Simply put, an FFL Revocation is the result of legal and regulatory proceedings that “take back” your FFL, potentially rendering you out of business forever. Sound scary? Well, it sure can be if you’re one of the licensees subject to the process.
All that said, you may still be wondering, what could I possibly do as a license holder that may lead to revocation?
The ATF doesn’t publish an exact “list” per se, but our experience having served thousands of federal firearms licensees and with much interaction with ATF personnel across the country, we’re qualified to list some of the top areas. Please note, these are not listed in any particular order.
#1 – Willful Violations of the Law or Regulation
Perhaps this goes without saying, but willfully violating the law is not a good thing. But what area of the law or which firearm regulation? Would willfully making an error in the recording of a firearm type in your bound book lead to a revocation? Maybe or maybe not depending upon other circumstances of your inspection. What about willfully transferring a firearm to a non-licensee who failed to qualify to the prohibited persons questions on the ATF Form 4473? Well, now you’re headed in the right direction which is also a good segue to our second point – FFL activity that impacts public safety.
#2 – FFL Activity That Poses Material Impact to Public Safety
Let’s start where we left off on #1 – firearm transfers to non-licensed parties. The prohibited persons qualifications listed on ATF Form 4473 were designed with the intent of protecting the public interest. Which, by the way, does include “us” as business owners and operators of the firearms industry. Willfully transferring a firearm to someone who is not permitted may impact public safety.
In a different context, consider the manufacture of machine gun receivers in bulk. Add to that, a less than well-secured facility and significant delays in both the registration, recording and serialization of those NFA devices. Found during an inspection, such behavior would definitely catch a more cautious and bothered eye of the ATF. Why? The risk of potential for loss, theft or transference of such an item could have a material impact on public safety.
#3 – Repeat Violations in a Particular Regulation
FFL inspection violations happen – there’s no doubt and that’s not necessarily the end of the world. Or at least not right now. By that we mean, there has been some discussion during the recent election that a Democratic candidate could try to impose new legislation such that a single violation would lead to revocation. Is that likely? We can’t say for sure but the concept is somewhat irrational (however, note that several courts have upheld the principle that ATF can in fact revoke an FFL for a single violation!).
Consider for a moment that violation may be levied for anything found during an FFL inspection which fails to meet the regulation or ruling. Many of the ATF’s federal firearm regulations are administrative in nature (nonetheless for good purpose). This includes, for example, the recording of a firearm acquisition upon receipt. What if the ATF finds that the model of the firearm was incorrectly recorded during receipt? Well, accidents do happen and we should strive to eliminate them. That being said, such is an example of an administrative violation that may not impact public safety.
But what if it happened 100,000 times? And then the ATF inspected your FFL again the following year and it happened another 100,000 times? And then the year after, and so forth? At some point the evidence of repeat violation leads to an escalation process from Violation, to a Warning Letter, to a Warning Conference and subsequently to a Revocation Hearing.
Our goal as licensed firearm business owners is to generate income while doing so within the confines of the laws, regulations and rulings. And, while it is possible to have your licensed revoked for a single violation, that violation would indeed need to be severe. Whether or not revocation is part of the discussion, the cost of responding to ATF FFL inspections, ATF FFL “Report of Violations” and repeat inspections is not something that a licensee wants to bear. The takeaway, build and manage good compliance programs and consider software which makes complying easier and more efficient.