• Bloomberg


What makes a gun dealer?

With executive actions this week, President Barack Obama plunged into the murky endeavor of defining who is in the business of selling firearms under the law.

What resulted was guidance from the Bureau of Alcohol, Tobacco, Firearms and Explosives — titled “Do I Need a License to Buy and Sell Firearms?” — that raises as many questions as answers.

It doesn’t define a dealer by the number of guns sold, the dollar value or the frequency of sales. The definition isn’t determined by sales over the Internet or at a gun show. And it relies on gun sellers to step forward — under penalty of heavy fines and jail time if they fail to do so.

“That’s been the problem to date — that there hasn’t been a clear working definition to figure out who is a dealer and isn’t,” Kari Hong, who teaches law at Boston College, said in a telephone interview. “However well-intended this current measure is, it will provide some clarity, but the concern is it will not provide the consensus that it’s intended to.”

The definition is important because a dealer must get a license and submit buyers’ names for an instant criminal background check before selling them guns. Yet the federal gun control act of 1986 provides an exemption for people who sell guns from their personal collection or as a hobby, and it sets no conventional measure for determining when a hobby becomes a business.

That has let some sellers operate under the legal radar at gun shows, at flea markets, from kitchen tables or on the Internet.

Gun control advocates say this “gun-show loophole” has been exploited by some sellers. Chelsea Parsons, vice president for guns and crime policy at the Center for American Progress, a Washington policy group generally aligned with the administration, said the lack of clarity has let high-volume weapons dealers operate online and at shows without conducting background checks, potentially selling arms to criminals.

Attorney General Loretta Lynch said the new guidance is limited by the law’s ambiguity about what it means to be a firearms dealer.

“The statute doesn’t provide a numerical threshold, and we essentially operate under the current statute and legal framework,” she told reporters Monday. “Because there is no threshold in the statute, we have not imposed one in the guidance.”

Instead, the guidance says that criteria might include whether firearms are sold in original packaging, whether the transaction is conducted via a credit card or whether seller have business cards describing themselves as arms dealers.

The 15-page guidance from ATF underscores how opaque the issue remains. “Federal law does not establish a ‘bright-line’ rule for when a federal firearms license is required,” it says.

ATF included nine scenarios aimed at helping sellers understand if they should obtain a license.

“Debby has three handguns at home, and decides that she no longer wants two of them,” one of the examples says. For the purposes of the law, the fictional Debby isn’t a dealer.

Aside from that example, none of the others include any numbers specifying how many guns are involved or how much money is made. They employ open-ended terms such as “substantial amount of money,” “multiple firearms” and “frequently.”

“Doug regularly attends gun shows and rents a table to display firearms for sale,” one of them reads. “He makes a substantial amount of money annually, and uses this money to live on.”

According to ATF, Doug has to obtain a license to continue selling guns and shouldn’t be exempted. The penalty for failing to register is a maximum of five years in prison and a $250,000 fine.

“Absent objective criteria, you can see how that can quickly become confusing,” Hong of Boston College said.

The National Shooting Sports Foundation said in a statement that the new guidance for who must register as a licensed gun dealer “needs considerable clarification.”

The National Rifle Association, the nation’s biggest gun lobby, accused Obama of engaging in “political exploitation” without raising specific objections. “We will not allow law-abiding gun owners to be harassed or intimidated for engaging in lawful, constitutionally protected activity,” the organization said in a statement.

ATF will engage in an educational initiative in the coming months, with agents going to gun shows and contacting online dealers to help, Lynch said.

The Justice Department “will be looking to see whether or not if people, once on notice, comply with this regulation or whether there are those who seek to still sort of hide in the shadows or hide behind the exceptions,” she said.

Everytown for Gun Safety, the nation’s leading advocacy group for tighter gun restrictions, said in a report last year that the lack of a clear definition has discouraged prosecutors from bringing charges against people who deal in firearms without a license. There were fewer than 300 such prosecutions at the federal level in 2011 and 2012, according to the report.

Former New York City Mayor Michael Bloomberg founded and helps fund Everytown. He is the founder and majority owner of Bloomberg LP, parent of Bloomberg News.

The group says individuals selling hundreds of guns per year have been able to operate online without obtaining a license and conducting background checks and called on Obama to set a threshold specifying that those who sell more than 25 gun per year were presumed to be professional arms dealers.

“On the one hand it would effect a very small share of total gun owners and gun sellers,” Ted Alcorn, research director for Everytown, said in a telephone interview. “On the other hand, we’re talking about tens of thousands of firearms.”

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