Monday, there was an important development relating to firearms regulated by the National Firearms Act. In 2013, ATF proposed a rule change known as “ATF 41P” that would modify what must be included with an application to make or transfer NFA items. An individual has to submit fingerprint cards, passport-style photos, and signatures from a chief local law enforcement official (“CLEO”). Under current rules, trusts and business entities are do not have submit these items. Now, two and a half years later, a final rule has been published by the federal agency.

The White House announced action on this proposal as part of the president’s raft of anti-gun executive actions. You can read the White House press release here: https://www.whitehouse.gov/the-press-office/2016/01/04/fact-sheet-new-executive-actions-reduce-gun-violence-and-make-our

The final rule was signed by Attorney General Loretta Lynch on Monday and will become effective six months after it is published in the Federal Register. You can read the final rule here: https://www.atf.gov/file/100896/download

Because of its great length (248 pages), I have not yet completed my full review of this rule change. However, be advised that it will substantially change what is required to make or transfer an NFA item. From my first, cursory review, each “responsible person” (i.e., each trustee) will have to submit fingerprint cards and photos, and there will be a background check. The CLEO certification requirement is being eliminated entirely, but it is being replaced with a requirement for notice to local law enforcement. This part is good news, because it means that those of us in less gun-friendly jurisdictions will still be able to complete applications to make and transfer NFA items. Additionally, it comes as a relief that the addition of new trustees/responsible persons to a trust after a transaction will not trigger any additional paperwork or reporting requirement. (See pp. 123-124)

The net effect of this rule change will likely be that trust transactions in the future will be more time-consuming than they are now. It is not clear at this time how, if at all, currently registered NFA items and those still in process with ATF will be treated. It appears that they will not be affected, so it may be a good time to consider getting more transactions underway now in order to avoid the more inconvenient process that will be implemented later this year.