View Full Version : ALERT: Fingerprint / photo reqs for Trusts/Corp coming soon?
I'm sure most of you've heard of the CLEO sign off for individuals going away potentially. Well, that's good news, but what I didn't realize until today is that the main purpose (title) of the proposed change is to require each responsible member of a trust of corporation to submit fingerprint cards and photographs. This new regulation hasn't been adopted yet, but supposedly it's in the stage of "proposed rule making" so it may only be a matter of time.
The Department of Justice is proposing to amend the regulations of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) regarding the making or transferring of a firearm under the National Firearms Act. The proposed regulations would (1) add a definition for the term "responsible person"; (2) require each responsible person of a corporation, trust or legal entity to complete a specified form, and to submit photographs and fingerprints;
http://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201210&RIN=1140-AA43
This would be a huge strike against the trust/corporate route and would add time and complexity. I would imagine processing times going up as the rate of paperwork errors should increase when everyone has to submit additional documentation.
Does anyone have more information? This seems to be sneaking under the radar compared to all the AWB talk. I've had some items I've been meaning to Form 1, and I'm going to do so within the next few weeks so I don't have to deal with these new potential requirements.
Very clever, incremental and under-the-radar step toward the Feinstein agenda. Regulatory reinterpretation without all of that messy and unpredictable legislative process.
After a quick look, I believe this is the Obama administration's reg agenda, which is an agenda the administration is supposed to put out twice a year. The administration only issued one last year and it was put this out after the middle of Dec. 2012.
In other words, I think this comes from the document that the administration uses to inform the public about what rules/regs it is planning to propose.
So far, it doesn't look like they have filed a notice of proposed rulemaking (proposed regulatory change) based on a quick RIN number search (although someone may have other input here) but it looks like they are anticipating doing so no later than July 2013. That said, just because it is listed in their reg agenda doesn't mean that the agency will actually move forward with it, although there's no reason to expect DOJ to sit on this one.
Once DOJ posts a NPRM in the federal register the public will have a certain period of time (usually 30-60 days) to file a comment letter. In addition to doing this, the best thing to do would be to send letters to members of Congress who may have oversight of DOJ (thinking House Republicans here). Congress can cut off funding for certain regulatory adventures but its fairly uncommon. Otherwise, you left with trying to persuade the DOJ that the proposed rule (NPRM) isn't a good idea.
Step 1. Close the trust/corp "loophole"
Step 2. Add all "assault weaopns" to the NFA registry.
Now even private sales will have to transfer on a Form 4, with a $200 tax and months of waiting.
New sales on a basic AR15 will incur a ~8+ month waiting period.
Smart. They're clearly playing chess.
Sorry if I misread. Did you say we will no longer be able to do the CLEO route for this and that any NFA will REQUIRE a trust of some sort?
Sorry if I misread. Did you say we will no longer be able to do the CLEO route for this and that any NFA will REQUIRE a trust of some sort?
No.
The good news:
Applications by individuals will no longer require their CLEO to sign off. Still requires photographs and fingerprint cards.
The bad news:
Unlike previously, where they were except from this requirement, trusts and corporations will now need to have each "responsible member" submit their photographs and fingerprint cards.
This eliminates most of the perceived benefits of the trust/corporate route. There are still some benefits like being able to have your wife/brother/pet squirrel have access to jointly owned/controlled NFA firearms .
I am curious to know why they would want to eliminate the CLEO signature requirement for approval.
Just seems as though if would be a deterrent for ownership in some areas. If that's the main goal of these changes.
Lawnchair 04
01-09-13, 17:37
I need to get my forms together for an sbr real soon than.
I am curious to know why they would want to eliminate the CLEO signature requirement for approval.
Just seems as though if would be a deterrent for ownership in some areas. If that's the main goal of these changes.
In some jurisdictions it has been either difficult or impossible to get past this first stage in the NFA process because some individuals in authority will not handle this part of their work load. Thus denying the citizen/individual applicant the opportunity to possess an NFA item.
I am curious to know why they would want to eliminate the CLEO signature requirement for approval.
Just seems as though if would be a deterrent for ownership in some areas. If that's the main goal of these changes.
The thought on that is that is probably since an individual gets called into NICS, so the CLEO signoff was a legacy element from the pre-NICS days.
oberstgreup
01-09-13, 22:19
I am curious to know why they would want to eliminate the CLEO signature requirement for approval.
Just seems as though if would be a deterrent for ownership in some areas. If that's the main goal of these changes.
