Recently the ATF published Procedure 2017-1 (not ATF Ruling 2017-1).

ATF Procedure 2017-1 "set[s] forth the record-keeping and National Instant Criminal Background Check System (NICS) procedures for a Federal firearms licensee (FFL) who facilitates the transfer of firearms between private unlicensed individuals."

In this article, we’re going to cover:

Basic Background and Requirements for Private Party Sales

In order for an FFL to lawfully transfer a firearm to a customer (non-FFL), the FFL must:

1. Take the firearm into their inventory,
2. Record the firearm into the FFL's Acquisition and Disposition (A&D) Record,
3. Have the customer (non-FFL) complete a Form 4473, and
4. Conduct a NICS background check prior to transfer (if no exemptions apply).

The FFL must complete a NICS check (unless an exemption applies) per 18 U.S.C. 922(t)(1) and follow the associated requirements in 27 C.F.R. 478.102, 478.122, 478.123, 478.124, and 478.125.

If your eyes just glazed-over after seeing the laws and regulations to be followed for this transaction...don't worry! We cover ALL of this and more in an easy-to-understand way in our ATF Compliance course.

What does all this have to do with transfers between two non-FFL persons? Great question...

Non-FFLs can't use the NICS system, and some states prohibit private transfers unless a NICS check is conducted on the buyer. Therefore, people in these states must use an FFL to assist with their private transfer.

Also, a private seller has no way of knowing whether the potential buyer is allowed to possess the firearm so they may want to have a NICS check run even though it isn't required in their state.

ATF Private Party Sales Guide To solve this problem, the ATF published ATF Procedure 2013-1 which provides guidance to FFLs on how to handle these private party gun sales and transfers. Years later, the ATF also published a guide on Facilitating Private Sales.

If you are a customer of RocketFFL, or if you at least follow along with our information, you already know that the ATF updated the Form 4473 and the new version went into effect on January 16, 2017.

This new ATF Procedure 2017-1 (which replaces ATF Procedure 2013-1) addresses the changes in the new 4473 from earlier this year.

New Procedure Outlined in ATF Procedure 2017-1

The purpose of this Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) procedure is to update the record-keeping and National Instant Criminal Background Check System (NICS) procedures for a Federal firearms licensee (FFL) who facilitates the transfer of firearms between private unlicensed individuals. This procedure replaces the prior procedure on this topic, ATF Procedure 2013-1, and does not apply to pawn transactions, consignment sales, or repairs.

General Procedure:

1. The prospective buyer must complete Section A of the Form 4473;
2. The FFL must complete Section B of the Form 4473, conduct a NICS check on the prospective buyer, and record the response;
3. The FFL must complete Section D and check the box in Item 32 on the Form 4473; and
4. The FFL must maintain the Form 4473 in accordance with 27 CFR 478.129(b).

The FFL must check the box in Item 32 on the Form 4473 to ensure it can be determined which transaction records correspond with private party transfers in the FFL’s A&D record. If the box is not checked, and there is no corresponding entry in the A&D record, ATF may conclude that the FFL transferred a firearm without making appropriate entries in the FFL’s A&D record.

Note: There are specific circumstances which have different requirements. Please review the full text of ATF Procedure 2017-1 available at the bottom of this article. These special circumstances include, A. Immediate "Proceed" Transactions, B. "Denied" or "Cancelled" Transactions, and C. "Delayed" Transactions.

When completing these transactions, you as the FFL, must still follow the normal requirements that apply as if you were selling the firearm from your inventory.

For example, you must have secure gun storage devices available, you must follow the special rules for NFA items if they apply, and you must follow all of the other requirements under state and local law.

Also, multiple handgun and multiple rifles reports must still be made if applicable (depending on firearm type and your state of operation).

Each of these are detailed in ATF Procedure 2017-1 below.

ATF Ruling vs. ATF Procedure

Please note the ATF published ATF Procedure 2017-1 (not ATF Ruling 2017-1). "Procedures" are not "rulings."

There's not a lot of difference between the two when it comes to enforcement, however, RocketFFL aims to arm you with the knowledge you need to succeed as an FFL.

If you read our article on How to Become an FFL and took our course on how to get an FFL, you already know the difference between laws, regulations, and rulings.

Specifically, you know that regulations are made to enforce the laws and rulings help to explain the regulations. A procedure is unique in that it establishes the methods for performing operations in order to comply with the laws and regulations.

You won't get cited by the ATF for failing to follow a ruling or a procedure. This is because neither are enforceable by the law. Instead, however, the rulings and procedures are used as a "precedent." That's a legal term describing information that is used to help interpret what action constitutes a violation or not.

This is language from the ATF that helps describe the difference between rulings and procedures:

". . . The Bureau publishes rulings and procedures to promote uniform application of the laws and regulations it administers. Rulings interpret the requirement of laws and regulations and apply retroactively unless otherwise indicated. Procedures, how-ever, establish methods for performing operations to comply with such laws and regulations.

Rulings and procedures reported in the Bulletin do not have the force and effect of Treasury Department regulations, but they may be used as precedents. In applying published rulings and procedures, the effect of subsequent legislation, regulations, court decisions, rulings, and procedures must be considered. Concerned parties are cautioned against reaching the same conclusions in other cases unless the facts and circumstances are substantially the same. . ."

I hope that this information helps you understand your requirements as an FFL and helps to educate you on these potentially confusing terms.

I look forward to having you in our industry,