Where has the year gone? It seems like just yesterday we were enjoying the warmth of summer. Now, the leaves turn color a little bit more each day as cooler temperatures prevail, all the while ATF inspections continued to rise for the third consecutive quarter.
When reports for July, August, and September were first published, each set a new high in monthly inspections. The result is a total of 2,350 inspections in Q3 2022 – only a 3% growth from Q2 but a 95% monthly increase from January. This was all to be expected, though. After all, we’ve foretold of rising compliance inspections and revocations since our first inspection update in April. Growth had been gradual most of the year, but recent months are proof ATF has stepped up its efforts and enforcement of the Biden administration’s zero tolerance policy.
Next month (October) will mark one full year of monthly inspection reports and next quarter the first calendar year; both will serve as a benchmark for future years. But before we get ahead of ourselves, let’s look back at inspection data from Q3 2022.
As always, keep in mind the data published by ATF fails to provide comprehensive information regarding all corrective actions issued or to address the qualitative impact of compliance inspections on FFLs. Lastly, no historical monthly inspection data exists prior to October 2021.
July–September 2022 Data
The data below represents monthly ATF inspections completed between July and September 2022.
Adding the latest quarterly total to our 2022 report, 5,783 ATF compliance inspections of FFLs have been completed this year. That’s an average of about 640 inspections each month – a number surpassed in five months this year. However, September’s 916 inspections are the most recorded since ATF began publishing monthly reports.
As in the previous two quarters, Kansas City, Dallas and Columbus led all ATF Field Divisions in inspections, surpassing 300 each and accounting for 41% of the quarter’s total. Only two other divisions – Phoenix and Houston – completed more than 100 inspections in the same period, with another 11 completing more than 50. All but three field divisions – New York, Detroit and Charlotte – recorded identical or more inspections in Q3 than in the previous quarter. Of those, the smallest division, Newark, doubled its combined inspections from Q1 and Q2 in just the last three months.
The top five field divisions, already mentioned, account for 53% of all 2022 inspections – up 2% since Q2. Only Newark, New York and St. Paul have failed to surpass 100 inspections on the year.
Like inspections, revocation totals continue to grow each month. July, August and September saw double digit FFLs lose their licenses and account for three of the four such months in 2022. Licensees were hardest hit in July, with 16 of the quarter’s 41 revocations reported during the summer month. Those 41 instances also make up more than half (53%) of all revocations, 77, on the year. Charlotte and Columbus lead all field divisions with 10 revocations each; only two others have reported more than five.
With 77 revocations among 5,780 inspections, FFLs are having licenses revoked at a rate of 1.3% – the highest since 2006 and more than triple that of 2021 (0.4%).
ATF inspections are not a matter of if, but when. You may not be able to predict when industry operations investigators (IOIs) will show up at your door, but you can prepare for their inevitable arrival.
With FFLs facing increased scrutiny and greater correction action for common violations, practicing proactive compliance is critical to protecting your license from revocation. Contact Orchid’s in-house legal and FFL compliance professionals for a Zero Tolerance Rapid Assessment of recent ATF Forms 4473 or A&D bound book records, a remote or in-person mock ATF inspection, or demo of our cloud-based compliance software solutions for manufacturers and retailers.
Don’t let your next ATF inspection be your last.