Justice Department Publishes New Rule To Update Definition Of “Engaged In The Business” As A Firearms Dealer
Government
The Bipartisan Safer Communities Act (BSCA), enacted June 25, 2022, expanded the definition of engaging in the business of firearms dealing to cover all persons who devote time, attention, and labor to dealing in firearms as a regular course of trade or business to predominately earn a profit through the repetitive purchase and sale of firearms.
On March 14, 2023, President Biden issued Executive Order 14092, which, among other things, directs the Attorney General to develop and implement a plan to clarify the definition of who is engaged in the business of dealing in firearms and thus required to obtain a federal firearms license. The Final Rule conforms the ATF regulations to the new BSCA definition and further clarifies the conduct that presumptively requires a license under that revised definition, among other things.
Federally licensed firearms dealers are critical to federal, state, local, Tribal, and territorial law enforcement in our shared goal of promoting public safety. Licensees submit background checks on potential purchasers to the FBI’s National Instant Criminal Background Check System, which helps to keep firearms out of the hands of prohibited persons. Further, licensees keep records of sales transactions to help ensure that when a gun is used in a crime and recovered by law enforcement it can be traced back to the first retail purchaser; they help identify and prevent straw purchasers from buying firearms on behalf of prohibited persons and criminals; and they facilitate safe storage of firearms by providing child-safety locks with every transferred handgun and offer customers other secure gun storage options. Unlicensed dealing, however, undermines these public-safety features — which is why Congress has long prohibited engaging in the business of dealing in firearms without the required license.
To increase compliance with the statutes Congress has enacted, the Final Rule identifies conduct that is presumed to require a federal firearms license. And, in addition to implementing the revised statutory definition discussed above, the Final Rule clarifies the circumstances in which a license is — or is not — required by, among other things, adding a definition of “personal firearms collection” to ensure that genuine hobbyists and collectors may enhance or liquidate their collections without fear of violating the law. The Final Rule also provides clarity as to what licensees must do with their inventory when they go out of business.
The Final Rule goes into effect 30 days after the date of publication in the Federal Register.
On Sept. 8, 2023, the Justice Department published a notice of proposed rulemaking, and during the 90-day open comment period, ATF received nearly 388,000 comments.