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CRS Reports & Analysis
Legal Sidebar
President Obama Announces Executive Actions to
Reduce Gun Violence
01/08/2016
On January 5, 2016, President Obama announced executive actions aimed at, among other things, keep[ing] guns out
of the wrong hands through background checks and mak[ing] our communities safer from gun violence. These
actions include, for example, directing specified executive agencies to conduct or sponsor research into gun safety
technology and finalizing a rule requiring firearms shippers to notify law enforcement of any firearms lost or stolen in
transit. Of the announced measures, though, the one that arguably may have the most immediate impact on firearm
transactions and individual behavior is guidance issued by the Bureau of Alcohol, Tobacco, Firearms, and Explosives
(ATF) clarifying what it means for an individual or organization to be engaged in the business of dealing firearms for
purposes of the Gun Control Act of 1968 (GCA), as amended.
The GCA make it unlawf for individuals and organizations to be engaged in the business of dealing firearms without
a license from the federal government. Individuals and organizations licensed by the government are known as federal
firearms licensees (FFLs). Under the GCA, before FFLs may transfer (e.g., sell) firearms, they must conduct
background checks on potential transferees (e.g., purchasers). The GCA also subjects FFLs to multiple recordkeeping
requirements. Willfully engaging in the business of dealing firearms without a license can result in five.years
iMprisonment and/or a fine of up IQ $250,000 for individuals and $500,000 for organizations.
Under the GCA, individuals or organizations that are engaged in the business of dealing firearms, and thus subject to the
act's licensing requirement and ensuing obligations, are tlhse that devote[] time, attention, and labor to dealing in
firearms as a regular course of trade or business with the principal objective of livelihood and profit through the
repetitive purchase and resale of firearms. However, federal firearms licenses are not.reguired for those who: (1)
occasionally sell or purchase firearms as a hobby or to enhance their personal firearms collection; or (2) sell all or part
of their personal firearms collection. The ATF regulations implementing the GCA's definition of engaged in the
business mirror the act.
There have been a number of court decisions shedding light on what it means to be engaged in the business of dealing
firearms under the GCA. Determining whether a person unlawfully engaged in the business of dealing firearms is fact
specific and depends on the particular circumstances of the case before the court. Federal courts have observed that
relevant factors-can incde: (1) the quantity and frequency of firearms sales; (2) sale location; (3) how the sales
occurred; (4) the defendant's behavior before, during, and after the sales; (5) the type of firearms sold and prices
charged; and (6) the defendant's intent at the time of the sales. At least one federal appellate court, though, appears to
require less proof. In the Second Circuit, the government must prove only that the defendant held himself out as a
source of firearms. And because the number of firearms sold is only one of many factors courts consider, convictions
under §922(a)(1)(A) for unlawfully dealing firearms without a license have been sustained for as few as t3, or four
firearms sales.
ATF's guidance appears to put its imprimatur on the factors generally used by the federal courts to determine whether a
person has unlawfully engaged in the business of dealing firearms. For example, the guidance reiterates that whether a
person is engaged in the business of dealing firearms depends on the specific facts and circumstances of the person's
activity, and is not limited to any particular location, quantity, or frequency of sales. Thus, as the guidance points out,](ViewImageLocal?handle=hein.crs/crsmthabeys0001&div=1&collection=&method=preview&ext=.png&size=3)
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