The entrance to the national headquarters of the ATF
The entrance to the national headquarters of the ATF / Stephen Gutowski

Analysis: ATF Report Suggests Licensed Gun Dealers Aren’t Fueling Black Market Sales [Member Exclusive]

A new ATF report undermines the Biden administration’s rationale for cracking down on gun dealers.

On Thursday, the ATF released Volume Three of the National Firearms Commerce and Trafficking Assessment. The report, the first comprehensive analysis of criminal gun trafficking by the agency since 2000, examined over 9,700 ATF firearm trafficking investigations between 2017 and 2021 to create a picture of the most common sources of black-market firearms.

It found sales by unlicensed private sales and straw purchases represented just over 80 percent of all cases. Stolen firearms accounted for another quarter of the trafficked guns.

On the other hand, the report identified just 136 cases of illegal trafficking by Federal Firearms Licensees (FFLs). That represents 1.6 percent of cases during the five-year period.

The agency said those numbers represented a sharp decline from the previous report.

“The data analyzed in this report indicates that a shift in the types of trafficking channels used over the course of the last two decades has occurred,” a summary of the report reads. “Corrupt FFL investigations represented almost 9% of trafficking investigations in the 2000 report, but now represent less than two percent of trafficking investigations.”

The picture painted by the report stands in contrast to the one President Joe Biden has presented since taking office. He has repeatedly warned of the dangers of “rogue gun dealers” and instituted a more adversarial approach to the gun industry, including a “zero-tolerance” policy that has dramatically increased the number of license revocations under his tenure.

Biden announced the new policy in June 2021, intending to stem the flow of guns into criminal hands. It directed the ATF to begin revoking FFLs for single violations of federal law, with a particular emphasis placed on dealers found to be “willfully transferring a firearm to a prohibited person, failing to run a required background check, falsifying records, such as a firearms transaction form, failing to respond to an ATF tracing request, or refusing to permit ATF to conduct an inspection in violation of the law.” It also allowed the agency to revoke licenses for other perceived violations of federal law not explicitly included in that list.

The ATF’s new report shows that special scrutiny on licensed gun businesses is likely misplaced.

According to the agency, there were 134,516 active FFLs by the end of 2021. So, the ATF only suspects around 0.1 percent of FFLs may have been involved in illegal trafficking in the lead-up to the President’s zero-tolerance policy. Furthermore, the agency’s report confirmed that its suspicions of the industry’s involvement in criminal gun trafficking were already on a downward trend from previous decades, even as the period studied covered the most significant surge in gun buying in US history.

That extra scrutiny has also come at the expense of strained relations between the firearms industry and the ATF. Almost immediately after Biden enacted the zero-tolerance policy, the industry and its allies began complaining that licenses were being revoked for clerical errors and other minor infractions by agents using, at times, controversial enforcement tactics.

“Previous to the Biden administration, minor clerical errors found during inspections were annotated for corrective action with ATF inspectors instructing firearm retailers on how to stay within regulations and laws,” Larry Keane, General Counsel for the National Shooting Sports Foundation (NSSF), wrote in a February post. “That’s no longer the case. Instead of using the ATF as a government bureau to assist the firearm industry to stay within regulations, President Biden and his ATF have turned it into a steel trap by which they snare firearm retailers to run them out of business.”

FFL revocations have steadily ramped up each year since the President put the directive in place. The ATF revoked 157 licenses in 2023, 88 licenses in 2022, and five in the last six months of 2021. Another 173 FFLs have since voluntarily surrendered their licenses over the same time.

Some of the revocations were for conduct that contributed to illegal firearms trafficking. However, revocation documents published by the ATF also include numerous cases where there was no evidence the dealers intentionally committed violations or that their actions led to firearms being used in crimes. Several revocations show dealers made paperwork errors or accepted gun-carry permits in lieu of a background check to make a sale without understanding the exception doesn’t apply to out-of-state permits.

So, even as the President’s crackdown on licensed firearms dealers continues apace, his administration’s research shows that effort is unlikely to put a meaningful dent into illegal gun trafficking.

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Created by potrace 1.16, written by Peter Selinger 2001-2019

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Created by potrace 1.16, written by Peter Selinger 2001-2019

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