Manufacturers, ITAR, and ECR

If the title of this post is just alphabet soup to you then you are in the majority. But if you are a manufacturer of firearms or firearm parts then you best know these acronyms!

The International Trafficking in Arms Regulations (ITAR) is the Federal law that governs all manufacturers of defense articles. What is a defense article? Anything that appears on the United States Munitions List (USML). Unfortunately for firearm manufacturers, all firearms are covered by USML Catergory I or II.

Because firearms, and their parts, are on USML I and II, all manufacturers must register with the Directorate of Defense Trade Controls (DDTC). The ATF is just figuring this out and is now notifying many, but not all manufacturers, that they need to register. The kicker? The DDTC annual registration fee of $2250 makes the FFL license look cheap!

Well great. Now we know manufacturers need to pony up another $2250 a year to Uncle Sam for the “privilege” of exercising a constitutional right. But what does ECR mean?

Glad you asked. The Export Control Reforms (ECR) is a Presidential initiative to streamline the export process and focus the US Government’s attention only on items that matter. Under the pre-ECR system, all defense products were treated the same. Lug nuts for a hummer were given the same protection as block buster bombs. Not exactly a focused enforcement effort.

The President, to his credit, realized that some items didn’t warrant extensive control, and that these regulations were hampering our businesses. To solve this issue, he used an executive order to redraft the USML and to transition unnecessary items off of the USML and onto the Commerce Control List (CCL).

Manufacturers of items on the CCL do not have to register, but they still must follow all applicable laws for exporting items. For a manufacturer that does not export, this is simple and cheap. Much simpler and cheaper than registering with the DDTC.

Now for the real news. The Presidential task force is in the process of proposing a rule that will change USML Category I and II. (See here and here). If this rule is properly drafted, manufacturers of civilian firearms could be exempted from registration. This would be wonderful news for the small time manufacturer and for the one off specialty shops.

What will actually happen remains to be seen. But once these proposed rules come out, I strongly encourage all manufacturers to weigh in and encourage the task force to limit the scope of firearms regulated on the USML. After all, no one is waging war with bolt action rifles, double barrel shotguns, and classic six-shooters.