Saturday, March 26, 2016

Rule 41p Update

At the NRA Firearms Law Seminar in Nashville, Tennessee today, the ATF provided some almost surprising statements regarding gun trusts and implementation of proposed Rule 41p.

First of all, in regard to gun trusts, NFA Branch attorney William Ryan stated that ,in his opinion, the largest cause of the backlog at the NFA Branch is the submission of non-attorney drafted trusts and fill-in trusts, which result in a high number of error letters due to their invalidity.  He is quoted as having actually stated that he highly advises that attorneys handle the drafting of trusts because of the numerous problems they are dealing with in regard to the no-attorney drafted trusts.  For illustration purposes, he indicated that there were only 45 trust applications in 2003, but that number had climbed to over 36,000 by 2012.

While this may be a problem for some template providers, you don't have to be worried about a gun trust, as it has been drafted by a leading, experienced gun trust attorney.  We believe it's the best drafted trust available on the market today.

As to proposed Rule 41p, Ryan indicated that they are "still sorting through the comments filed in opposition to ATF-41p" and there remain comments that haven't yet been reviewed.  Because the review process has not yet been completed, the agency is unable to have drafted a final rule taking into account those comments or issues raised.  In addition, once a final rule has been drafted, it has to go through office of Chief Counsel for review.  Mr. Ryan indicated that he had no idea when to expect the agency to take any action, so it certainly seems that the May 2015 target date for making a final decision will be punted into the future by at least another 6 months.

Additional comments made by Mr. Ryan seemed to clearly contradict the ATF's purported reason for promulgating Rule 41p in the first place.  When asked what happens when the executor/personal representative of a probate estate containing NFA firearms is a prohibited person, he responded "He can't possess [them]."  When pressed further on how the ATF would ever know that the executor was a prohibited person because no background check is performed, Ryan replied, "It is on that person to know that as well."

This clearly contradicts the expressed purpose and reasoning behind Rule 41p.  Remember, they said that this rule was necessary because prohibited persons were gaining access to NFA firearms through trusts and other legal entities, so this new rule was necessary to ensure that "responsible persons" in any entity had to get the CLEO signature, etc. and submit all that stuff with any application made by the entity so that the ATF's review process (and background check) could be performed.

Now, their attorney is suggesting that they are comfortable with a prohibited executor/personal representative self-regulating and complying with requirements of federal  law on their own, but not trustees of a trust?  Wait a second!  Don't they often (if not usually) become "prohibited" because they don't care to subject themselves to the law?

Maybe we all need to submit supplemental comments to this ridiculous rulemaking proposal to call them out on this foolishness!!

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