Proposed Rule2026-09162
Firearm Activities in Foreign Trade Zones, Customs-Bonded Warehouses
Primary source
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Published
May 8, 2026
Issuing agencies
Justice DepartmentAlcohol, Tobacco, Firearms, and Explosives Bureau
Abstract
The Bureau of Alcohol, Tobacco, Firearms, and Explosives ("ATF") proposes amending the definition of "importation" in the implementing regulations for the Gun Control Act ("GCA") and the National Firearms Act ("NFA"). Specifically, the rule proposes to create an exclusion from the GCA and NFA's import requirements for items brought into a customs-bonded warehouse ("CBW") (in addition to the existing exclusion for a foreign-trade zone ("FTZ")). The proposed modification to the definition would also remove the condition that items may be brought into FTZs and CBWs only "for storage." The proposed rule does not exempt merchandise from any applicable customs requirements.
Full Text
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<title>Federal Register, Volume 91 Issue 89 (Friday, May 8, 2026)</title>
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[Federal Register Volume 91, Number 89 (Friday, May 8, 2026)]
[Proposed Rules]
[Pages 25237-25243]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-09162]
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DEPARTMENT OF JUSTICE
Bureau of Alcohol, Tobacco, Firearms, and Explosives
27 CFR Parts 478 and 479
[Docket No. ATF-2026-0069; ATF No. 2025R-06P]
RIN 1140-AA93
Firearm Activities in Foreign Trade Zones, Customs-Bonded
Warehouses
AGENCY: Bureau of Alcohol, Tobacco, Firearms, and Explosives,
Department of Justice.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Bureau of Alcohol, Tobacco, Firearms, and Explosives
(``ATF'') proposes amending the definition of ``importation'' in the
implementing regulations for the Gun Control Act (``GCA'') and the
National Firearms Act (``NFA''). Specifically, the rule proposes to
create an exclusion from the GCA and NFA's import requirements for
items brought into a customs-bonded warehouse (``CBW'') (in addition to
the existing exclusion for a foreign-trade zone (``FTZ'')). The
proposed modification to the definition would also remove the condition
that items may be brought into FTZs and CBWs only ``for storage.'' The
proposed rule does not exempt merchandise from any applicable customs
requirements.
DATES: Comments must be submitted in writing, and must be submitted on
or before (or, if mailed, must be postmarked on or before) August 6,
2026. Commenters should be aware that the federal e-rulemaking portal
comment system will not accept comments after midnight Eastern Time on
the last day of the comment period.
ADDRESSES: You may submit comments, identified by RIN 1140-AA93, by
either of the following methods--
<bullet> Federal e-rulemaking portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Follow the instructions for submitting comments.
<bullet> Mail: ATF Rulemaking Comments; Mail Stop 6N-518, Office of
Regulatory Affairs; Enforcement Programs and Services; Bureau of
Alcohol, Tobacco, Firearms, and Explosives; 99 New York Ave. NE;
Washington, DC 20226; ATTN: RIN 1140-AA93.
Instructions: All submissions must include the agency name and
number (RIN 1140-AA93) for this notice of proposed rulemaking (``NPRM''
or ``proposed rule''). ATF may post all properly completed comments it
receives from either of the methods described above, without change, to
the federal e-rulemaking portal, <a href="https://www.regulations.gov">https://www.regulations.gov</a>. This
includes any personally identifying information (``PII'') or business
proprietary information (``PROPIN'') submitted in the body of the
comment or as part of a related attachment they want posted. Commenters
who submit through the federal e-rulemaking portal and do not want any
of their PII posted on the internet should omit it from the body of
their comment and any uploaded attachments that they want posted. If
online commenters wish to submit PII with their comment, they should
place it in a separate attachment and mark it at the top with the
marking ``CUI//PRVCY.'' Commenters who submit through mail should
likewise omit their PII or PROPIN from the body of the comment and
provide any such information on the cover sheet only, marking it at the
top as ``CUI//PRVCY'' for PII, or as ``CUI//PROPIN'' for PROPIN. For
detailed instructions on submitting comments and additional information
on the rulemaking process, see the ``Public Participation'' heading of
the SUPPLEMENTARY INFORMATION section of this document. In accordance
with 5 U.S.C. 553(b)(4), a summary of this rule may be found at <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Commenters must submit comments by using one of
the methods described above, not by emailing the address set forth in
the following paragraph.
FOR FURTHER INFORMATION CONTACT: Office of Regulatory Affairs, by email
at <a href="/cdn-cgi/l/email-protection#e5aab7a4a5849183cb828a93"><span class="__cf_email__" data-cfemail="3a75687b7a5b4e5c145d554c">[email protected]</span></a>, by mail at Office of Regulatory Affairs; Enforcement
Programs and Services; Bureau of Alcohol, Tobacco, Firearms, and
Explosives; 99 New York Ave. NE; Washington, DC 20226, or by telephone
at 202-648-7070 (this is not a toll-free number).
SUPPLEMENTARY INFORMATION:
I. Background
The Attorney General is responsible for enforcing the Gun Control
Act (``GCA''), as amended, and the National Firearms Act (``NFA''), as
amended.\1\ This includes the authority to promulgate regulations
necessary to enforce the provisions of the GCA and NFA. See 18 U.S.C.
