Obama's Vague Rule: Anyone 'Engaged in the Business of Selling Firearms' Must Be Licensed

Susan Jones | January 5, 2016 | 9:57am EST
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Attorney General Loretta Lynch listens as President Barack Obama speaks about his latest executive actions on gun control in the Oval Office on Monday, Jan. 4, 2016. (AP Photo/Pablo Martinez Monsivais)

(Update: Obama on Tuesday said, "Anybody in the business of selling firearms must get a license and conduct background checks or be subject to criminal prosecutions. It doesn't matter whether you're doing it over the Internet or at a gun show. It's not where you do it, but what you do.")

(CNSNews.com) - "[T]oo many gun sales--particularly online and at gun shows--occur without basic background checks," says a fact sheet issued by the Obama administration.

But under the 1993 Brady law, private gun sellers cannot conduct basic background checks, because they are not allowed to access the National Instant Criminal Background Check System (NICS).

Only federally licensed firearms dealers (FFLs) have access to NICS to see if an intended gun sale may proceed.

This week, the Obama administration annouced that it will require more gun sellers -- even people who may sell only one or two weapons over the Internet or at gun shows -- to acquire an FFL, which will give them access to NICS.

"[I]t doesn’t matter where you conduct your business--from a store, at gun shows, or over the Internet: If you’re in the business of selling firearms, you must get a license and conduct background checks," says the administration's fact sheet on "commonsense gun safety reforms."

But what does it mean to be "in the business" of selling firearms?

The fact sheet is somewhat vague on this point. Here's exactly what it says:

Today, the Administration took action to ensure that anyone who is "engaged in the business" of selling firearms is licensed and conducts background checks on their customers. Consistent with court rulings on this issue, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) has clarified the following principles:

-- A person can be engaged in the business of dealing in firearms regardless of the location in which firearm transactions are conducted. For example, a person can be engaged in the business of dealing in firearms even if the person only conducts firearm transactions at gun shows or through the Internet. Those engaged in the business of dealing in firearms who utilize the Internet or other technologies must obtain a license, just as a dealer whose business is run out of a traditional brick-and-mortar store.

-- Quantity and frequency of sales are relevant indicators. There is no specific threshold number of firearms purchased or sold that triggers the licensure requirement. But it is important to note that even a few transactions, when combined with other evidence, can be sufficient to establish that a person is 'engaged in the business.' For example, courts have upheld convictions for dealing without a license when as few as two firearms were sold or when only one or two transactions took place, when other factors also were present. (The fact sheet does not explain what those "other factors" are.)
-- There are criminal penalties for failing to comply with these requirements. A person who willfully engages in the business of dealing in firearms without the required license is subject to criminal prosecution and can be sentenced up to five years in prison and fined up to $250,000. Dealers are also subject to penalties for failing to conduct background checks before completing a sale.

The ATF's current application for a Federal Firearms License, found here, undoubtedly will change. Right now, question 18-a on the downloadable application asks, "Do You Intend To Sell Firearms Only at Gun Shows? (If yes, do not submit application)," the FFL application says.

The current fee for getting a "dealer" FFL is $200 for a license that's good for three years. It's not clear if that cost will go up.

Appearing on MSNBC Tuesday morning, Obama's top adviser Valerie Jarrett said President Obama is taking an "important step" in expanding background checks for sales over the Internet and at gun shows:

"Absolutely," he has the authority to do this, Jarrett told Joe Scarborough.

"Why didn't the president do that after Newtown?" Scarborough asked her.

"Well, our first priority was to get Congress to pass...an act that would have been more comprehensive. That's the best solution, Joe, of course, is to get Congress to act," Jarrett said. "In their failure to act, the president passed 23 executive orders that have made great improvements in terms of how we share data from the state and local level, improving our own technology.

"And after Orgeon (the community college shooting), he said, Look, I want my team to go back and take another look and see what more we can do. And so that's when the team came up with this packagae that the president will present today."

President Obama will discuss his latest executive action on guns later today (Tuesday).

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