We’ve written about auctioneers and firearm sales numerous times. First in 2010 and maybe most notably in 2016:
Generally speaking, we have been trying (unsuccessfully) to tell auctioneers how to stay out of trouble — namely avoiding large fines and staying out of prison. On the contrary we keep seeing and hearing, “There must be a way I can …” with one of a variety of workarounds; for example:
“I have an FFL come to my facility and take the guns back to his location to do background checks …”
“I just have the seller bring his gun to my place and hold it up …”
I sell the guns and then the seller takes them to an FFL for a background check …”
“We have the buyer take the firearm to the FFL, and then the FFL collects the fee and pays the auctioneer …”
“I have the FFL bring the guns to my gallery, stay with them, then return to his shop to do the background checks …”
“Isn’t there an ‘estate exemption?’ in that if it’s an estate — no FFL is needed …?”
“Can’t I have the seller consign the firearms to an FFL and then conduct the auction …?
I’ve had 100’s of other suggestions that “There must be a way …” but there doesn’t have to be another way. Per federal law, it is in fact this simple:
You as an auctioneer need to be licensed as a Federal Firearms Licensee (FFL) to contract to sell firearms unless:
You contract with the owner, executor, administrator, guardian or the like
You sell the firearms onsite at the principal’s location
The client maintains actual or constructive possession of all firearms
The client maintains control over all firearms at all times
Firearms transfer directly from the seller to the buyer
There is no use of a Federal Firearms Licensee to facilitate any transfers*
All buyers reside in the same state as the seller, except for any FFL buyers
There are no consignments — there is only one single seller
Auctioneer does not buy and sell firearms, as a business
Auctioneer does not hold himself out as a dealer in firearms
Auctioneer does not make a living in dealing in firearms
Auctioneer does not repeatedly assist the same seller with his firearms
The asterisk (#6) above notes that FFL’s cannot conduct background checks and transfer firearms on behalf of an unlicensed (non-FFL) auctioneers (https://www.atf.gov/firearms/qa/can-licensee-conduct-background-checks-and-transfer-firearms-behalf-unlicensed).
As some point out there are indeed procedures for sellers and buyers to utilize an FFL for a private transfer as is detailed in two documents:
Facilitating Private Sales: A Federal Firearms Licensee Guide: https://www.atf.gov/file/110076/download
ATF Proc 2017-1 – Private Firearms Transfers Through FFLs: https://www.atf.gov/firearms/docs/ruling/atf-proc-2017-1-private-firearms-transfers-through-ffls/download
However, the ATF doesn’t mention “auctioneer” nor “auction” nor “estate-type” in regard to our topic herein, so I would propose these could well be considered purely “buyer-seller” private transfer procedures.
For an auctioneer selling at auction and receiving compensation using the “estate-type” exemption above, it would appear to us the auctioneer is using an FFL to at minimum partially assist (on behalf of) a non-FFL-licensed auctioneer — something that the ATF strictly prohibits and thus likely violating #6 as well as #4 and #5 above.
Want to stay out of prison? Want to avoid large fines? Want to stay in business? If you are asked to sell firearms and you are not a Federal Firearms Licensee, check off all 12 (without any exceptions) and review your state and local laws and then proceed.
If you can’t check off all twelve, refer those firearms to an FFL and maybe earn a referral fee, or if possible apply for a Federal Firearms Licensee yourself. Currently the license is only $200 and renewal is only $90 for three years.
I realize an Alcohol, Tobacco, Firearms & Explosives (ATF) agent told you differently. As an auctioneer and good friend of mine noted, many ATF agents are blissfully unaware of the nuances of these laws; it’s clear many auctioneers regularly hear contrasting answers to the same questions.
We have had material conversations with many auctioneers in jeopardy from illegally selling firearms as well as executive staff within the ATF. There appears to be a concerted effort to enforce these laws as I’ve described above across the United States.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.
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