Firearms are manufactured under the authority of an ATF-issued Type 07 or Type 10 license. That license defines the permissible activities that are regulated by ATF and subsequently “reviewed” for compliance during an official FFL compliance inspection. According to the ATF’s website, they cite the process for inspecting a licensee to be as follows: “The IOI will introduce themselves to the licensee, show their ATF credentials, and explain why they’re there. They will also provide their contact information for any follow-up questions. During an inspection, the IOI will conduct the following activities (not necessarily in this order):
- Review business operations, including ownership and responsible person information
- Evaluate the licensee’s internal controls and security measures
- Verify that licensee is in compliance with state and local laws
- Conduct a complete physical inventory of firearms
- Review the acquisition & disposition (A&D) record, also known as the bound book
- Review all ATF forms, including Forms 4473
- Suggest voluntary actions or steps the licensee can take to improve compliance”
- ATF has and likely will inspect the time to serialize frames and receivers found in “work-in-process” to ensure that they are properly serialized within 7 days. Stockpiling of unserialized firearms can be a significant violation.
- ATF may evaluate the proper depth of serial number markings and ensure that other required marks such as city, state, model (etc) are properly identified and recorded in the records.
- Receiving dock – when did the serialized firearm arrive and has it been recorded in the Bound Book?
- Shipping dock – Have firearms sitting on the shipping dock already been “disposed” even though possession has not transferred? Or, have recent shipments left the dock but failed to be disposed in the bound book?
- Work-in-Process and Inventory Cages – Are all of the firearms in these locations properly recorded in the bound book? Are all of the firearms showing as “open dispositions” in the bound book on-site or easily traceable to the possession of an employee for bona fide business purposes?
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