Pursuant to the Gun Control Act of 1968 (GCA), businesses engaged in the manufacturing, importing and dealing of firearms – known as federal firearms licenses (FFLs) – are subject to inspection, without warrant, of their premises and the examination of records and documents required by law and regulation. Further, the Supreme Court case United States v. Biswell (1972) concluded anyone entering businesses involving close government supervision must do so fully aware that inspections are likely, thus, consenting to such inspections.
But who conducts firearms compliance inspections, what is their purpose, when and where do they take place, and how are they conducted? Below, we’ll answer those questions in Part 1 of our ATF Inspections 101 series.
Who, What, When, Where & How
Who conducts compliance inspections?
In addition to licensing FFLs, the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) is also responsible for regulating firearms businesses, including compliance inspections. In support of the ATF’s regulatory mission, over 800 industry operations investigators (IOIs) conduct inspections of FFLs across the nation in each of the agency’s 25 Field Divisions.
As seen below, ATF Field Divisions either cover multiple states, a single state, or part of a state, and the number of FFLs within each division range from a few hundred to thousands.
Map of ATF Field Divisions; there are 25 in total across the U.S.
What is the purpose of ATF inspections?
ATF inspections are conducted to ensure FFL compliance with applicable federal, state, and local laws and regulations, educate licensees on the specific requirements of those laws and regulations, and prevent illegal firearms trafficking and other criminal activities. Inspections also improve the likelihood firearm traces associated with crimes will be successful.
When do ATF inspections take place?
Historically, most FFLs are inspected every 3–5 years, with the ATF prohibited by law from inspecting a firearms business more than once every 12 months (except in limited circumstances). From 2000–2019, the ATF conducted an average of 10,800 inspections annually, or 8.2% of all active FFLs each year. Conversely, only 5,827 inspections were completed in 2020 due to the pandemic.
However, annual inspections are expected to rise and become more frequent following calls from the Biden administration to raise ATF funding for the purpose of hiring “additional personnel necessary to increase the number of inspections and enforcement actions taken against dealers in violation of federal law.”
While the ATF does not typically give advance notice prior to conducting a compliance inspection, such inspections may only occur during licensee business hours.
Graph of ATF compliance inspections between 2010–2020.
Where do ATF inspections take place?
Compliance inspections may only occur on a licensee’s business premises, including off-site storage locations. ATF IOIs will need access to physical firearm inventory and all ATF Forms and documents.
Ideally, IOIs should be given a table or desk in a private room away from business operations and out of view of employees and customers.
How are ATF inspections conducted?
During an ATF inspection, IOIs will examine FFL records, firearm inventory and the licensee’s conduct of business. Over the course of one or multiple days, investigators will perform the following activities:
- Review business operations, including ownership and responsible person information
- Evaluate licensee’s internal controls and security measures
- Verify licensee is in compliance with state and local laws
- Conduct complete physical inventory of firearms
- Review acquisition and disposition (A&D) record, or Bound Book
- Review all ATF forms, including Forms 4473 (paper and digital)
If violations are found during an FFL inspection, the nature and extent of the violations will determine next steps. We’ll cover the post-inspection process, types of inspection violations, and ATF corrective actions in Part 2 of our series.
Orchid FFL Protection
For over a decade, Orchid FFL compliance, operations and technology experts have helped firearm manufacturers, distributors and retailers take a proactive approach to ATF compliance.
Whether your firearms business is preparing for an inspection, currently under inspection, or responding to ATF corrective action – including license revocation – contact our in-house firearms law and compliance professionals to review your compliance plan, perform an onsite or remote mock ATF inspection, and protect your FFL.
More ATF Inspections 101
Part 2: Post-Inspection Process, Violations & Corrective Action
Part 3 (Coming Soon)
Part 4 (Coming Soon)