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ATF Compliance Inspection | NICS Instant Check Exemption | Second Installment Top Ten ATF Public Safety Violations

By: J R Valdes
Firearms Licensing and Consulting Group, LLC
ATF Industry Operations Investigator (Ret.)
Firearms Industry Consulting
Firearms Industry Compliance Analysis

Avoiding ATF Public Safety Violations: Second in the series.

18 U.S.C. 922(t) requires the transfer of a firearm by a FFL to a non-licensee to be preceded by conducting a NICS criminal background check. There are 3 exceptions to the NICS requirement (see 27 CFR 478.131 and 27 CFR 478.102(d)). It is extremely important that FFLs read and understand the details and additional requirements of the regulations pertaining to the NICS exemption.

Failure to contact the NICS criminal background instant check system when required is considered by ATF to be a “Public Safety” violation . There are only three instances in which the FBI/NICS check is not required when obtaining the ATF Form 4473 for a transfer of a firearm to a non-licensee.

When is NICS not required?

1) Transfers of NFA (National Firearms Act) firearms approved by ATF
2) When a qualifying “permit” is presented by the transferee
3) When it is “impracticable”
See 27 CFR 478.131 and 27 CFR 478.102(d) for clarification and details regarding these exemptions.

Note that these instances are related to transfers requiring the ATF Form 4473.

Common reasons for failure to conduct a NICS check.

Corporate Officers/Responsible Persons
The FFL mistakenly believes that a person close to the business, perhaps a Responsible Person, is exempt from the NICS background check. Also, the president of a firearms business structured as a corporation incorrectly believes corporate officers are exempt.

Unacceptable Concealed Carry Permits
There are instances in which the FFL mistakenly assumes that an exemption from NICS exists because the transferee is in possession of a qualifying concealed carry permit. Not all concealed carry permits are acceptable. ATF provides information on their website that clarifies which states have qualifying permits.

Law Enforcement Officers.
Many inexperienced FFLs assume that law enforcement officers are exempt from NICS background checks. Police officers sometimes assume that they are exempt as well. Unless the P.O. is acquiring a duty weapon and provides proper documentation, a NICS check is required (27 CFR 478.134).

The “I Know Them” Syndrome
Occasionally, FFLs will transfer a firearm to someone they are very personally familiar with or may have known for years. A family member, neighbor, boss, colleague, etc., and relying on their assumption that the person is not prohibited, don’t feel like they have to contact NICS prior to transferring the firearm, but with the intention contacting NICS after the transfer to make sure. What inevitably happens is that the NICS check is never done because the FFL forgets. Hopefully, the person is in fact not prohibited.

Uncommon Reason For Failure
Intentional Disregard or Plain Indifference to the law.
If ATF can prove a willful violation of the GCA, the license will likely be revoked. See article for a discussion of ATF revocation criteria.

Recap / Likely Administrative Action
Failure to conduct a NICS background check when required is considered a public safety violation. A violation such as failure to conduct a NICS background check prior to transferring a firearm to a non-licensee would likely require a Warning Conference. What that means to you is having to take a ride down to the ATF Area Office, and sitting with the IOI (Industry Operations Investigator) who conducted the inspection, the Area Supervisor, and possibly the DIO (Director, Industry Operations) to discuss the violation as well as any other violation or issues related to the inspection.

ATF Warning Conference

ATF wants to make sure that you understand the seriousness of the violations cited as well as evaluate your understanding of the regulations. ATF also wants to document that you understand your responsibilities, have all your questions answered, determine what corrective action you have taken, and what policies you have in place to avoid future violations. Furthermore, ATF wants to document that you have been warned that repeated violations of the same type may be considered willful and cause for revocation.

One violation of the Gun Control Act is sufficient for revocation of a federal firearms license if the violation is proven to be willful. However, under most circumstances, even in the case of public safety violations, ATF will seek to establish certain criteria prior to attempting to revoke a firearms license.

Best Practices to Avoid Violation

With the exception of intentionally neglecting to contact NICS, the common instances of failure outlined above and others not discussed, can be easily avoided by a shift in thinking. The FFL should adopt a mindset of extreme caution each and every time a firearm is transferred to a non-licensee. Your business will always benefit from being exceptionally careful when transferring firearms to non-licensees. FFLs should assume that all transfers to non-licensees require a NICS background check unless it can be positively shown in writing that NICS is not required. Strict compliance is your safeguard against ATF action as well as civil liability. This tactic puts the burden of proof on the side that protects your business, and will prevent public safety violations.

Listen To Me, I Know-It-All

Never rely on word of mouth. Retail firearms dealers at times rely on the word of other dealers, internet forums, or sometimes even “knowledgeable” customers to answer regulatory questions. Sometimes information is bad but prevalent because “I’ve always done it that way” is an acceptable answer to some folks. It sounds crazy, but it’s true. It’s a bad…….really bad idea to rely on word of mouth in the firearms business. If you cannot find the answer, call the local ATF office and speak to an IOI about the issue; part of their job is to answer questions from Industry about regulatory matters.

Contact: FFL Consulting Group at 786-759-1226 or for questions regarding anything covered in this article.

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