Defining “Willfully” for Firearms Violations

from the FCRA's. Unlike the FCRA, the GCA uses “willfully,” without qualification, to describe the culpability required for violating the same body of law that amounts to both a criminal and civil violation. In the FCRA, “willfully” is reserved only for civil violations, while another mens rea, like “knowingly and willfully,” is required for criminal violations or consequences of greater severity. The GCA's text has none of the attributes of the FCRA's text that compelled the Supreme Court in Safeco to interpret “willfully” to require less culpability than knowledge but more than negligence. The GCA does not pair “knowingly and willfully.” “Willfully” is consistently used throughout the GCA for both criminal punishments and license revocations, and the word is meant to require more culpability than “knowingly.” Nowhere does the GCA's text distinguish between what is willful for criminal punishment, but not for license revocation. Moreover, the Supreme Court has already interpreted “willfully” in the context of criminal punishment under the GCA to require a heightened culpability of one “act[ing] with knowledge that his conduct was unlawful.” Bryan, 524 U.S. at 191-192.

Identical words used in the same Act, especially when referring to the same underlying conduct (“violate[] any . . . provision” of the GCA), must bear the same meaning. 7 “Willfully” cannot

sometimes include “knowingly,” but sometimes not. “Willfully” must have a consistent meaning when it is used in the same Act in reference to the same body of law. And that meaning must be consistent with how the Supreme Court defined the term in Bryan.

7 See Valerie C. Brannon, Cong. Research Serv., R45153, Statutory Interpretation: Theories, Tools, and Trends 55 (2023) citing Robers v. United States, 572 U.S. 639, 643 (2014) (quoting Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit, 547 U.S. 71, 86 (2006)) (internal quotation marks omitted ); see also, e.g., Cochise Consultancy, Inc. v. United States

ex rel. Hunt, 587 U.S

erm in Bryan.

7 See Valerie C. Brannon, Cong. Research Serv., R45153, Statutory Interpretation: Theories, Tools, and Trends 55 (2023) citing Robers v. United States, 572 U.S. 639, 643 (2014) (quoting Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit, 547 U.S. 71, 86 (2006)) (internal quotation marks omitted ); see also, e.g., Cochise Consultancy, Inc. v. United States

ex rel. Hunt, 587 U.S. 262, 268 (2019) (“In all but the most unusual situations, a single use of a statutory phrase must have a fixed meaning.”); see also William N. Eskridge, Jr. Phillip P. Fricky, Elizabeth Garrett, & James J. Brudney, Cases and Materials on Legislation and Regulation: Statutes and the Creation of Public Policy 1198 (5th ed. 2014) (“presumption of statutory consistency”); Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 170 (2012) (“presumption of consistent usage”).

Apart from questions of statutory interpretation, amending the regulatory definition of “willfully” is also appropriate in light of ATF's former enforcement policy. During the prior administration, ATF attempted to implement a “zero tolerance” policy for gun dealers. 8 This zero-tolerance policy directed ATF to initiate revocation proceedings for five categories of conduct: “(1) transferring a firearm to a prohibited person, (2) failing to run a background check, (3) falsifying records, such as a firearms transaction form, (4) failing to respond to an ATF tracing request, or (5) refusing to permit ATF to conduct an inspection in violation of the law.” 9

8 See Fact Sheet: Biden-Harris Administration Announces Comprehensive Strategy to Prevent and Respond to Gun Crime and Ensure Public Safety (Jun. 23, 2021), https://bidenwhitehouse.archives.gov/briefing-room/statements-releases/2021/06/23/fact-sheet-biden-harris-administration-announces-comprehensive-strategy-to-prevent-and-respond-to-gun-crime-and-ensure-public-safety/ [ https://perma.cc/5KPZ-X6AK ].

9 Id

Sheet: Biden-Harris Administration Announces Comprehensive Strategy to Prevent and Respond to Gun Crime and Ensure Public Safety (Jun. 23, 2021), https://bidenwhitehouse.archives.gov/briefing-room/statements-releases/2021/06/23/fact-sheet-biden-harris-administration-announces-comprehensive-strategy-to-prevent-and-respond-to-gun-crime-and-ensure-public-safety/ [ https://perma.cc/5KPZ-X6AK ].

9 Id.

Although these violations could only warrant revocation if done “willfully,” the prior administration's policy diluted the willfulness requirement—lowering the bar, in practice, from intentional/reckless wrongdoing to negligence. During licensing inspections, ATF Industry Operations Investigators (“IOIs”) provided federal firearms licensees (“FFLs”) with a review of the GCA's provisions and implementing regulations verbally. This practice has often been the subject of scrutiny because ATF has argued that the review of the acknowledgment with an IOI placed licensees on notice of the GCA's legal requirements—requirements that are numerous and, in some cases, difficult and technical. Because FFLs were then supposedly on notice of the GCA's pertinent legal requirements, ATF would move to revoke licenses when these requirements were violated, even if the violations were unintentional and the kind of violations that could occur through inadvertence. Specifically, FFLs were justifiably concerned that, under the prior administration's policies, ATF would initiate revocations for unintentional violations or repeat violations based on a standard of plain indifference to a known legal requirement. In practice, that culpability amounted to simple negligence. That result is precisely what Congress tried to stop when it passed FOPA

ough inadvertence. Specifically, FFLs were justifiably concerned that, under the prior administration's policies, ATF would initiate revocations for unintentional violations or repeat violations based on a standard of plain indifference to a known legal requirement. In practice, that culpability amounted to simple negligence. That result is precisely what Congress tried to stop when it passed FOPA.