926(a); 26 U.S.C. 7801(a)(2)(A)(ii), 7805(a). Congress and the Attorney
General have delegated the responsibility for administering and
enforcing the GCA and NFA to the Director of ATF (``Director''),
subject to the direction of the Attorney General and the Deputy
Attorney General. See 28 U.S.C. 599A(b)(1), (c)(1); 28 CFR 0.130(a)(1)-
(2); Treas. Order No. 221(2)(a), (d), 37 FR 11696-97 (June 10,
1972).\2\ Accordingly, the Department and ATF have promulgated
regulations implementing both the GCA and the NFA in 27 CFR parts 478
and 479. In addition to enforcing and administering the GCA and the
NFA, ATF is responsible for enforcing and administering the permanent
import provisions of the Arms Export Control Act (``AECA''), 22 U.S.C.
2778. Each of these laws restricts the import of certain firearms,
ammunition, barrels, or defense articles. The President has delegated
to the Attorney General the authority to designate and control
permanent import of defense articles and services appearing on the U.S.
Munitions Import List (``USMIL''). See E.O. 13637, Administration of
Reformed Export Controls, 78 FR 16129 (Mar. 8, 2013); 27 CFR 447.1.
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\1\ Some NFA and GCA provisions still refer to the ``Secretary
of the Treasury.'' However, the Homeland Security Act of 2002,
Public Law 107-296, 116 Stat. 2135, transferred the functions of ATF
from the Department of the Treasury to the Department of Justice,
under the general authority of the Attorney General. 26 U.S.C.
7801(a)(2); 28 U.S.C. 599A(c)(1). Thus, for ease of reference, this
proposed rule refers to the Attorney General where relevant.
\2\ In Attorney General Order Number 6353-2025, the Attorney
General delegated authority to the Director to issue regulations
pertaining to matters within ATF's jurisdiction, including under the
NFA, GCA, and Title XI of the Organized Crime Control Act. ATF's
jurisdiction also includes those portions of sec. 38 of the Arms
Export Control Act pertaining to permanently importing defense
articles and services and the Contraband Cigarette Trafficking Act.
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The GCA, at 18 U.S.C. 922(l), makes it unlawful for any person to
knowingly import or bring into the United States any firearm or
ammunition except as permitted under section 925(d), which specifies
the conditions under which the Attorney General must authorize
importing those items into the United States. The NFA, at 26 U.S.C.
5844, also restricts importing certain types of firearms defined as NFA
firearms, with
[[Page 25238]]
similar limited exceptions. See also 27 CFR 479.111. Finally, the AECA,
at 22 U.S.C. 2778, authorizes controls on importing defense articles
appearing on the USMIL.
The term ``importation'' is not defined in either the GCA or NFA
but is defined in the regulations that implement those statutes. The
GCA regulations define ``importation'' as ``[t]he bringing of a firearm
or ammunition into the United States,'' 27 CFR 478.11, while the NFA
regulations define ``importation'' as ``[t]he bringing of a firearm
within the limits of the United States or any territory under its
control or jurisdiction, from a place outside thereof (whether such
place be a foreign country or territory subject to the jurisdiction of
the United States), with intent to unlade.'' 27 CFR 479.11. AECA
regulations define ``importation'' as ``bringing into the United States
from a foreign country any of the articles on the [USMIL],'' which
includes many firearms and ammunition regulated under the GCA and NFA,
as well as firearm parts. 27 CFR 447.11.
Both the GCA and the NFA regulations explicitly exclude from their
definition of ``importation'' the bringing of a firearm into a foreign-
trade zone (``FTZ''). FTZs are secure areas located in or near ports of
entry and are established by the Foreign Trade Zone Board under the
Foreign Trade Zone Act of 1934 (``FTZ Act''), as amended. 19 U.S.C.
81a-81u. FTZs are outside of the customs territory of the United States
for purposes of paying duties but are not outside of the United States'
legal jurisdiction generally. See 15 CFR 400.1(c). With respect to
FTZs, the GCA's implementing regulations state that bringing a firearm
``from outside the United States into a foreign-trade zone for storage
pending shipment to a foreign country or subsequent importation into
this country, pursuant to this part, shall not be deemed importation.''
See 27 CFR 478.11 (emphases added). The NFA's implementing regulations
similarly exclude FTZs from the definition of ``importation,''
providing that bringing an NFA firearm into an FTZ for storage pending
shipment to a foreign country or subsequent importation into this
country under Title 26 of the United States Code is not
``importation.'' See 27 CFR 479.11. As a result of these definitional
exceptions, firearms and other regulated items (like barrels and
ammunition) may be brought from outside the United States into FTZs for
storage without regard to the GCA's and NFA's import restrictions.
However, the AECA regulations do not exempt from ``importation''
firearms that are admitted into FTZs for storage pending shipment to a
foreign country or subsequent importation. See 27 CFR 447.11. Under the
AECA regulations, firearms and firearm parts listed as defense articles
on the USMIL are considered imported unless they are transactions
subject to Department of State controls. Therefore, to comply with the
AECA, a federal firearms licensee (``FFL'') must complete ATF Form
5330.3A, Application/Permit to Import Firearms, Ammunition, and Defense
Articles (``Form 6, part I''), and obtain approval from ATF prior to
bringing any firearms into FTZs. See 27 CFR 447.41. To withdraw
firearms from an FTZ and permanently import them into the United
States, an FFL must complete ATF Form 5330.3C, Releasing/Receiving
Imported Firearms, Ammunition and Defense Articles (``Form 6A'') and
receive approval from ATF. See 27 CFR 478.113.
