Significant changes in policies for exporting firearms and related products to the international civilian market are in process at the U.S. Commerce Department’s Bureau of Industry and Security (BIS).
Nearly all licensable shipments of firearms, optics, or ammunition to distributors, dealers, and other civilians outside the United States will likely be affected. Many have been affected already.
Read this post to learn how to maintain your international sales to 41 countries during this time of uncertainty.
Certain Changes Have Been Announced
On October 27, 2023, BIS suddenly announced that it had stopped processing licenses to export firearms and related products to international distributors, dealers, and other civilian end-users. The announcement said this policy would remain in effect until late January 2024. Forty-one countries were excluded. They are listed at the end of this post.
BIS’s action means that no export licenses will be issued for exports to non-governmental end users in all but 41 countries until the end of January 2024. This applies not only to newly submitted licenses, but also to licenses that were pending on October 27, 2023. Licenses issued prior to October 27, 2023 are not affected, at least not yet. Exports authorized by those licenses can continue for now.
BIS said the purpose of ceasing the processing of export licenses to the affected countries was for BIS to assess whether current policies adequately protect against the diversion of exported products to unlawful purposes. The announcement did not expressly state that new licensing procedures will be implemented, but it seems inevitable that change lies ahead.
Some Changes Have Occurred Already
Certain unannounced changes have occurred in recent months:
- The U.S. Office of Export Enforcement (OEE) has been conducting checks on all civilian end-users named in export licenses. These involve verifying that the end user is an appropriate recipient of the products being exported. The labor associated with end-user checks has strained OEE’s resources. Processing time for export licenses to civilian end-users has increased significantly.
- BIS recently instituted new internal sign-off procedures for export licenses to the civilian market, which has contributed to increased processing time.
- BIS is requesting supporting documentation for licenses more than in the recent past. Supporting documents being requested include import permits, Form BIS 711 end user statements, dealers’ licenses, and other information about end-users and end uses.
- BIS has tightened its requirements for evidence that actual orders underlie licenses. Until recently, a forecast of potential exports under a license did not need to be submitted. Exactly what is required now has yet to be defined.
10 Actions American Exporters Should Take
New rules are unlikely to be announced before the end of January 2024, but there are certain things American suppliers of firearms, parts, scopes, and ammunition to civilian customers outside the U.S. can do in the interim. We are implementing all of them in our own business.
- Accelerate shipments under open licenses. It is possible that upcoming changes could affect previously issued licenses. Therefore, consider getting shipments out the door sooner under open licenses when possible.
- Adjust lead time expectations. Sellers and buyers alike should adjust their expectations as to when shipments will occur under licenses yet to be issued.
- Attach additional end user documentation. BIS hasn’t required that dealer licenses or other evidence of end users’ authority to be in the firearms business be submitted with licenses, but conscientious exporters have that evidence. Now that end-user checks are being done for every license, it certainly won’t hurt to attach the customer’s dealer or importer license to your licenses. Check expiration dates to avoid accidentally submitting an expired document.
- Attach Form BIS 711. BIS has not always asked for Form BIS 711 end user statements in the past, but we have been encouraged informally to start attaching them to licenses, and we intend to do so.
- Investigate end users’ import authorization. If you are in possession of your customer’s import permit when you submit a license, we recommend attaching it to the license. If you don’t have an import permit yet, consider attaching a statement to the license explaining how any applicable requirements for import authorization will be addressed before shipment.
- Attach order forecasts to licenses. We have received questions from BIS recently about the basis for quantities requested in licenses. We are developing a format for submitting order forecasts with our export licenses. You may want to consider doing something similar.
- Reduce authority requested for future exports. Until new licensing rules are announced, consider submitting licenses that cover fewer future orders than you used to cover.
- Ship non-licensable items separately. If an order contains non-licensable EAR99 or 0A501.y items as well as items that require export licenses, consider stripping out the non-licensable items and shipping them separately.
- Educate end users about end-user checks. Consider educating end-users about end-user checks, so they aren’t surprised when contacted by OEE. Provide guidance on how they can cooperate with OEE to minimize delay.
Summarizing the above, make it easy for BIS to say yes to your licenses.
American companies in the firearms industry and their international partners use EasyExport’s automated platform to do business conveniently and in compliance with all applicable export and import regulations. EasyExport clients include Volquartsen Firearms, Ranger Point Precision, Tandemkross, XS Sights, Griffin Armament, and other respected brands.
Since March 2020, EasyExport clients have grown international revenues and extended the reach of their brands by sending nearly 7,000 shipments to vetted and approved dealers, importers, and firearm owners in over 40 countries.
For a real-time update on the evolving new export licensing rules, please visit us at Booth 42721 at SHOT Show or in the USA Pavilion at IWA 2024.
These 41 countries are exempt from the halt in processing export licenses: