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*** R|D ALERT ***

ATF Publishes Three Rulings on Electronic Records and Consolidation of Records
Part 2 of 3

This alert is the second of three installments reviewing ATF's recent rulings on recordkeeping.  Our previous alert of May 11, 2016, covered ATF. Rul 2016-1, which addresses the requirements for federal firearms licensees ("FFLs") to maintain their acquisition and disposition records electronically rather than on paper.  In this alert, we review  ATF Rul. 2016-2

ATF Rul. 2016-2
In this ruling, ATF addresses electronic versions of the Form 4473, Firearms Transaction Record.  This is the form that must be completed when an FFL transfers a firearm to an unlicensed recipient.  Regulations in 27 C.F.R. Part 478, Subpart H, require that FFLs prepare Form 4473 in paper form with handwritten entries.  Rul. 2016-2 states FFLs are permitted to use software to prepare the Form 4473 without obtaining an approved variance, as long as certain requirements (summarized below) are met.
It is important to note that the holding of the ruling supersedes ATF Rul. 2008-3 and supersedes all previously approved variances covering the use of an electronic Form 4473.  The changes from Rul. 2008-3 are identified in below red and underscore. FFLs should study the ruling carefully (available on ATF's website) to determine whether their software systems and procedures are consistent with the ruling and take appropriate action.
  • The FFL must download from ATF's website the most current electronic version of ATF e-Form 4473 OR acquire other software for this purpose.  
  • The software must display clearly all the Notices, Instructions, and Definitions on the version of the Form 4473 approved by the Office of Management and Budget ("OMB"). 
  • The software must create and populate the fields on the Form 4473 for each transaction and cannot populate Section A of the form based on previous transfers to the same transferee.
  • The transferee (buyer) of the firearm(s) must answer questions for Section A while physically present at the seller's premises (including a qualifying gun show or event). The questions that appear on the computer screen must be legible and have identical wording as that on the OMB-approved Form 4473.
  • The software must allow the transferee/purchaser to revise his or her answers until such time that he or she completes the certification statement on the form.  Once the certification is completed, the software must not allow further revisions to Section A.
  • The transferee/buyer must confirm answers in Section A with a signature and date, certifying that answers are true, correct, and complete and that he or she has read and understood the conditions, notices, definitions, and instructions on the form.
  • The transferor/seller then enters information into the computer for Sections B and D of the e-Form 4473.  The questions must be legible and contain the same wording as the current OMB-approved Form 4473. 
  • The transferee and transferor signatures on the form may be electronic signatures captured via an electronic signature pad prior to printing or may be handwritten signatures on the printed copy of the e-Form 4473.
  • If the electronic signature pad does not operate properly, the FFL must obtain handwritten signatures on the OMB-approved Form 4473 or the printed copy of the e-Form 4473.
  • If the transferee/buyer cannot read and/or write, another person, excluding the FFL or its employees, may complete Section A of the e-Form 4473.  Two persons, other than the FFL or employees, must then sign as witnesses.  The transferee/buyer may electronically sign or mark the e-Form 4473.  The two witness signatures must be handwritten in ink on the printed e-Form 4473.  
  • All NICS or State POC information must be entered accurately in the e-Form 4473 in the appropriate fields.  These entries may be auto-populated or manually entered.  The information may also be handwritten on the form after printing.
  • FFLs must contact FBI/NICS or the appropriate state agency to request authorization to transfer NICS data from e-Check into the computerized e-Form 4473.
  • Exceptions to NICS and State POC check requirements must be recorded on the e-Form 4473 in the appropriate fields.
  • FFLs who wish to maintain e-Forms 4473 for pending transactions must download the transactions to a physical storage device at the licensed premises as follows:
  • At least daily in an unencrypted format with the required information readily apparent;
  • Upon request of an ATF officer, within 24 hours of request;
  • Prior to discontinuance or change of the software, the database system, and/or the host facility; and
  • Prior to the FFL's discontinuance of firearms business.
  • FFLs who wish to maintain e-Forms 4473 for pending transactions may store them on a computer server or device owned and operated by the FFL or through a host facility, provided that:
  • The e-Forms 4473 are readily accessible through a computer server or device located at the licensed premises during regular business hours;
  • The e-Forms 4473 documenting a pending transaction must be printed out upon request by any ATF officer;
  • The e-Forms 4473 documenting a pending transaction must be searchable by the transferee's last name, address, and by firearms information, such as serial number, manufacturer, and importer.
  • The licensee's server is located within the U.S. or its territories, or if a host facility is used, the facility must have a business premises within the U.S. or its territories and be subject to U.S. legal process;
  • FFLs must maintain stored e-Forms 4473 on a separate/partitioned database that cannot be intermingled with another licensee's records; and
  • The system must back up the stored e-Forms 4473 on at least a daily basis.
  • FFLs who change a host facility must, within 30 days of the change, notify the local ATF area office of the name and address of the host facility.
  • If the transfer of the firearm(s) takes place on a different day that the transferee signed Section A, the transferee must complete Section C immediately prior to the transfer of the firearm(s).  The software must not allow the electronic signature of the transferee to be automatically populated from the signature previously provided.
  • The e-Form 4473 must be printed, including instructions, at the time the transfer of the firearm is complete and prior to the transferee departing the licensed premises.  The transferor must verify that the signature and date are present and in the appropriate fields on the printed ATF Form 4473.
  • In the case of denied, no sale, or cancelled transactions, the Form 4473, including instructions, must be printed and retained in accordance with the regulations.
  • If the transaction is not completed within the 30-day period after contacting NICS, the ATF Form 4473, including instructions, must be printed and the printout retained in accordance with the regulations.
  • FFLs must print all Forms 4473, including instructions, on 8-1/2" x 11" white paper.  Pages must be stapled together and the copy must be an exact image of the current OMB-approved Form 4473.  Pages may be printed single-sided or double-sided.
  • Printed Forms 4473 must be retained at the licensed premises in accordance with the regulations.
ATF Rul. 2016-2 states the ruling does not apply to FFLs who use software that gathers information other than that set forth on the current OMB-approved Form 4473. 

This concludes our review of Rul. 2016-2.  We will address ATF Rul. 2016-3 in our last installment on May 13, 2016.

The above alert is for informational purposes only and is not intended to be construed or used as legal advice. Receipt of this alert does not establish, in and of itself, an attorney-client relationship.    

Questions about this alert can be directed to: 

Johanna Reeves: 202.715.9941  | [email protected]
Teresa Ficaretta:    202.715.9183  [email protected]
Katherine Heubert: 202.715.9940  | [email protected]

About Reeves & Dola

Reeves & Dola is a Washington, DC law firm that specializes in helping clients navigate the highly regulated and complex world of manufacturing, sales and international trade of defense and commercial products. We have a deep understanding of the Federal regulatory process, and use our expertise in working with a variety of Federal agencies to assist our clients with their transactional and regulatory needs.

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