Federal law also allows items to be brought into Customs Bonded
Warehouses (``CBWs''), which are distinct from FTZs and are ``buildings
or parts of buildings and other enclosures . . . for the storage of
imported merchandise entered for warehousing, or taken possession of by
the appropriate customs officers or under seizure, or for the
manufacture of merchandise in bond, or for the repacking, sorting, or
cleaning of imported merchandise.'' 19 U.S.C. 1555(a). CBWs are
supervised and regulated by U.S. Customs and Border Protection
(``CBP''). Id. However, because the current GCA and NFA regulations do
not exempt items brought into CBWs from the definition of
``importation'' despite the functional similarities between FTZs and
CBWs, firearms brought into a CBW are currently considered ``imported''
and must therefore qualify for an exception to the general import
prohibitions of the GCA, 18 U.S.C. 925(d), and the NFA, 26 U.S.C. 5844.
II. Proposed Rule
A. Adding Customs-Bonded Warehouses to the Import Exceptions
ATF is proposing that items brought into CBWs be excepted from the
GCA and NFA regulatory definitions of ``importation'' in the same way
that items brought into FTZs are currently excepted.
Some firearms industry members have historically conducted firearms
activities such as storage, manipulation, or destruction in CBWs rather
than in FTZs. But, in October 2024, ATF issued an Open Letter to FFLs
on ``Allowable Activities for Firearms Brought into Customs Bonded
Warehouses and Foreign Trade Zones'' (``FTZ/CBW Open Letter''),\3\
which clarified that 27 CFR 478.11 and 479.11 permit an importer to
bring firearms and ammunition into only FTZs, but not CBWs, for storage
pending importation into the United States. As a result, firearms
brought into CBWs are currently subject to the import restrictions of
the GCA and NFA. The FTZ/CBW Open Letter resulted in firearms industry
members needing to transition these activities to FTZs. Some industry
members were required to establish new FTZs with the FTZ Board.
Although there are differences between CBWs and FTZ for purposes of
customs law and regulations,\4\ ATF finds that for purposes of GCA and
NFA import restrictions that there is no statutory basis to treat CBWs
differently from FTZs, and that forcing importers to transition from
one to the other may needlessly impose additional costs on industry
members. ATF believes it is in the public interest to alleviate this
burden by allowing importers to choose whether to conduct these
authorized activities in either an FTZ or a CBW based on, for example,
the availability of such facilities near their place of business, or
differences in applicable customs regulations that may impact business
operations.
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\3\ ATF, Open Letter to All Federal Firearms Licensees:
Allowable Activities for Firearms Brought into Customs Bonded
Warehouses and Foreign Trade Zones (Oct. 31, 2024), <a href="https://www.atf.gov/firearms/docs/open-letter/all-ffls-october-2024-open-letter-allowable-activities-firearms-brought/download">https://www.atf.gov/firearms/docs/open-letter/all-ffls-october-2024-open-letter-allowable-activities-firearms-brought/download</a> [<a href="https://perma.cc/GF73-SEJU">https://perma.cc/GF73-SEJU</a>].
\4\ CBWs and FTZs are both CBP supervised areas that allow for
the deferral of duties and taxes along with delay in decisions as to
admissibility on imported merchandise. However, they differ
significantly in their underlying statutory authorities, regulatory
framework, operational flexibility, storage duration, and the types
of goods and activities permitted, which can lead to inefficiencies
and confusion if CBWs and FTZs are mistakenly treated as equivalent.
Merchandise brought into a CBW is held in joint custody between the
proprietor and CBP. The importer is responsible for duties on the
warehoused goods, guaranteed by the terms and conditions of its
basic importation bond. The CBW proprietor is responsible for
safekeeping of the goods, guaranteed by the terms and conditions of
its basic custodial bond. Merchandise admitted into an FTZ remains
the sole responsibility of the zone operator, whose Foreign Trade
Zone Operator bond guarantees safekeeping of the goods and payment
of duties on any merchandise that cannot be accounted for.
Prohibited merchandise may not be admitted into an FTZ but is not
barred from entry and storage into a CBW. See Customs Border
Protection, Foreign-Trade Zones Frequently Asked Questions, <a href="https://www.help.cbp.gov/s/article/Article-1905?language=en_US">https://www.help.cbp.gov/s/article/Article-1905?language=en_US</a> [<a href="https://perma.cc/H6BQ-7B4Z">https://perma.cc/H6BQ-7B4Z</a>]; What is a Customs-Bonded Warehouse, <a href="https://www.help.cbp.gov/s/article/Article1853?language=en_US">https://www.help.cbp.gov/s/article/Article1853?language=en_US</a> [<a href="https://perma.cc/JE8P-YKMK">https://perma.cc/JE8P-YKMK</a>].
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Accordingly, ATF specifically proposes to update its regulations
under 27 CFR 478.11 and 479.11 to exclude
[[Page 25239]]
both FTZs and CBWs from the definition of ``importation.'' \5\ This
amendment would provide greater flexibility under ATF regulations to
parties who conduct authorized activities in FTZs and CBWs. ATF
believes that extending the FTZ exemption from GCA and NFA importation
restrictions to items stored in CBWs does not create a public safety
risk. A CBW is managed by both CBP and the warehouse proprietor, and
CBP has a right of entry into CBWs. Importers and manufacturers should
note, however, that federal customs law and regulations limit the types
of activity that can be conducted in a CBW and FTZ, independent of the
restrictions of the GCA, NFA, and AECA. See, e.g., 19 U.S.C. 81c(a); 19
CFR 19.1(a). Under the proposed rule, the scope of the exemption for
CBWs would be the same as the one for FTZs and would thus not impact
any other aspect of the requirements under the GCA or NFA.
