Pursuant to the administration’s orders, the ATF began publishing monthly firearms compliance inspection reports in November – beginning with statistics from October 2021. The reports detail total completed FFL inspections, inspections resulting in warning conference, and inspections resulting in revocation by each of the agency’s field divisions in the month indicated.
Previously only published annually, this new level of reporting provides greater insight into where the ATF is conducting firearms compliance inspections and how action is being taken against FFLs found in violation of ATF regulations. As of this writing, only reports from October and November 2021 are available, but the small sample size presents an opportunity to evaluate ATF inspections now and in the future.
Beyond The Data
Before diving into the new monthly reports, we must first establish context for the data using annual firearms compliance inspection statistics. Per the ATF “2021 Firearms Commerce in the U.S.” report, 5,827 FFL inspections were conducted in 2020 – down 55% from the 13,079 inspections completed in 2019 due to the pandemic shutdown.
However, removing 2020 from the equation, an average of 10,500 firearms compliance inspections (or 7.8% of active FFLs) were conducted annually between 2015 and 2019. Over the course of 12 months, that equates to 875 FFL inspections each month.
ATF Field Divisions
Next, we must understand the structure of the ATF, which operates 25 field divisions across all 50 states, Puerto Rico, Guam and the Virgin Islands. ATF industry operations investigators (IOIs) are then responsible for inspecting some 81,500 FFLs (not including Type 03) nationwide.
To best blanket the nation and distribute the massive workload, ATF field divisions either cover part of a state (e.g., Houston field division), an entire state (e.g., Atlanta field division) or multiple states (e.g., Denver field division). As such, some field divisions are responsible for more FFLs than others.
Monthly Inspections Down
In October and November 2021, the ATF averaged just 445 monthly inspections – less than the 485 monthly average of 2020 and half that of the 875 needed to reach the average 10,500 annual inspections. However, considering the lingering impact of the pandemic and the Thanksgiving holiday, this isn’t all that surprising.
Despite monthly inspections still half that of pre-pandemic years, October and November totals may point to firearms compliance inspections increasing across the country. Of ATF field divisions, 11 recorded inspection totals in two months that were 20% or more than their entire 2020 total. The Boston field division, which covers Massachusetts, Connecticut, Rhode Island, Vermont, New Hampshire and Maine, conducted 67 FFL inspections in October and November, compared to 154 in all of 2020 (44%).
The other 10 such field divisions included Baltimore, Charlotte, Chicago, Miami, Nashville, New York, Phoenix, San Francisco, St. Paul and Washington (D.C.).
Comparing regions of the U.S., the ATF appeared to be the busiest in their southwest field divisions the last two months – specifically in Kansas City and Dallas. Both field divisions recorded 104 total firearms compliance inspections between October and November – 25 more than any other field division. The region’s Phoenix field division also ranked fourth in total FFL inspections during this time with 57.
With that said, it should be noted while ATF inspections in the Kansas City field division increased month-to-month (Oct: 41; Nov: 62), those in their Dallas field division declined (Oct: 68, Nov: 36). It’s also worth noting this region is also home to two of the top 10 states in active licensees in Texas and Missouri.
In 2020, 40 FFLs were revoked following ATF firearms compliance inspections. In October and November this year, 10 total inspections resulted in license revocation. While the new data could point to the agency cracking down on so-called “rogue gun dealers” and implementing the administration’s zero-tolerance policy for “willful” violations of the law, we also don’t have prior monthly statistics to use as a comparison.
Historically, the ATF has been diplomatic in its use of corrective actions, but FFLs could see more and stricter corrective action for inspection violations in the future.
Below are the monthly ATF firearms compliance inspections completed in October and November 2021.
Beyond The Data
While more information and data transparency are always welcomed, it’s worth noting the new monthly reports do not tell the full story of ATF firearms compliance inspections.
Inspections may be below “normal” levels now, but those numbers are expected to increase in the coming months and should not be used to justify relaxed compliance efforts. Though it generally takes the ATF a few years to come around for an inspection, an IOI can walk into your FFL at any time so it’s important to stay prepared. And should your firearms business be inspected, it doesn’t mean you won’t see the ATF for another three years, as we have even seen instances in which an FFL is visited year after year following a subpar inspection.
Contrary to data in the monthly reports, which only call out inspections which resulted in a warning conference or revocation, there are additional levels of corrective action for compliance violations and the ATF has the discretion in how to apply such action. Historically, we have seen revocations and/or warning conferences initiated for a handful of Form 4473 violations, while FFLs with a much greater history of inspection citations continually receive only a Report of Violations. Further, there is a significant difference between an inspection in which, say, a firearm was transferred once without a background check versus an inspection where the purchaser ethnicity (box 18a) was not checked in 200 instances. In certain instances, the ATF also has authority to issue fines, and even if an FFL survives a revocation proceeding, there may be some actions required to save the license that costs the FFL both time and money.
There’s also the unforeseen impact of firearms compliance inspections, which can impact different FFLs in different ways. Retail customers may be scared away by ATF presence on site, impacting sales, while firearm manufacturers may have to shut down production for an inspection to occur, impacting output. Simply put, these new monthly reports may not paint an accurate or full picture of risk for your FFL.
Given that inspections are low probability-high impact events, the best way to protect your FFL is to implement operational practices and technology suitable for your specific environment to best lower compliance risk. Contact Orchid legal experts today to schedule your mock ATF inspection and learn how we can protect your FFL from ATF violations.