The purpose of this INTERNAL guidance is to advise the field on how National Firearms Act (NBA) firearms are to be properly registered and transferred. Specifically, what is required of licensed Manufacturers/Special Occupation Taxpayers (SOT), and how to identify FFL/SOT manufacturers who are not in compliance. Registration of NFA Firearms by Qualified Manufacturers or Importers The NFA, 26 U.S.C. § 5841 generally requires each manufacturer to notify the NFA Division of the manufacture of a NFA firearm. The notification effectuates registration in the National Firearms Registration and Transfer Record (NFRTR). According to 27 C.F.R. 479.103, each qualified manufacturer shall file an accurate notice on an ATF Form 2 Notice of Firearms Manufactured or Imported, executed under the penalties of perjury, to show manufactured firearms, All firearms manufactured in a single day shall be included in one notice, Form 2 by the manufacturer by close of business the next day The ATF Form 2 provides that “{t]he undersigned hereby serves notice of the manufacture, reactivation, or importation of firearms as required by § 5841 of the National Firearms Act, Title 26, U.S.C. Chapter 53.” The Form also includes a signature requirement “UNDER PENALTIES OF PERJURY, | DECLARE that I have examined this notice of firearms manufactured, reactivated or imported and, to the best of my knowledge and belief, itis true, correct and complete ‘The NFA makes it unlawful for any person “to make, or cause the making of, a false entry on any application, retum, or record required by this chapter, knowing such entry to be false.” 26 US.C. § 5861(1). The NFA, corresponding regulations, and the ATF Form 2 only permits the registration of firearms manufactured, reactivated, or imported. The ATF Form 2 notification should not be submitted prior to the making of the NFA firearm. The knowing submittal of an ATF Form 2 prior to the actual manufacture of a NFA firearm as defined by the Act is a violation of law and may be referred for prosecution When a Field Division determines that a Form 2 has been submitted for a device that does not ‘meet the definition of a NFA firearm (ie. chunk of metal, unfinished tube, GCA firearm, non- existent firearm) they should contact the NFA Division to request a freeze on the serial numbers corresponding with these devices. This prevents the subsequent transfer of these illegally registered items and flags them for removal from the NFRTR. In lieu of removal, the Director, Industry Operations, in consultation with their Division Counsel and the Deputy Assistant Director (Industry Operations) and approval of the NFA Division Chief, may also negotiate with the manufacturer to complete the item and unfreeze the corresponding serial number. Ifthe decision is made to remove the illegally registered items, written notification of the identified firearms must be submitted to NFA@atf govRequesting a “freeze” on NFA Items ‘The Field Division should notify the NFA Government Support Branch (GSB), via email at \@atl-gov, and state that they are requesting a freeze on specific serial numbers. The NFA Division will then place the serial numbers in ‘UNDER INVESTIGATION” status in the NERTR. The Field Division must identify a point of contact (POC) for any communication in reference to the freeze. This POC will be referenced on an internal GSB list of all entities placed in UNDER INVESTIGATION status. This list will be updated by GSB personnel when an application or entity status has changed, All incoming communication received by NFA from an applicant or entity that has been FROZEN per a field division request will be forwarded to the Field Division POC, The NFA Division will not respond directly to outside inquiries. The NFA Division recommends that the Field Division review the freeze request at least Quarterly to determine if the freeze should remain active, Removal of the freeze should be sent to NFA@atf_gov Subsequent Transfer of NFA Firearms by Qualified Manufacturers and Importers As previously discussed, the submission of the Form 2 and entry into the NFRTR effectuates the registration. The NEA generally requires the approval of the Attorney General to transfer NFA firearms. See 26 U.S.C. § $812. Transfers beween SOT holders is exempt under section 5852(d) These sections require that a NFA firearm as defined by the Act be registered in the NFRTR prior to any transfer to a qualified SOT (27 C.F.R. 479.88) or any other individual 27 CER 479.84), AS 4 practical matter, upon receipt by the NFA Industry Programs Branch (IPB), the firearms listed on the Form 2 as being manufactured are entered into the NFRTR. After the NFA item