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Ever Wonder What A Loophole Looks Like?

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by Dave Kopel

Should the government keep lists of people who exercise their constitutional rights? If you write a letter to a newspaper, or join a church, or possess a firearm, should your name be entered into a government database?

According to the gun prohibition lobbies, every gun and every gun owner must be registered by the government. They accurately recognize that confiscation of some or all firearms is very difficult without comprehensive gun registration. To get comprehensive registration, they must close the “loophole” that allows private transfers of firearms.

Legislation introduced in the U.S. Senate by Charles Schumer, D-N.Y., and vigorously promoted by Michael Bloomberg’s gun-ban group “Mayors Against Illegal Guns” would help accomplish the prohibitionists’ objectives. The House version of the bill, H.R. 1781, has 86 co-sponsors, nearly a fifth of all U.S. representatives.

And don’t count on the Supreme Court to stop any of this. Heller is one vote away from being overturned, and if President Barack Obama is re-elected, the odds of him being able to appoint a replacement for one of the five pro-Second Amendment justices are pretty strong. Justice Antonin Scalia is 76 years old, and Justice Anthony Kennedy is 75.

Make no mistake, the gun prohibition groups aim to close the “loophole” that prevents the government from creating lists of all guns and those who own them.

The existence of the so-called “loophole” starts with the fact that the federal government does not impose upon ordinary people the special laws that apply to federally licensed firearm dealers.

Let’s start with some basics. Most federal gun control laws are based on the power that the Constitution gives Congress “[t]o regulate Commerce . . . among the States.” Pursuant to this power, Congress enacted a statute (the Gun Control Act of 1968) that says private individuals may not sell (or otherwise transfer) firearms across state lines. In order to sell a firearm across state lines, at least one party to the transaction must have a Federal Firearms License (FFL). (“FFL” is the standard abbreviation for both the license itself and for the licensee.)

So an FFL is, by definition, a licensed person engaged in the interstate commerce of firearms. It is only an FFL, for example, who can buy guns from a wholesaler or manufacturer and then retail them to the general public.

Federal law imposes various requirements on FFLs. They must keep records of every sale they make, and these records are subject to inspection by the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE). Before completing a sale, the FFL must contact the FBI’s National Instant Criminal Background Check System (NICS), or its state equivalent, and obtain authorization.

If you are “engaged in the business” of selling firearms, then you must have an FFL. Otherwise, every single sale would be a serious federal felony. Federal law defines “engaged in the business” as repeated transactions for profit. In contrast, a person is not engaged in the business of dealing in firearms if he or she makes “occasional sales, exchanges or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms. …” 18 U.S.C. §921(a)(21)(c). And if you aren’t “engaged in the business,” you can’t get an FFL.

So for regular people who occasionally sell guns (e.g., a person who sells one of his rifles to a friend in a hunting club), the special laws for firearm businesses do not apply. The seller does not need to keep a record of the sale, the seller is not subject to warrantless inspection by the BATFE and the seller does not need to get prior permission from the government for the sale. At the same time, the occasional seller does not enjoy the privilege, which FFLs have, of being able to buy or sell guns across state lines.

It’s just common sense that the special laws that apply to businesses with a federal license do not apply to ordinary people who are not in the business and therefore cannot obtain the federal license.

Regardless of whether you have an FFL or not, one federal law does always apply: It is a felony to transfer a gun to someone if you have “reasonable cause” to believe that the individual is a “prohibited person.” A prohibited person is someone who is prohibited by federal law from possessing a gun; examples include convicted felons, illegal aliens, persons who have been adjudicated mentally defective and so on.

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