The 'Gun Show Loophole' Hasn't Narrowed
When trying to understand the most-hyped of President Obama's new executive actions on guns, it helps to keep two things in mind.
One: Under preexisting law, a licensed dealer has to perform a background check before selling a gun, while a private individual doesn't. It's wrong to call this a "gun-show loophole" — in fact, licensed dealers still have to do checks at gun shows, and private individuals still don't have to do checks when they sell elsewhere — but it's certainly an aspect of the law that allows guns to change hands without a background check.
And two: Anyone "engaged in the business" of buying and selling firearms must become a licensed dealer, again under preexisting law. That phrase is defined thus:
a person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms, but such term shall not include a person who 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
This is where the hype came from: Before the administration detailed its plan, there was widespread speculation that the president would "narrow" (or even "close") the alleged loophole by tightening the executive branch's interpretation of these words, for example by imposing a cap on the number of guns someone can sell before having to get a license. This would have been highly problematic: If a gun collector decides to sell "all" of his huge collection, the law explicitly says he can do that, but this imagined executive order would forbid it. There may be good reasons to change the law, but this is not something that the president can do by himself.
So what did the president actually do about private sales that fall into the "gun-show loophole"? Nothing. The administration simply regurgitated the status quo.
Clarify that it doesn't matter where you conduct your business-from a store, at gun shows, or over the Internet: If you're in the business of selling firearms, you must get a license and conduct background checks. Background checks have been shown to keep guns out of the wrong hands, but too many gun sales-particularly online and at gun shows-occur without basic background checks. Today, the Administration took action to ensure that anyone who is "engaged in the business" of selling firearms is licensed and conducts background checks on their customers. Consistent with court rulings on this issue, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) has clarified the following principles:
• A person can be engaged in the business of dealing in firearms regardless of the location in which firearm transactions are conducted. For example, a person can be engaged in the business of dealing in firearms even if the person only conducts firearm transactions at gun shows or through the Internet. Those engaged in the business of dealing in firearms who utilize the Internet or other technologies must obtain a license, just as a dealer whose business is run out of a traditional brick-and-mortar store.
• Quantity and frequency of sales are relevant indicators. There is no specific threshold number of firearms purchased or sold that triggers the licensure requirement. But it is important to note that even a few transactions, when combined with other evidence, can be sufficient to establish that a person is "engaged in the business." For example, courts have upheld convictions for dealing without a license when as few as two firearms were sold or when only one or two transactions took place, when other factors also were present.
• There are criminal penalties for failing to comply with these requirements. A person who willfully engages in the business of dealing in firearms without the required license is subject to criminal prosecution and can be sentenced up to five years in prison and fined up to $250,000. Dealers are also subject to penalties for failing to conduct background checks before completing a sale.
For those who are reasonably familiar with the way gun laws work, most of this isn't even a clarification. In fact, a lot of it is mere common sense: Of course selling a lot of guns, or acquiring the various trappings of a business (say, credit-card processing capabilities), might raise suspicion — both with law enforcement and eventually with a jury — that you are dealing guns and not just buying and selling from a personal collection. You can do these things, but you should have a good explanation to present to any investigators who ask. Even the most seemingly shocking claim, that selling "as few as two firearms" can get you into trouble, is rooted in actual court cases. It's not something new that lawless Obama is doing.
Obama has announced other tweaks to various gun policies as well (see the fact sheet), and they're not all meaningless. And this "clarification" might really be an announcement that investigators and prosecutors will get more aggressive about these cases, or an attempt to use vague language to chill private gun sales. (The libertarian law blog Volokh Conspiracy has a good trio of posts exploring the various angles.) But in light of the rumors that circulated before the actual announcement, this is a nothingburger as far as actually changing the law is concerned.
Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen