a complete weapon or DIAS would need to be form 2ed after it is finished.






ETA:

Also a weapon is not complete until after it is engraved with your info , name city , state

So what if our company engraves after the weapon is ready in all other facets?

It's still not a complete weapon yet, it needs to be engraved.



The ATF agent explained it like this, in this instance the govt does not want to get involved with telling an 07 when they are complete with the MFGing process.
 

Thank you for the better explanation of the manufacturing process in the eyes of the ATF. It makes a whole lot more sense now. In my case, I'd still likely get the receiver engraved first and file a F2 pretty quickly while I test stuff. The stuff I'd be building is known designs, so it's not like it takes a whole lot of time to manufacture.

If you were to share your CJ and other ITAR information with other dealers it would certainly be quite a help to many. I'd be extremely interested in reading the materials myself.

Anything else that can be offered up on ITAR? Any advice? Specifically, I'd be really interested in best practices and how 'much' I can do as a 07 (including SOT 02 NFA stuff) before I 'need' to register and pay ITAR?

Will I be OK making post sample sales samples and 'testing' for awhile before I do any real production? There certainly won't be any export and no product sales.

That is what I thought. There is no such policy, as it would conflict with Federal Law. I understand you may have talked to someone who may have told you you had to register, but that does not mean they are correct. I also know my discussions with ATF and DOS are completely different than yours, so you should not draw generalized conclusions based on talking to one person. This is why I wanted to see it on DOS letterhead as an official policy.





I also know it is often a very moot point, since most 07s do engage in activities that would require them to register.





The registration flowchart, I posted on the first page, is still in compliance will all Federal Laws and regulations.





 

The only lawful purpose to make a machine gun is for sale to LE/MIL or export. Making it to test uppers is not legal.





From the Instructions on the Form 2:





2. Machineguns a. 18 U.S.C. § 922(o) provides that machineguns may be made only for government use or export.
 

You are correct that it is illegal to build MG's for 'testing' only.

It is however 100% legal to manufacture machine guns by SOT 02's for 'sales samples' and it is 100% legal to 'stockpile for future sales' to LEO/Military.

If you know the correct interpretation, please share. If you make a MG for potential sale to LEO, you will need to test it, so that is 'testing'. I guess it may be something of a slippery slope and may solely depend on 'how you say it' as many of the things sound alike. Obviously your only sales audience of a post-sample is going to be LEO/Mil/Gov't so obviously your manufacturing would be for future sales consideration.

In speaking to other SOT 02's the consensus was that you could make as many post-sample MG's as you felt like, and the ATF wouldn't bat an eye. Is that incorrect?

NFA Handbook:

"Section 7.5 Manufacturing machineguns. Section 922(o), Title 18, U.S.C., makes it unlawful to
possess or transfer a machinegun, except for transfers to or possession by Federal and State agencies or
the transfer or possession of a machinegun lawfully possessed before the effective date of the statute,
May 19, 1986. So, machineguns “lawfully possessed” before the effective date are those manufactured
before May 19, 1986 and registered in the NFRTR. See also Section 7.6 on the manufacture of
machineguns by contractors of FFLs/SOTs.

7.5.1 Manufacture of machineguns for sale to government agencies or as “sales samples”.
Notwithstanding the prohibition in Section 922(o), qualified manufacturers may manufacture
machineguns on or after May 19, 1986 for sale to Federal and State agencies or to FFLs/SOTs as “sales
samples” for demonstration to prospective governmental customers.125 The weapons may be
manufactured and stockpiled in contemplation of future sales, but their registration and subsequent
transfer are conditioned upon and restricted to sales only to government agencies or as sales samples.
See Chapter 9 for a discussion of the required documentation supporting these sales. See also Section
7.6.1 on the manufacture of machineguns by contractors of FFLs/SOTs."


Here's the text that specifically addresses 'testing' as illegal.

"7.6.2 Manufacture of machineguns solely for purposes of testing. The manufacture of machineguns
solely for testing or research purposes is not recognized as a legitimate exception to the ban on
possession or transfer of firearms under 18 U.S.C. 922(o). As previously stated, manufacturers may
only manufacture machineguns on or after May 19, 1986 and stockpile the same if they are
manufactured and held for sale to Federal or State agencies, for distribution as “sales samples,” or for
exportation."

Theoretically yes, but if you made 10,000 and had zero sales I think someone at BATFE would bat an eye.



What you cannot do is "make post sample full auto AR-15 style machine guns to test various upper receivers and weapons systems". The purpose of making them must be for sale to LE/MIL or export. You cannot make them to test other parts that will not be sold with the firearm.

I hear ya. I mis-spoke. I do enough title I and NFA sales so I'm not worried there. It's hard to sell to LEO, especially with machine guns, as they'll likely want Colt, FN, HK, etc, something with known reliability and such. The stuff I'd need the post samples for would be a whole 'weapons system' and not just an upper (well it would still be available seperately if desired). I imagine I'm in the clear there, but I'll keep researching just in case.

Do you happen to know what draws the line with post-samples? Is it all up to interpretation and how hard the ATF wants to make your life, or is there some cut and dry answers? Regs state the above, but that doesn't necessarily always mean the end-all be-all according to the ATF lol.