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\5\ The new definitions for ``importation'' proposed herein are
distinct from how this term is defined for customs law purposes. See
19 CFR 101.1.
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B. Removing the ``for storage'' Limitation on the FTZ Exception in the
Definition of ``importation''
The current definitions of ``importation'' in the GCA and NFA
regulations have caused considerable uncertainty among industry members
as to what kinds of activities are permissible within FTZs (which,
under this proposed rule, would also be permissible in CBWs). This
uncertainty has imposed unnecessary costs on industry members and on
ATF, and it has constrained the ability of the industry to take
advantage of the economic opportunities provided in the customs code.
The FTZ/CBW Open Letter noted that ``storage'' is not defined in the
applicable law or regulation, but that ATF permits limited activities
like repacking or sorting because they are ``incidental to the primary
purpose of storage.'' However, ATF continues to receive questions about
what activities are permitted under this interpretation. It can take
ATF considerable time to respond to these questions to ensure adequate
legal review and consistency in its responses. This incurs labor costs
to the agency (costing taxpayers money), and response delays increase
industry uncertainty.
By removing the requirement from the regulation that items be
brought into FTZs (and, as proposed above, CBWs) only ``for storage,''
there will no longer be ambiguity in these definitions as to what is
and is not permitted. ATF notes that CBP is responsible for determining
what operations pertaining to firearms conducted in a CBW are
permissible and the FTZ Board is responsible for determining what
operations pertaining to firearms conducted in an FTZ are permissible.
For example, manufacturing within CBWs is restricted by CBP
regulations, which permit manufacturing to occur only in specified
warehouses and solely for purposes of exporting from the United States
if the articles are made in whole or in part of imported materials or
of materials subject to internal-revenue tax. See 19 CFR 19.1(a)(6).
Accordingly, although ATF will not preclude firearms from being brought
into an FTZ or CBW for purposes other than storage, whether any
operation other than storage is permitted is contingent upon a
determination by the FTZ Board for FTZs or CBP for CBWs in accordance
with applicable customs laws.
In addition to regulatory clarity, eliminating the storage
limitation for firearms under ATF regulations will benefit industry
members in the United States and the American economy generally. The
storage limitation currently prohibits an importer from bringing
firearms into an FTZ or CBW and performing manufacturing or
manufacturing-type activities on them before selling the firearms
overseas. To do so under the existing regulatory framework, an importer
must go through the process of importing the firearms into the United
States (if they are of the type that can be imported), paying the
duties, performing the work on them, and re-exporting them.
Additionally, because of the regulatory restriction, ATF has previously
denied requests from importers who have sought permission to first
bring nonsporting weapons (which generally cannot be imported under the
GCA) into an FTZ or CBW in order to reconfigure or reassemble them into
sporting configurations before bringing them into the United States, as
permitted by applicable customs laws and regulations. Removing the
storage restriction and allowing other permitted activities like these
to occur within CBWs and FTZs, which are geographically located within
the United States, would provide greater flexibility to businesses in
terms of the types of activities they can do within these spaces on
their firearms using American labor, which in turn would benefit the
American economy.
ATF does not believe that removing the ``for storage'' limitation
will negatively impact public safety or undermine the GCA and NFA.
Regardless of whether firearms are manufactured outside the United
States or manipulated in FTZs (or CBWs) before being imported, the
firearms must qualify for import under the GCA (and NFA, if
applicable), and the importer or manufacturer must be federally
licensed and comply with marking and record-keeping requirements to
ensure the firearms are traceable (and, if required under the NFA, tax-
paid and registered).\6\
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\6\ As noted above, however, to comply with the AECA, an FFL
must complete an ATF Form 6, part I, and obtain approval from ATF
prior to bringing any firearms into FTZs or CBWs. See 27 CFR 447.41.
To subsequently withdraw firearms from an FTZ that can be
permanently imported into the United States per the law and
regulations, FFLs must complete a Form 6A and receive approval from
ATF. See 27 CFR 478.113.
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Additionally, other agencies regulate all activities pertaining to
merchandise brought into FTZs or CBWs, which further alleviates any
public safety concern. For example, manufacturing in CBWs is permitted
in only specified warehouses and solely for purposes of exporting from
the United States articles made in whole or in part of imported
materials or of materials subject to internal-revenue tax. See 19 CFR
19.1(a)(6). In addition, only certain compliant merchandise can be
transported in-bond, necessitating that the merchandise is properly
moved from the port of arrival to an appropriate type of bonded
warehouse at the port of entry. See 19 CFR 18.1.
Finally, clarity in the regulations furthers the Administration's
priority of clearly delineating proscribed conduct so that ``unwitting
individuals'' will not be subject to prosecution. See E.O. 14294,
Fighting Overcriminalization in Federal Regulations, 90 FR 20363 (May
9, 2025). By removing the vague ``for storage'' restriction, the
proposed amendment minimizes potential ambiguity in the regulatory
language.
In addition, ATF is proposing technical edits to the two
definitions for plain writing purposes, and to add ``firearm barrel''
to the definition under 27 CFR 478.11 among items that may be imported,
so that it more faithfully aligns with the statute at 18 U.S.C.
925(d)(3).
III. Statutory and Executive Order Review
A. Executive Orders 12866 and 13563
Executive Order 12866 (Regulatory Planning and Review) directs
agencies to assess the costs and benefits of available regulatory
alternatives and, if regulation is necessary, to select regulatory
approaches that maximize net benefits.
Executive Order 13563 (Improving Regulation and Regulatory Review)
[[Page 25240]]
emphasizes the importance of agencies quantifying both costs and
benefits, reducing costs, harmonizing rules, and promoting public
flexibility.
