Top 10 Inspection Violations by Type 01 & 02 FFLs

Written by Orchid

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June 08, 2022

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White text atop red background next to yellow 'Violation' stamp graphic over photo of gun pawn store

As covered in Part I of our ‘ATF Inspections 101’ series, businesses engaged in the manufacturing, importing and dealing of firearms are subject to inspection by the ATF, per the Gun Control Act of 1968. During these inspections, ATF industry operations investigators (IOIs) examine federal firearm license (FFL) records, firearm inventory, and the licensee’s conduct of business to ensure compliance with federal, state, and local laws and regulations. Any violations of these laws and regulations found during an inspection can result in varying degrees of ATF corrective action.

Between 2016–2020, ATF IOIs conducted 48,445 FFL compliance inspections. Of those, 77% were inspections of Type 01 (dealer in firearms) and 02 (pawnbroker in firearms) FFLs. In total, over 2.4 million violations were cited during inspections of all FFLs, 39.5% of which were by firearm dealers and pawnbrokers.

Thanks to the ATF’s new National Firearms in Commerce and Trafficking Assessment (NFCTA) report, we now know the most common inspection violations by Type 01 and 02 FFLs cited during this five-year period.

Type 01 FFL Inspection Violations

From 2016–2020, ATF IOIs cited firearm dealers with 726,000 inspection violations. The top 10 violations, as listed below, accounted for 94% of all Type 01 FFL violations. The single most common violation accounted for more than half (52.4%) of all violations with 380,169 recorded instances.

Of the top 10 violations, eight are directly related to the completion or storage of ATF Forms 4473, or the Firearms Transaction Record.

Top 10 Violations Cited

  1. Failure to timely record required information in A&D record [27 CFR 478.125(e)]
  2. Failure to complete 4473 as indicated by the headings and instructions on or pertaining to the form [27 CFR 478.21(a)]
  3. Failure to obtain complete purchaser information on 4473 [27 CFR 4 78.124(c)(1)]
  4. Failure to record all required NICS information on 4473, including date NICS was contacted and response was received [27 CFR 478.124(c)(3)(iv)]
  5. Failure of licensee to sign and/or date (certify) 4473 [27 CFR 478.124(c)(5)]
  6. Failure to verify or record purchaser’s ID documents on 4473 [27 CFR 478.124(c)(3)(i)]
  7. Failure to report multiple handgun sales on ATF Form 3310.4 [27 CFR 478.126(a)]
  8. Failure to properly identify firearms transferred on 4473 [27 CFR 478.124(c)(4)]
  9. Failure to maintain Forms 4473 in required order [27 CFR 478.124(b)]
  10. Failure to complete NICS/POC background check prior to transferring firearm [27 CFR 478.102(a)]

Type 02 FFL Inspection Violations

Other than the ability to pawn firearms, Type 02 FFLs are effectively the same as firearm dealers, so it’s no surprise the two FFL types share the same 10 most commonly cited inspection violations – though, in a different order – and the same top violation.

From 2016–2020, ATF IOIs cited pawnbrokers with over 231,000 inspection violations. The top 10 violations, listed below, accounted for 96% of all Type 02 violations. Combined, the top two violations accounted for 53.8% of all violations.

Top 10 Violations Cited

  1. Failure to timely record required information in A&D record [27 CFR 478.125(e)]
  2. Failure to obtain complete purchaser information on 4473 [27 CFR 478.124(c)(1)]
  3. Failure to complete 4473 as indicated by the headings and instructions on or pertaining to the form [27 CFR 478.21(a)]
  4. Failure to record all required NICS information on 4473, including date NICS was contacted and response was received [27 CFR 478.124(c)(3)(iv)]
  5. Failure of licensee to sign and/or date (certify) 4473 [27 CFR 478.124(c)(5)]
  6. Failure to verify or record purchaser’s ID documents on 4473 [27 CFR 478.124(c)(3)(i)]
  7. Failure to properly identify the firearms transferred on 4473 [27 CFR 478.124(c)(4)]
  8. Failure to maintain Forms 4473 in required order [27 CFR 478.124(b)]
  9. Failure to report multiple handgun sales on ATF Form 3310.4 [27 CFR 478.126(a)]
  10. Failure to complete NICS/POC background check prior to transferring firearm [27 CFR 478.102(a)]

All FFL Inspection Violations

Making up more than three-quarters of all FFL inspections and nearly 40% of all inspection violations cited between 2016–2020, the top 10 list of inspection violations by all FFLs shares five of the same violations found in the lists of firearm dealers and pawnbrokers (numbers one, four, five, eight and ten). The other five violations are more related to firearm manufacturers.

Top 10 Violations Cited

  1. Failure to timely, accurately, and completely record information in A&D record [27 CFR 478.125(e)]
  2. Failure to timely record firearms manufactured/acquired in A&D record [27 CFR 478.123(a)]
  3. Failure to maintain timely, accurate and complete disposition record [27 CFR 478.123(b)]
  4. Failure to complete 4473 as indicated by the headings and instructions on or pertaining to the form [27 CFR 478.21(a)]
  5. Failure to obtain complete purchaser information on 4473 [27 CFR 478.124(c)(1)]
  6. Failure to file ATF Form 2 for registration of manufactured NFA firearms [27 CFR 479.103]
  7. Failure to obtain the required license to engage in the business as a dealer, manufacturer, or importer of firearms [27 CFR 478.41(b)]
  8. Failure to record all required NICS information on 4473, including date NICS was contacted and response was received [27 CFR 478.124(c)(3)(iv)]
  9. Failure to properly mark firearms with manufacturer city, state in which the firearm was manufactured. [27 CFR 478.92(a)(l)(ii)(D)]
  10. Failure of licensee to sign and/or date (certify) 4473 [27 CFR 478.124(c)(5)]

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.

View Top 10 Inspection Violations by Type 07 FFLs

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