Global Security, Privacy, & Risk Management

US Compliance; FFL & ITAR December 12, 2011

The United States allows both individuals and companies to purchase firearms for personal as well as business use.  Much to the surprise of many (even other Americans), it is a right to own automatic weapons and silenced weapons assuming the proper checks have been passed and taxes paid.  The US also allows companies to export US firearms with the appropriate licenses.  The ability to obtain firearms at a low cost and export those firearms gives US companies some advantages in armed security.  That being said, there are some very strict laws with which companies and individuals must comply.  Understand that these are Federal US laws and state laws may vary.

If your company is thinking about doing business with a US company, it is imperative that you know the rules and ensure that your vendor is in compliance.  If they are not in compliance, both the vendor and your own company may come under scrutiny and, at worst, may have legal implications.

Federal Firearms License (FFL)– This license allows individuals and companies to ‘own’ ‘manufacture’, and ‘sell’ firearms including pistols, rifles, shotguns, and the like.  A ‘class 3’ license also allows for the ownership, manufacturing, and sale of prohibited firearms such as automatic weapons, suppressors, and short barreled weapons.  In short, if a US company is claiming to have access to firearms they must possess an FFL and (this is important) all firearms must be owned under the company’s name and company’s FFL.  Remember, in the US individuals can own firearms.  It is easy for someone to purchase firearms under their personal name and claim that they are owned under the FFL.  The Bureau of Alcohol Tobacco and Firearms (ATF) requires very strict documentation for all firearms bought, sold, manufactured, modified, or disposed of under and FFL.

International Arms Traffic in Arms Regulation (ITAR) controls the importation and exportation of ‘defense articles’.  This includes firearms, night vision equipment, and other items that are controlled by the US Government.   The ITAR is a component of the US’ Arms Export Control Act of 1976.  The US Government strictly prohibits and controls the export of certain firearms and other technology.  The act does allow, however, individuals to travel with up to 3 firearms for ‘personal use’ (Such as hunting) provided the individual returns with the firearms.  Disposing of the firearms is a felony.

When evaluating a US company with which to do business it is not enough to know that they have an FFL and ITAR.  You want to ensure that the company is in compliance with the regulations.  I have a drivers’ license but if I consistently drive while intoxicated, I am not in compliance with the license.  Here are some questions that you can ask your vendor.  Always get evidence of the answers and documented proof for your records.

1) Are all firearms used in conjunction with the contract purchased and owned under the company’s FFL?

2) Are only firearms registered under the FFL exported under the ITAR license?  (for each transit ensure that a list of firearms and serial numbers are listed for your records)

3) Are all firearms returned to the United States in accordance with the ITAR license?

The last point is particularly relevant and includes components of the first two.  Since many merchant vessels are operating close to areas that are on the US” prohibited list (Sri Lanka, for example), US companies are under particular scrutiny in these areas.  If the firearms are exported to the US and into the theater and then simply ‘disappear’ or are not returned to the US it could raise serious issues for the vendor and their clients.  Obviously, the US government is concerned about firearms being put in potentially the wrong hands.

**As another important point, the ITAR only allows for the exportation of firearms from the US, the vendors are responsible for obtaining all relevant licenses in countries in which the firearms will be transferred through or used.  Failure to do so can result in arrest and/or prosecution in the country in which the firearms are transferred.

In addition to obtaining all ITAR and FFL information, ask for evidence of appropriate licenses in foreign countries, as well.

By following these simply rules, and asking a few questions you can have confidence that your security vendors are operating in a manner consistent with the US Government regulations.