The Office of Management and Budget (``OMB'') has determined that,
although this rule is not economically significant, this rule is a
``significant regulatory action'' under section 3(f)(1) of Executive
Order 12866. OMB has therefore reviewed this rule. ATF provides the
following analysis to comply with Executive Orders 12866 and 13563. In
2024, ATF published an open letter clarifying that ATF regulations only
permitted firearms and other regulated items to be brought from outside
the United States into FTZs for storage without regard to the GCA's and
NFA's import restrictions and that such an exemption did not extend to
CBWs. As a result, firearms brought into CBWs are currently subject to
the import restrictions of the GCA and NFA. The FTZ/CBW Open Letter
resulted in firearms industry members needing to transition these
activities to FTZs. This proposed rule would amend 27 CFR 478.11 and
479.11 so that items brought into CBWs be excepted from the GCA and NFA
regulatory definitions of ``importation'' in the same way that items
brought into FTZs are currently excepted. This would allow FFL
importers to use CBWs in lieu of FTZs.
Based on ATF's Federal Firearms Licensing Center, there are 1,666
FFL importers. Of these, an unknown subset may have been using CBWs
instead of FTZs. ATF assumes for purposes of this analysis that this
proposed rule would impact approximately 10 percent of all FFL
importers (167 FFL importers).
While using FTZs may be more advantageous than CBWs, some FFL
importers have not used FTZs. Enforcing the GCA and NFA import
restrictions as applied to CBWs requires that non-compliant FFL
importers transition their operating locations to a new location. For
example, they may have to establish an FTZ, which may have a one-time
application fee of $10,000 and require operating agreements, employee
oversight, and annual servicing fees of $10,000.\7\ Since these
operating service agreements, security requirements, and employee
oversight obligations may be customized to suit each particular
location and or size and operation of any given FFL, ATF requests
comments as to the incremental difference in operating costs between
operating in an FTZ compared to a CBW.
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\7\ Greater Dayton Foreign Trade Zone, Inc., How much does a
Foreign Trade Zone Cost?, <a href="https://ftz100.flydayton.com/faq/how-much-does-a-foreign-trade-zone-cost/">https://ftz100.flydayton.com/faq/how-much-does-a-foreign-trade-zone-cost/</a> [<a href="https://perma.cc/KZ4M-9P63">https://perma.cc/KZ4M-9P63</a>].
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Assuming that 10 percent of all FFL importers would move their
operations to an FTZ absent this proposed rule, at minimum the proposed
rule may save the industry a one-time initial application fee of $1.67
million if importers have the option to operate in a CBW.\8\ This
savings may be more or less, depending on the difference in operating
costs between an FTZ and a CBW. Currently, based on anecdotal
information from the industry, the process to move importers'
operations from a CBW to an FTZ may be difficult and cost millions of
dollars to continue operating while seeking a permanent location to an
FTZ. To the extent that there are transition costs, ATF requests public
comments from importers regarding the costs they may incur to an
establish a CBW compared to an FTZ, such costs to apply, the estimated
difference in security cost between a CBW and FTZ, the estimated cost
to move goods and equipment from CBW to an FTZ, and any other
differences in costs incurred when switching from a CBW to FTZ. In
addition, ATF requests information on how this proposed rule may alter
other business decision making and how industry may make use of the
flexibilities granted. For example:
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\8\ $1,670,000 = 167 FFL importers * $10,000 initial application
fee.
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<bullet> What benefits or savings would a business realize by
bringing firearms into a CBW rather than an FTZ?
<bullet> What additional activities, not presently performed on
firearms, does a business anticipate performing in an FTZ or CBW if the
``for storage'' requirement is removed as proposed?
<bullet> Are there other incidental services that make it more
advantageous to bring firearms into a CBW compared to an FTZ?
The benefit to this proposed rule is to allow FFL importers who
have historically used CBWs instead of FTZs to continue to do so and
not require them to transition their operations to an FTZ.
Alternative 1. Maintaining the Status Quo (No Action Alternative)
ATF considered various alternatives, including maintaining the
status quo. Maintaining the status quo would require current non-
compliant FFL importers to move their operations from a CBW to an FTZ.
If, as discussed above, 10 percent of existing FFL importers are
operating in a CBW and need to move their operations and transition to
an FTZ, this would cost them a minimum of approximately $1.67 million
and additional operating costs until these importers could finalize
their change in locations. ATF has concluded that maintaining the
status quo would provide less flexibility for importers and it has
therefore rejected this alternative because it would appear to add more
costs over time.
Alternative 2. Issuing Guidance
Another alternative ATF considered is reissuing guidance to extend
the exemption from importation to CBWs. However, publishing this
interpretation through guidance would not be consistent with the text
of the current regulations, which provides an exemption for only FTZs
but not CBWs; it would therefore be implausible to interpret the
existing regulatory exemption as reaching CBWs. Thus, this alternative
was rejected.
Alternative 3. Rulemaking (Proposed Alternative)
Finally, ATF considered the proposed alternative. ATF proposes to
publish a regulation amending the definition of ``importation'' so that
when items are brought into a CBW they are excepted from the GCA and
NFA import restrictions in the same way that items brought into FTZs
are currently excepted. This change would alleviate the burden on non-
compliant FFL importers from having to move their operations to a new
location, and may thus provide a one-time savings of $1.67 million and
potential operating costs stemming from making the transition.
Furthermore, ATF believes that there would be no additional safety
risks by extending the FTZ exemption from GCA and NFA importation
restrictions to items stored in CBWs.
