Later this morning, the Commerce Department will announce a new rule making their Bureau of Industry and Security’s alleged “90 day pause” to review current firearm export review policies permanent.
The new rule will be effective on May 30 as an “interim final” with a 60-day wind-down for existing licenses.
A comment period will be provided to July 1, 2024.
The BIS’s 90-day pause (now in its sixth month) has already taken a toll on small companies supplying component parts to the rest of the industry.
With today’s approaching announcement, it appears “pause” might more accurately described as a BIS “trial balloon.”
A negative impact on American businesses was not supposed the stated purpose of the ‘pause” - it was to assess policies and security issues. Yet in an administration that has declared the gun industry to be “the enemy” it’s probably seen as an added benefit, not an abandonment of the Commerce Department’s mission to champion U.S. commerce.
According to briefers Thea Kendler and Jim Golsen changes under this new rule will: separate non-semi automatic weapons from automatic ones, include a new requirement for a license for all jurisdictions, include more rigorous standards for review- including ending presumption of approval for OAS states, extend denials to all countries with arms embargoes under ITAR, and change foreign policy factors for license determinations.
There will also be additional requirements for licenses -including a passport and national identity card for individuals listed as end users, along with a reduction of license validity periods to one year.
While the briefing and announcement might have come as a surprise to people inside the beltway, it wasn’t unexpected news to anyone outside it.
The administration has repeatedly taken unprecedented actions. They remain undeterred by the squawks of protest by Congress and have given the proverbial middle finger to the Supreme Court and found “work arounds” when their rulings didn’t go their way.
For outside observers, the only unexpected portion of the announcement was the surprising announcement that there would be a public comment period.
The sixty day window should allow individuals and businesses to express their position on the BIS ruling -and the literal and potential business impact
During the briefing, BIS was “unwilling” to provide any economic impact assessment. The industry estimates the potential impact at $258 million per year.
Those sized numbers are, essentially, meaningless to most of us. Throw in enough zeroes and numbers leave us numb.
But the pause and potential for the new rule isn’t just about import/export “numbers” - it’s also about people’s lives and livelihood.
Speak with the Chamber of Commerce in Celina, Tennessee and they’ll give you numbers from a totally different perspective. One of the companies that couldn’t survive the “pause” was located there. Despite what was described as a “great plan, excellent equipment and skilled workers,” Outdoorsman Precision Machining is out of business. In a town with only 1,400 residents, every job matters. Ten jobs lost are a potential calamity.
Washington doesn’t see the impact of their regulatory decisions, good or bad.
Celina, like many other small towns doesn’t just see the impact, they live with it.
With major companies like Barrett, Beretta and Smith & Wesson located in Tennessee, there is considerable attention being paid to the Commerce Department and its planned rule change.
Despite the Commerce Department downplaying any impact of their 180-plus day “pause” on industry the latest export numbers indicate there most certainly was a negative impact.
That “90 day pause” has now exceeded two business quarters. The January 2024 Firearms and Ammunition Export numbers from the NSSF show a decline of 38.6 percent for the handgun category, a two-plus percent drop in rifle exports and a 23 percent decrease in shotguns from 2023.
Ammunition (other than shotgun cartridges) dropped 7.8 percent and shotgun ammunition decreased 14 percent.
Compare that with significant increases in exports of telescopic sights, binoculars and sound suppressors and there’s a spread that simply doesn’t jibe with any assertion of limited impact.
The impact is genuine. Claims to the contrary are not.
As always, we’ll keep you posted.
— Jim Shepherd