I think these suggested changes come from the folks in the NFA Branch and not the White House, and precede the current frenzy over the Newtown murders. We've been hearing rumors about this for many months now.
What they're essentially doing is making the individual application process and the trust application process the same. Good news for individual applicants, bad news for trust applicants. As has been noted, the other advantages of trust ownership are still there.
You can thank the NFATCA partially for this because they worked with the BATFE on this matter and in fact is was published in one of the issues of SAR.
We'll be lucky if fingerprints and photos are the only new obstacle in the way of continuing with NFA purchases.
Right now, the general assumption seems to be that the limited number of NFA examiners is what slows down the NFA process. But I was under the impression that NFA farms the actual background check out to the FBI.
Regardless of the number of new examiners they have added or might add in the future, I would think that adding that many more background and fingerprint checks to the system, trust applicants AND the influx if all "assault weapons" have to be NFA, is going to bog the system down incrementally further. Feinstein's mention of NFA registration includes more funds for ATF, but it seems to me that, at some point, FBI personnel checking fingerprints and doing background check becomes the major stumbling block.
elkslayer44
01-10-13, 09:11
This new rule COULD be a good thing...but I'll withhold judgment for now. Let's look at this from several perspectives. First, consider the existing system for NFA items. I was perfectly happy to go the individual route but my CLEO refused to sign off even though I easily passed many background checks and held very high military security clearances before I retired. So for me the only way I could lawfully own a suppressor was the trust route--which is what I used. I've talked to others who were in the same boat. Now consider the issue from the NFA examiner's perspective. He or she HAS to review your trust to make sure it complies with your state's law AND all Federal NFA rules. Does that speed up the approval process? I don't think so. What would speed up the process is a system where the examiner had all the information on you (and your co-trustees and beneficiaries) on file so it could be pulled up and updated by a QUICK background check similar to what is done now when you buy a firearm through an FFL dealer. Will it work this way? I don't know. If they put more weapons on the NFA list without more resources, then this proposal will stink. If they require you to submit fingerprint cards EACH TIME you submit a Form 1 or 4 it will stink. But for now...rather than being negative...I'll withhold judgment until I see the entire process. Me: I'm a retired JAG officer.
More burecratic BS; if fingerprints and pictures would help cut transfer times in half, I would say that would be a good thing. But this is just going to bog down transfer times even more.
Bottom line, the current administration isn't going to do anything that makes it EASIER....
This new rule COULD be a good thing...but I'll withhold judgment for now. Let's look at this from several perspectives. First, consider the existing system for NFA items. I was perfectly happen to go the individual route but my CLEO refused to sign off even though I easily passed many background checks and held very high military security clearances before I retired. So for me the only way I could lawfully own a suppressor was the trust route--which is what I used. I've talked to others who were in the same boat. Now consider the issue from the NFA examiner's perspective. He or she HAS to review your trust to make sure it complies with your state's law AND all Federal NFA rules. Does that speed up the approval process? I don't think so. What would speed up the process is a system where the examiner had all the information on you (and your co-trustees and beneficiaries) on file so it could be pulled up and updated by a QUICUK background check similar to what is done now when you buy a firearm through an FFL dealer. Will it work this way? I don't know. If they put more weapons on the NFA list without more resources, then this proposal will stink. If they require you to submit fingerprint cards EACH TIME you submit a Form 1 or 4 it will stink. But for now...rather than being negative...I'll withhold judgment until I see the entire process. Me: I'm a retired JAG officer.
How is a BATFE examiner going to know if your 'trust' is legal?
How about a trust that has trustee's that live out of state
For a Corp, I know of many that have dozens of people who handle firearms. Security companies that use NFA firearms. So having to list every officer of the corp, every employee who is authorized to handle the firearms, and then all the actual security guards.
How the hell is having everyone of those people having to submit pics and prints going to go over?
Can you imagine a corp purchasing an NFA item, and then having to submit 50 or more sets of pics and prints? Can you imagine how much time that would take?
Insane.
A trust/corp negates the need for that because the trust/corp is NOT an individual, and therefor has no background to check, prints to review, or a face to photograph.
How is a BATFE examiner going to know if your 'trust' is legal?
I attended a continuing legal education course for lawyers on "gun trusts." One of the BATFE staff attorneys was a speaker.
Based on his presentation, each examiner is assigned to a group of co-located states, so they get to know their states' requirements real well.