B. Executive Order 14192
Executive Order 14192 (Unleashing Prosperity Through Deregulation)
requires an agency, unless prohibited by law, to identify at least ten
existing regulations to be repealed or revised when the agency publicly
proposes for notice-and-comment or otherwise promulgates a new
regulation that qualifies as an Executive Order 14192 regulatory action
(defined in OMB Memorandum M-25-20 as a final significant regulatory
action under section 3(f) of Executive Order 12866 that imposes total
costs greater than zero). In furtherance of this requirement, section
3(c) of Executive Order 14192 requires that any new incremental costs
associated with such new regulations must, to the extent permitted by
law, also be offset by eliminating existing costs associated with at
least ten prior regulations. However, this proposed
[[Page 25241]]
rule would not be an Executive Order 14192 regulatory action. Although
it would be a significant regulatory action as defined by Executive
Order 12866, it would not impose total costs greater than zero. The
proposed rule would allow importers more flexibility by including CBWs
as a place where importers can bring firearms into the United States
and by removing the restriction that such items brought into FTZs and
CBWs can be brought in for storage purposes only, consistent with
applicable customs rules and regulations, thereby creating a
qualitative benefit. This rule also imposes no costs. ATF therefore
expects this rule, if finalized as proposed, to qualify as an Executive
Order 14192 deregulatory action (defined by OMB Memorandum M-25-20 as a
final action that imposes total costs less than zero).
C. Executive Order 14294
Executive Order 14294 (Fighting Overcriminalization in Federal
Regulations) requires agencies promulgating regulations with criminal
regulatory offenses potentially subject to criminal enforcement to
explicitly describe the conduct subject to criminal enforcement, the
authorizing statutes, and the mens rea standard applicable to each
element of those offenses. This proposed rule would not create a
criminal regulatory offense and is thus exempt from Executive Order
14294 requirements.
D. Executive Order 13132
This proposed rule would not have substantial direct effects on the
states, the relationship between the federal government and the states,
or the distribution of power and responsibilities among the various
levels of government. Therefore, in accordance with section 6 of
Executive Order 13132 (Federalism), the Director has determined that
this proposed rule would not impose substantial direct compliance costs
on state and local governments, preempt state law, or meaningfully
implicate federalism. It thus does not warrant a federalism summary
impact statement.
E. Executive Order 12988
This proposed rule meets the applicable standards set forth in
sections 3(a) and 3(b)(2) of Executive Order 12988 (Civil Justice
Reform).
F. Regulatory Flexibility Act
Under the Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601-612,
agencies are required to conduct a regulatory flexibility analysis of
any proposed rule subject to notice-and-comment rulemaking requirements
unless the agency head certifies, including a statement of the factual
basis, that the proposed rule would not have a significant economic
impact on a substantial number of small entities. Small entities
include certain small businesses, small not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of fewer than
50,000.
ATF performed an initial regulatory flexibility analysis of the
potential impacts on small businesses and other entities that could
occur due to this proposed rule, if finalized as proposed.
Initial Regulatory Flexibility Analysis (``IRFA'')
The RFA establishes ``as a principle of regulatory issuance that
agencies shall endeavor, consistent with the objectives of the rule and
of applicable statutes, to fit regulatory and informational
requirements to the scale of the businesses, organizations, and
governmental jurisdictions subject to regulation. To achieve this
principle, agencies are required to solicit and consider flexible
regulatory proposals and to explain the rationale for their actions to
ensure that such proposals are given serious consideration.'' Public
Law 96-354, sec. 2(b), 94 Stat. 1164 (1980).
Under the RFA, the agency is required to consider whether the
proposed rule would have a significant economic impact on a substantial
number of small entities. Agencies must perform a review to determine
whether the proposed rule would have such an impact. If the agency
determines that it would, the agency must prepare an IRFA (or a
regulatory flexibility analysis for a final rule) as described in the
Act. See 5 U.S.C. 603(b). ATF prepared the following IRFA assessing the
proposed rule's impact on small entities.
1. Describing the reasons why the agency is considering taking
action.
ATF is proposing this action to provide clarity and flexibility for
importers by permitting them to treat firearms in CBWs the same way
that they treat firearms in FTZs. ATF finds that FTZs and CBWs are
functionally similar spaces for purposes of GCA and NFA import
restrictions by which importers may bring items into the United States
without immediate payment of duty, but the regulation granting
exceptions to FTZs does not currently extend to CBWs. There has since
been a disparity that creates complications and hurdles for importers,
forcing some importers to relocate their operations between facilities
and likely incurring substantial costs in the process. ATF does not
anticipate this rule creating significant economic costs for small
entities, as this rule would have a deregulatory savings that would be
beneficial to FFL importers because they would be afforded the option
to bring their items into either an FTZ or a CBW.
2. Succinctly stating the objectives of, and legal basis for, the
proposed rule.
The objective of this proposed rule is to reduce the regulatory
burden on importers and the public by treating FTZs and CBWs the same
way in the regulatory definition of importing, and making it clearer
for importer FFLs that they are not limited solely to storing firearms
when bringing them into FTZs and CBWs, as consistent with applicable
customs laws and regulations.
3. Describing and, where feasible, estimating the number of small
entities to which the proposed rule would apply.
Based on information from the Federal Firearms Licensing Center,
there are an estimated 1,666 Type 08 FFL firearms importers. For the
purposes of defining small importers, these importers are small
businesses under NAICS \9\ 423910 Sporting and Recreational Goods and
Supplies Merchant Wholesalers (which includes wholesalers/importers of
sporting firearms and ammunition). Importers that fall under this NAICS
would be considered small should they have a workforce of fewer than
100 employees.
---------------------------------------------------------------------------
\9\ NAICS is the North American Industry Classification System,
which is the standard used by federal statistical agencies in
classifying business establishments for the purpose of collecting,
analyzing, and publishing statistical data related to the U.S.
business economy.