has been manufactured and the Form 2 has been properly submitted, the FFL/SOT may then submit an ATF Application for Tax-Exempt Transfer of Firearm and Registration to Special Occupational Taxpayer, for approval for the firearm to be transferred to an FFL/SO1's or an ATF Form 4, Application for Tax Paid Transfer and Registration of Firearm for approval for the firearm to be transferred to an individual or FFL non-SOT. At no time should an ATF Form 2 be submitted for devices that don’t meet the definition of a NFA firearm, likewise an ATF Form 3 or ATF Form 4 should not be submitted for these devices An ATF Form 3 or ATF Form 4 can only be submitted after the manufacture of'a NFA firearm and ATF has acknowledged receipt of the ATE Form 2, {tis important to educate FFLs on NFA forms processing to ensure they are aware that submission of multiple forms for the same NFA item can cause delays. Inspection Guidance{mn recent compliance inspections it has been discovered that FFL/ransferees have silencers recorded in their A&D records that they have not physically received, The Gun Control Act of 1968 (GCA), 18 U.S.C. § 923(g)(1) generally requires licensees to ‘maintain records of importation, produetion, shipment, receipt, sale, or other disposition as required by the Atiomey General. The corresponding Federal regulation at 27 C.F R. 478-125 outlines the recordkeeping requirements for licensees, The GCA generally provides that the Attorney General has authority to revoke any license for a willful violation, of any provision of the GCA or corresponding regulations after notice and opportunity for hearing, Seo 18 USC. § 223), Additionally. the GCA includes eriminal liability for any person that knowingly makes any false statement with respect to information required to be kept in the records of « licensee See 18 U.S.C. § 924(a\(1). The addition of a firearm that has not been acquired by a licensee into the licensee's records is @ tiolation of the GCA, Further investigation is warranted for action on the individual's license Likewise, the submittal of an ATF Form 2 which notifies the NFA Division that a NFA firean has been manufactured and the lack of said firearm in the FFLs records warrants additional investigation regarding the falsification of GCA or NFA records, ‘yiten conducting inspections of FFL/SOT manufacturers Industry Operations Investigators (101) should: © Compare the NFRTR to NFA firearms in inventory starting with the most recent registrations. Verify dates of manufacturing © Perform a complete gun — book — NFRTR audit, © Iffirearms are not in inventory, it is possible they have not been manufactured and the Form 2 was falsely reported. This should be documented as a possible violation of ‘the NFA and referred for further investigation © Ithe firearm is not in inventory (or a complete firearm) and in the GCA records, this should also be documented and a GCA recordkeeping violation may be cited. © Ifthe IOI discovers a device that does not meet the definition of a NFA firearm (i.c. chunk of metal, unfinished tube, GCA firearm, non-existent firearm), they should consult with theit Area Supervisor and contact the NFA Division to place a freeze on the serial numbers per the guidance above, Form 2 When conducting inspections on FFL/SOT dealers, 1OIs should: Compare the NFRTR to firearms in inventory. Ifthe FFL/SOT dealer has NFA firearms recorded in the A&D records that are notin inventory a GCA recordkeeping violation may be cited © Ithe FFLISOT dealer has NFA firearms recorded in the NERTR as repistered to the FFLISOT that are not in inventory, further investigation is warranted for falsification of NPA records,Additionally, there are also situations where an FFL/SOT transferee is unaware of a completed transfer. For example, the FFL/SOT manufacturer has secured a Form 4 purchaser/transferee for the NFA firearm and shipped the NFA firearm to the Form 3 FFL/SOT transferce/transferor located in the state where the Form 4 purchaser/transferee resides. During these transfers the FFL/SOT manutucturer will ship the firearm, an approved Form 3, and a copy of a completed ATF Form 4 for the purchaser/transferee. The FFL/SOT manufacturer will submit the Form 4 to ATF on behalf of the FFL/SOT. These scenarios require additional investigation. The licensee (transferor) on the ATF Form 4 must sign and date the ATF Form 4 and should be aware that a silencer is being transferred. The transaction FFL. at minimum should be warned that the FFL is responsible for firearms transferred to or fiom the FFL on their license and that future citation may be warranted. This should also be documented by the IOI for future inspections.