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Writer's pictureMike Brandly, Auctioneer

Are you using another’s FFL?

You? An auctioneer who’s selling firearms and isn’t licensed as a Federal Firearms Licensee (FFL.) You decide you will utilize an FFL to do background checks for you. What does the ATF think about this? They say you can’t do this.

Of course, if you were an FFL, you could do your own background checks, thus, you’re looking for a “workaround.” Yet, the ATF says this: https://www.atf.gov/firearms/qa/can-licensee-conduct-background-checks-and-transfer-firearms-behalf-unlicensed.

Specifically,

Can a licensee conduct background checks and transfer firearms on behalf of an unlicensed auctioneer? Generally no, because most auctions do not qualify as a gun show or qualifying event and therefore a licensee would not be permitted to conduct business away from the licensed premises.” United States Department of Justice

Is there any circumstance where you can sell firearms at auction without securing an FFL? Per federal law if you do occasional single-seller (who is maintaining possession) on-site “estate-type” auctions where you sell only to in-state buyers and to (and not by means of) any FFL holders.

Incidentally, “estate-type” is a type of auction — an auctioneer can’t merely declare he or she is the seller’s agent and/or proclaim “it’s an estate” and avoid licensing requirements. If you as an auctioneer contract, actually (or constructively) possess the firearms, market, and accept bids away from the seller’s site … you’re clearly “engaged in the business.”

Except, importantly, at the time of this writing, many states have laws that go beyond federal law and require universal background checks for all transfers. If your state law permits “partnering” with an FFL in this regard, it would be [currently] counter to federal law — even more reason to be licensed (as an FFL) yourself.

A court case involving a conflict between state law and federal law (state sovereignty vs. the supremacy clause) would be unnecessarily costly and time-consuming while securing your own Federal Firearms License (FFL) would avoid all that; this prudent decision also makes sense in light of additional restrictions on the horizon.

I’m well aware that “your” ATF agent told you … or another ATF agent said you could … but we’re privy to dozens of cases where auctioneers relied on local ATF office advice, only to find out they were out of compliance with federal law — as interpreted by officials in Washington D.C. with the United States Department of Justice.

We have written about firearms laws relating to auctioneers selling them at auction numerous times including here: There doesn’t have to be a way … and the penalties can involve $500,000 in fines and 10 years in prison: https://mikebrandlyauctioneer.wordpress.com/2019/11/08/auctioneers-firearms-and-there-must-be-a-way/.

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, Brandly Real Estate & Auction, and formerly at Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He has served as faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.

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