---------------------------------------------------------------------------
While the majority of importers are anticipated to fall under NAICS
423910, there may be a subset that fall under NAICS 332994 Small Arms,
Ordnance, and Ordnance Accessories Manufacturing. Importers that fall
under this NAICS would be considered small should they have a workforce
of fewer than 1,000 employees.
Assuming that Type 08 FFL importers track the size of FFLs more
generally, the majority of these importers are likely to be small
businesses, per the Small Business Administration's size standard,
because the majority of FFLs are small businesses.
All Type 08 importers would benefit from this proposed rule because
the rule would extend the existing exemptions that firearms importers
have for GCA and NFA items in FTZs to such items they have in CBWs,
thereby conferring a benefit, and would impose no costs.
[[Page 25242]]
However, based on internal ATF information, there are approximately
21,499 domestic manufacturers of firearms (Type 07 FFL manufacturers)
that may be indirectly and negatively affected by this proposed rule
due to increased competition from importers potentially now being able
to expand imports of foreign firearms. ATF is unable to assess a
significant impact and requests public comment on the impact to small
entities that manufacture and/or sell only domestic firearms.
4. Describing the proposed rule's projected reporting, record-
keeping, and other compliance requirements, including an estimate of
the classes of small entities which would be subject to the requirement
and the type of professional skills necessary to prepare the report or
record.
There are no additional requirements or direct costs imposed by
this proposed rule to importers. This rule would mitigate costs and
burdens on the public. Nor are there direct costs or compliance
requirements for manufacturers, although, as noted above, importers may
potentially increase foreign firearm imports, which then might increase
competition for domestic firearm manufacturers.
5. Identifying, to the extent practicable, all relevant federal
rules which might duplicate, overlap, or conflict with the proposed
rule.
This proposed rule would not duplicate or conflict with other
federal rules.
6. Describing any significant alternatives to the proposed rule
which accomplishes the stated objectives of applicable statutes and
which minimizes any significant economic impact the proposed rule might
have on small entities.
As discussed above, assuming that Type 08 FFL importers track the
size of FFLs more generally, the majority of these importers are likely
to be small businesses, per the Small Business Administration's size
standard. This proposed rule relaxes federal requirements and makes it
so that small businesses may bring firearms into FTZs for purposes
other than merely temporary storage, and into CBWs for the same
expanded purposes, consistent with applicable customs laws and
regulations. This proposal would increase small businesses' importing
options and thus provides a benefit. To the extent that the rule
significantly impacts small businesses, it would alleviate significant
hurdles rather than impose new ones. ATF determined that the benefits
to the proposed rule outweigh the potential impacts to domestic small
businesses indirectly affected by this proposed rule.
ATF seeks input from the public on this proposed rule and whether
there are other alternatives the public believes would accomplish the
same goal that could operate within the statutory and regulatory
framework.
G. Unfunded Mandates Reform Act of 1995
This proposed rule does not include a federal mandate that might
result in the expenditure by state, local, and tribal governments, in
the aggregate, or by the private sector, of $100 million or more in any
one year, and it would not significantly or uniquely affect small
governments. Therefore, ATF has determined that no actions are
necessary under the provisions of the Unfunded Mandates Reform Act of
1995.
H. Paperwork Reduction Act of 1995
Under the Paperwork Reduction Act of 1995 (``PRA''), 44 U.S.C.
3501-3521, agencies are required to submit to OMB, for review and
approval, any information collection requirements a rule creates or any
impacts it has on existing information collections. An information
collection includes any reporting, record-keeping, monitoring, posting,
labeling, or other similar actions an agency requires of the public.
See 5 CFR 1320.3(c). This proposed rule involves two existing
information collections under the PRA. These information collections,
OMB control number 1140-0005, Application/Permit to Import Firearms,
Ammunition, and Defense Articles, which includes ATF Form 5330.3A
(``Form 6, part I''), and OMB control number 1140-0007, Releasing/
Receiving Imported Firearms, Ammunition, and Defense Articles, which
includes ATF Form 5330.3C (``Form 6A''), would be unchanged by this
proposed rule.
IV. Public Participation
A. Comments Sought
ATF requests comments on the proposed rule from all interested
persons. ATF specifically requests comments on the clarity of this
proposed rule and how it may be made easier to understand. In addition,
ATF requests comments on the costs or benefits of the proposed rule and
on the appropriate methodology and data for calculating those costs and
benefits.
All comments must reference this document's RIN 1140-AA93 and, if
handwritten, must be legible. If submitting by mail, you must also
include your complete first and last name and contact information. If
submitting a comment through the federal e-rulemaking portal, as
described in section IV.C of this preamble, you should carefully review
and follow the website's instructions on submitting comments. Whether
you submit comments online or by mail, ATF will post them online. If
submitting online as an individual, any information you provide in the
online fields for city, state, zip code, and phone will not be publicly
viewable when ATF publishes the comment on <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
However, if you include such personally identifying information
(``PII'') in the body of your online comment, it may be posted and
viewable online. Similarly, if you submit a written comment with PII in
the body of the comment, it may be posted and viewable online.
Therefore, all commenters should review section IV.B of this preamble,
``Confidentiality,'' regarding how to submit PII if you do not want it
published online. ATF may not consider, or respond to, comments that do
not meet these requirements or comments containing excessive profanity.
ATF will retain comments containing excessive profanity as part of this
rulemaking's administrative record, but will not publish such documents
on <a href="https://www.regulations.gov">https://www.regulations.gov</a>. ATF will treat all comments as
originals and will not acknowledge receipt of comments. In addition, if
ATF cannot read your comment due to handwriting or technical
difficulties and cannot contact you for clarification, ATF may not be
able to consider your comment.