The examiners have a check list. As long as they find the items on their checklist in your trust, it is approved. That is not the same as the examiner finding that the trust is valid or proper.
The staff attorneys create the checklists. 26 states have adopted the Uniform Trust Code so the laws from state to state are largely the same. Even the non-code states are not going to dramatically differ.
If an examiner finds something questionable, they pass it to counsels' office for an opinion.
He mentioned one examiner kept finding the same name used for the residual beneficiary. Apparently, someone made his trust available for copying. A bunch of people changed the creator and trustee but not all the beneficiaries. The applications were approved. But if the trusts are ever fulfilled, there is someone somewhere that is going to receive a truckload of NFA items in the coming years.
Just one more hard lesson of: don't underestimate the creativity of the gun grabbers...
I attended a continuing legal education course for lawyers on "gun trusts." One of the BATFE staff attorneys was a speaker.
Based on his presentation, each examiner is assigned to a group of co-located states, so they get to know their states' requirements real well.
The examiners have a check list. As long as they find the items on their checklist in your trust, it is approved. That is not the same as the examiner finding that the trust is valid or proper.
The staff attorneys create the checklists. 26 states have adopted the Uniform Trust Code so the laws from state to state are largely the same. Even the non-code states are not going to dramatically differ.
If an examiner finds something questionable, they pass it to counsels' office for an opinion.
He mentioned one examiner kept finding the same name used for the residual beneficiary. Apparently, someone made his trust available for copying. A bunch of people changed the creator and trustee but not all the beneficiaries. The applications were approved. But if the trusts are ever fulfilled, there is someone somewhere that is going to receive a truckload of NFA items in the coming years.
So this 'check list' isn't to ensure the legal validity of the trust, just key things that 'should' be in a valid trust?
I have an idea that the trust you mentioned is from a certain individual in Md who posted his basic trust with his name and addressed removed.
As to the other issues I mentioned, did they mention how a REAL corp with a LOT of employees with access to NFA items is going to be handled?
I know of several large security companies in the DC metro area that have a boat load of SBR's for training and state side deployment. And they are not 'law enforcement' for the purpose of the NFA.
This is only proposed, and not approved yet, right?
If it does get approved, will it be effective immediately, or by a set date?
elkslayer44
01-13-13, 13:24
Jack Crab - thanks for the post as it was my understanding -- I am a retired attorney but was still active when I did my gun trust -- that the examiners were in fact assigned to certain states so that they could at least become familiar with those states' laws on trusts. You basically confirmed that. I had also heard of some case where Form 4s were returned due to questions about the legality of the trust under state law. Anyway, as I said in my earlier post that started some of this conversation, I am withholding judgment on the issue until I see what is proposed. What I'd like to see if something like this goes through is for ATF to keep a copy of the trust and fingerprint cards on file (easy to do electronically and perhaps assign a number to it for ease of retrieval) and for the trust transferor to simply refer to that number the next time he or she applies on a Form 1 or 4. The form could be amended to have a block where the trustee certifies no changes have been made to the trust (or if changes, then submit a new trust or simply the amendments and fingerprint cards on anyone newly added as a trustee or beneficiary). The examiner would then update his or her search on the names of the trustees and beneficiaries to verify that they had nothing in their backgrounds since the last time the trust applied for a transfer or to make an NFA item that would disqualify them from possessing such an item. To make the trust submit ALL the documentation each time is to me overly burdensome and counterproductive. If your goal, of course, is to reduce the NFA applications, then this is exactly what you would propose. Guess we'll find out, won't we.
This is only proposed, and not approved yet, right?
If it does get approved, will it be effective immediately, or by a set date?
In answer to your question, this is a description of a potential proposal (i.e., a kind of proposal of the future proposal). It is not the proposal.
This description was listed in the administration's regulatory agenda, which is a document used to explain the regulatory activity the various federal agencies plan to engage in during the foreseeable future.
Assuming the agency proposes the new/revision to the regulations, it will be posted in the Federal Register and the public will be given an opportunity to comment on it. The agency provides an estimated date of July 2013 but it is not clear whether they plan to propose it by then or have it finalized by that date. If the latter, they would have to propose fairly soon (probably before March 2013) although since it is not an "economically significant" regulatory action it can move a bit faster.
In sum, what we have is a description of a potential proposal that the agency plans to take. It is a declaration of intent. But they do not have to do it and they are on no specific timeline. The July 2013 is a very rough estimate. It could be proposed and finalized by then or they could sit on it. The agency has a great deal of discretion. That said, there is no reason the agency could not move forward with this proposal at any time.
So this 'check list' isn't to ensure the legal validity of the trust, just key things that 'should' be in a valid trust?
I have an idea that the trust you mentioned is from a certain individual in Md who posted his basic trust with his name and addressed removed.
As to the other issues I mentioned, did they mention how a REAL corp with a LOT of employees with access to NFA items is going to be handled?
I know of several large security companies in the DC metro area that have a boat load of SBR's for training and state side deployment. And they are not 'law enforcement' for the purpose of the NFA.
Regarding the first question, just because one receives approval and a tax stamp does not mean that BATFE has determined the validity of the trust. The possibility remains that a person who believes he is the trustee is not a trustee because the trust is invalid and is therefore in possession of contraband NFA items.
A second comment from the staff attorney concerned the requirement for the actual underlying trust document versus the certificate or statement of trust. He said applicants were just preparing the trust but never executing it. They would print the certificate but there would be no underlying trust. BATFE asks for the trust document to verify it has been executed. I asked about submitting both the trust and the certificate. He said they would prefer the trust only as the certificate was not reviewed and just extra paper for them.
Our class did not address corporation ownership. It was sponsored by the will, trusts, and estates section and geared more to estate planning for individuals.
My check has been cashed so as long as they grandfather any form 1 for trusts already sent in I will withhold judgement for now.
Lawnchair 04
01-21-13, 11:07
Sent my forms/check out Saturday... Hopefully they get approved before they start new requirements for trusts.
My Trust is revocable. I can change any portion of it any given time. If I have a falling out with my friend, then he gets removed. If I get divorced, then a trustee and first-line beneficiary change. Currently my second-line beneficiary if the NRA - who would I need fingerprints and photos on in that corporation.
domestique
01-23-13, 18:18
I would have no problem with getting fingerprints for all of my trust members when setting up the trust..... but atleast make it easier to acquire the fingerprints (i.e. UPS stores and allow digital copies to be sent and kept for future NFA items.)
The idea of having to drive to the the state police barracks for each item, and each person in my trust would be a huge ordeal.
Starcraftmlg
01-23-13, 18:33
Good job ****ing it up. The purpose of the corps and trust was to avoid the stupid finger prints and photos because we magically change finger prints every time we buy an NFA item.
I would have no problem with getting fingerprints for all of my trust members when setting up the trust..... but atleast make it easier to acquire the fingerprints (i.e. UPS stores and allow digital copies to be sent and kept for future NFA items.)
The idea of having to drive to the the state police barracks for each item, and each person in my trust would be a huge ordeal.
I have a HUGE problem with this.
I have family members who live out of state (they live in an NFA friendly state), and are not gun people, listed as trustees in case something happens to me, to hold the items for my daughter when she comes of age and she can decided if she wants to keep them or part them out to sell.
There is NO WAY I would ask them to go out of their way to get printed and then investigated.
domestique
01-23-13, 19:26
I have a HUGE problem with this.
I have family members who live out of state (they live in an NFA friendly state), and are not gun people, listed as trustees in case something happens to me, to hold the items for my daughter when she comes of age and she can decided if she wants to keep them or part them out to sell.
There is NO WAY I would ask them to go out of their way to get printed and then investigated.
While I agree with you 100%, If a compromise would have to be made (to avoid losing suppressors all together or going the individual sale route, in which case your daughter would have to pay $200.00 per NFA item at the time of inheritance) than I would fall in line.
Especially if they made the waiting time from 6 months to a 3 day background check. I have been finger printed many times for work and the FBI background check has at most taken 2 weeks. There is NO reason we should have to wait 6 months for each item, after your trust/corp has already been reviewed.
While I agree with you 100%, If a compromise would have to be made (to avoid losing suppressors all together or going the individual sale route, in which case your daughter would have to pay $200.00 per NFA item at the time of inheritance) than I would fall in line.
Especially if they made the waiting time from 6 months to a 3 day background check. I have been finger printed many times for work and the FBI background check has at most taken 2 weeks. There is NO reason we should have to wait 6 months for each item, after your trust/corp has already been reviewed.
And the inheritance issue were to change, I'm leaning towards them not being transferable at all if Feinswine gets her wish.
As for the wait, it's not so much the time it takes to do the check, it's the sheer volume of paperwork they have to do, since every NFA regulated item has to go through a small handful of people.
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