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Zero Tolerance Protection: Revocation Liability & Limitations

Written by Orchid


October 11, 2022


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As we’ve covered throughout our Zero Tolerance Protection series, revocations are typically issued for willful violations. However, a combination of violations, large number of violations, or history of violations could also lead to an FFL losing its license. And when a revocation notice is sent, it’s rarely overturned.

No FFL owner or operator wants to lose their license or business, but the harshest ATF corrective action isn’t the worst thing that can stem from revocation. Depending on violations cited as the basis for revoking your license, you could also face civil fines or criminal charges for your or your employee’s actions. And even if you don’t get slapped with charges atop violations, your involvement in future federal firearms business, should you choose to continue in the industry, could be severely limited.

Below, we’ll review personal liabilities and limitations associated with revocation.

Personal Liabilities

Though willful does not mean intentional, some revokable violations certainly can be – or at least argued as such. If caught transferring a firearm to a prohibited person, failing to run a required background check, or falsifying records, you could face fines and charges in addition to having your license revoked.

Precedent has already been established where licensees have been accused of and charged with participating in firearms trafficking, permitting straw purchases, not running background checks, disregarding NICS check responses, falsifying transaction records to cover up illegal activity, and even opening new FFLs to skirt ongoing investigations. If found that you’ve committed these or similar crimes, or knowingly enabled them to occur, revocation would be the least of your worries.

Such charges could also affect your ability to own firearms, let alone operate an FFL.

FFL & Personal Limitations

Whether you choose not to request an ATF revocation hearing, or your revocation is upheld in court, both you and your business could face limitations.

Following a final decision of revocation, ATF will provide a drawdown period in which your FFL must dispose of remaining serialized inventory, whether to non-licensed individuals or other licensees. During this period, you are not allowed to buy or take in new guns to your inventory – only to sell.

Further, having an FFL revoked could prevent you from owning, operating, or working at a firearms business in the future. Should you attempt to apply for new a federal firearms license, Part B of ATF Form 7 (Form 5310.12), the Responsible Person Questionnaire, asks if you’ve ever had a license revoked and for full details to be submitted with your application. Though not explicitly stated as a prohibiting factor, ATF will likely give previous actions serious consideration. 

In accordance with the Bipartisan Safer Communities Act, licenses will also soon be able to run NICS background checks on employees, referred to as firearm handler checks, in which criminal records will be reviewed. It’s also entirely possible such checks could deny/fail previously revoked licensees.

If nothing else, remember operating a licensed firearms business comes with great responsibility. Actions have consequences, and willfully committing violations could lead to revocation, civil fines, criminal charges, and a career path outside of firearms.

Orchid Zero Tolerance Protection

At Orchid, our team of operations, technology and legal professionals understand the risks of today’s firearm businesses. For over a decade, we’ve worked with FFLs big and small to implement leading compliance best practices and software solutions to eliminate violations and protect licenses from revocation.

Continuing our Zero Tolerance Protection series, we’ll share our expertise and experience in proactive compliance as we look closer at Biden’s policy and its impact on the firearms industry, review how to avoid and correct violations, and suggest ways to protect your FFL from the risk of revocation. Next, we’ll review how compliance software and your data can help prevent the threat of revocation.

In the meantime, learn more about a Zero Tolerance Rapid Assessment of prior ATF Reports of Violations, your A&D Bound Book, and recent ATF Forms 4473. We also encourage you to watch our webinar on ATF zero tolerance enforcement, schedule an in-person or remote mock ATF inspection, and implement leading compliance software in your retail FFL. Contact Orchid today to protect your FFL from a zero tolerance revocation.

Biden Zero Tolerance Webinar