ATF will carefully consider all comments, as appropriate, received
on or before the closing date.
B. Confidentiality
ATF will make all parts of all comments meeting the requirements of
this section, whether submitted electronically or on paper, and except
as provided below, available for public viewing on the internet through
the federal e-rulemaking portal, and subject to the Freedom of
Information Act (5 U.S.C. 552). Commenters who submit by mail and who
do not want their name or other PII posted on the internet should
submit their comments with a separate cover sheet containing their PII.
The separate cover sheet should be marked with ``CUI//PRVCY'' at the
top to identify it as protected PII under the Privacy Act. Both the
cover sheet and comment must reference this RIN 1140-AA93. For comments
submitted by mail, information contained on the cover sheet will not
appear when posted on the internet, but any PII that appears within the
body of a comment will not
[[Page 25243]]
be redacted by ATF and may appear on the internet. Similarly,
commenters who submit through the federal e-rulemaking portal and who
do not want any of their PII posted on the internet should omit such
PII from the body of their comment and any uploaded attachments.
However, PII entered into the online fields designated for name, email,
and other contact information will not be posted or viewable online.
A commenter may submit to ATF information identified as proprietary
or confidential business information by mail. To request that ATF
handle this information as controlled unclassified information
(``CUI''), the commenter must place any portion of a comment that is
proprietary or confidential business information under law or
regulation on pages separate from the balance of the comment, with each
page prominently marked ``CUI//PROPIN'' at the top of the page.
ATF will not make proprietary or confidential business information
submitted in compliance with these instructions available when
disclosing the comments that it receives, but will disclose that the
commenter provided proprietary or confidential business information
that ATF is holding in a separate file to which the public does not
have access. If ATF receives a request to examine or copy this
information, it will treat it as any other request under the Freedom of
Information Act (5 U.S.C. 552). In addition, ATF will disclose such
proprietary or confidential business information to the extent required
by other legal process.
C. Submitting Comments
Submit comments using either of the two methods described below
(but do not submit the same comment multiple times or by more than one
method). Hand-delivered comments will not be accepted.
<bullet> Federal e-rulemaking portal: ATF recommends that you
submit your comments to ATF via the federal e-rulemaking portal at
<a href="https://www.regulations.gov">https://www.regulations.gov</a> and follow the instructions. Comments will
be posted within a few days of being submitted. However, if large
volumes of comments are being processed simultaneously, your comment
may not be viewable for up to several weeks. Please keep the comment
tracking number that is provided after you have successfully uploaded
your comment.
<bullet> Mail: Send written comments to the address listed in the
ADDRESSES section of this document. Written comments must appear in
minimum 12-point font size, include the commenter's first and last name
and full mailing address, and may be of any length. See also section
IV.B of this preamble, ``Confidentiality.''
D. Request for Hearing
Any interested person who desires an opportunity to comment orally
at a public hearing should submit his or her request, in writing, to
the Director within the 90-day comment period. The Director, however,
reserves the right to determine, in light of all circumstances, whether
a public hearing is necessary.
Disclosure
Copies of this proposed rule and the comments received in response
to it are available through the federal e-rulemaking portal, at <a href="https://www.regulations.gov">https://www.regulations.gov</a> (search for RIN 1140-AA93).
List of Subjects
27 CFR Part 478
Administrative practice and procedure, Arms and munitions, Exports,
Freight, Imports, Intergovernmental relations, Law enforcement
officers, Military personnel, Penalties, Reporting and recordkeeping
requirements, Research, Seizures and forfeitures, Transportation.
27 CFR Part 479
Administrative practice and procedure, Arms and munitions, Exports,
Imports, Military personnel, Penalties, Reporting and recordkeeping
requirements, Seizures and forfeitures, Taxes, Transportation.
For the reasons discussed in the preamble, ATF proposes to amend 27
CFR parts 478 and 479 as follows:
PART 478--COMMERCE IN FIREARMS AND AMMUNITION
0
1. The authority citation for part 478 continues to read as follows:
Authority: 5 U.S.C. 552(a); 18 U.S.C. 847, 921-931; 44 U.S.C.
3504(h).
0
2. Amend Sec. 478.11 by revising the definition of ``Importation'',
including its heading, to read as follows:
Sec. 478.11 Meaning of terms.
* * * * *
Importing (or importation). Bringing a firearm, firearm barrel, or
ammunition into the United States or any possession thereof from a
place outside the United States or any possession thereof, except that
a firearm, firearm barrel, or ammunition brought into a foreign-trade
zone or customs-bonded warehouse is not imported for purposes of this
part until the item is removed from such a facility into the United
States or any possession thereof.
* * * * *
PART 479--MACHINE GUNS, DESTRUCTIVE DEVICES, AND CERTAIN OTHER
FIREARMS
0
3. The authority citation for part 479 continues to read as follows:
Authority: 26 U.S.C. 5801-5822; 26 U.S.C. 7801; 26 U.S.C. 7805.
0
4. Amend Sec. 479.11 by revising the definition of ``Importation'',
including its heading, to read as follows:
Sec. 479.11 Meaning of terms.
* * * * *
Importing (or importation). Bringing a firearm into the United
States from a place outside thereof, or into any territory under the
United States' control or jurisdiction from a place outside thereof,
with intent to unlade, except that a firearm brought into a foreign-
trade zone or customs-bonded warehouse is not imported for purposes of
this part until the firearm is removed from such a facility into the
United States or any territory under its control or jurisdiction.
* * * * *
Robert Cekada,
Director.
[FR Doc. 2026-09162 Filed 5-7-26; 8:45 am]
BILLING CODE 4410-FY-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.