ATF has since rescinded the zero-tolerance policy but, given this history, ATF has determined that revised regulatory language is appropriate to respond to concerns about the dilution of the GCA's mental state requirement and necessary to prevent the reimposition of abusive enforcement practices in the future. Thus, consistent with Bryan, ATF proposes to define “willfully” in 27 CFR 478.73 in a manner that aligns with the higher standard of deliberate or intentional action knowingly violating the statute. ATF proposes to require that a person must intentionally and purposely engage in conduct that the law forbids and must act with actual knowledge that the person's conduct is unlawful. While persons need not know the specific law they violate, they must know the conduct is unlawful.

In revising the regulatory language, ATF will also define “willfully” as it applies to repeated violations, willful blindness, and supervisor-employee liability. The delineation of these concepts will capture much of what a proper definition of “plain indifference” would have captured but reduce the risk of abusive enforcement practices by clarifying that a repetitive error is not inherently willful, particularly when it results from the kind of error that may be committed through inadvertence.

B. Proposed Revisions

ATF proposes to add the definition of willfully to § 478.73, rather than to the general definitions section in § 478.11, because the term “willfully” arises in only § 478.73 and has particular meaning in this context

clarifying that a repetitive error is not inherently willful, particularly when it results from the kind of error that may be committed through inadvertence.

B. Proposed Revisions

ATF proposes to add the definition of willfully to § 478.73, rather than to the general definitions section in § 478.11, because the term “willfully” arises in only § 478.73 and has particular meaning in this context. It is easier for readers to understand the regulatory requirements if the particular definition is in the same location as the term used only in that section. Therefore, ATF proposes adding the definition in a new paragraph (c) under § 478.73. Paragraph (c) would define “willfully” while paragraphs (c)(1)-(3) would provide more information on how the term applies in specific scenarios, to clarify when an FFL's conduct rises to the level of willful behavior. These scenarios are: cases of repeated violations (failing to prevent a violation from recurring), willful blindness, and actions by a person with supervisory authority.

Paragraph (c)(1) would clarify the relationship between willfulness and repeated violations. It provides that “[e]vidence of repeated violations with knowledge of the law's requirements may be sufficient to establish willfulness.” Thus, a licensee who credibly claimed not to know a provision of the GCA might have a legitimate defense for a first violation. But upon a second violation, such a defense would not be credible, and evidence of a prior violation could be used as evidence that a person's conduct was willful.

Paragraph (c)(1) also recognizes, however, that not all repeat violations are willful. Given the complicated nature of the GCA and its forms and implementing regulations, some paperwork and regulatory violations may be repeated but unintentional. For example, a person may check the wrong box on a form or miss a line with information that is supposed to be filled out. Simple paperwork mistakes, done without willful intent, should not be the basis of license revocations

s are willful. Given the complicated nature of the GCA and its forms and implementing regulations, some paperwork and regulatory violations may be repeated but unintentional. For example, a person may check the wrong box on a form or miss a line with information that is supposed to be filled out. Simple paperwork mistakes, done without willful intent, should not be the basis of license revocations. That is why paragraph (c)(1) provides that “in every case, the totality of the circumstances must be considered to determine willfulness, including the nature of the repeated violations and whether they resulted from inadvertent error.”

Paragraph (c)(2) would provide that deliberately avoiding knowledge of the law or regulation is not an excuse. A person shall be deemed to act willfully if he or she takes deliberate actions to avoid learning about the law or regulation. This codifies traditional standards on willful blindness. Licensees cannot evade responsibility for willful violations by deliberately refusing to learn the law or regulation governing the activity.

Finally, paragraph (c)(3) would establish when a person with supervisory authority or a responsible person may be deemed to have willfully violated the GCA based on willful violations of his or her employees or subordinates. Supervisory authorities or responsible persons, who are not a principal in or accessory to violating the GCA, act willfully if they have actual knowledge that their employee violated the law or regulation and they ratify the employee's action by (1) failing to cure the violation; (2) concealing the violation; or (3) failing to take appropriate remedial or disciplinary action against the employee who committed the violation

responsible persons, who are not a principal in or accessory to violating the GCA, act willfully if they have actual knowledge that their employee violated the law or regulation and they ratify the employee's action by (1) failing to cure the violation; (2) concealing the violation; or (3) failing to take appropriate remedial or disciplinary action against the employee who committed the violation. This paragraph would limit the application of respondeat superior to actions ratified by the licensee, i.e., those in which a

licensee has knowledge that conduct is unlawful and fails to take action to remedy the violation, conceals the violation (thus creating a personal stake in the misconduct), or fails to take reasonable steps to prevent its recurrence. Respondeat superior is a common law doctrine “whereby a master is liable for his servant's torts committed in the course and scope of his employment.” Horras v. Leavitt, 495 F.3d 894, 904 (8th Cir. 2007) (quoting Burger Chef Sys., Inc. v. Govro, 407 F.2d 921, 925 (8th Cir. 1969)). Courts have held that under the doctrine of respondeat superior, a type of vicarious liability, the unlawful acts of their employees can be imputed to FFLs, especially when such conduct is willful. 10

10 See Fairmont Cash Mgmt., 858 F.3d at 363 (rejecting the position that the doctrine of respondeat superior does not apply to the FFL when its employee partakes in willfully illegal conduct).

Even if federal law permits licensees to be vicariously liable for the actions of their employees, this proposed rule seeks comment on whether such strict liability is appropriate as a matter of policy. Strict liability for employee misconduct may result in a licensee losing its license due to a single bad subordinate actor without considering remedial actions the employer may have taken. Large businesses with many employees would particularly suffer because a single rogue employee could imperil the entire business, regardless of the due care shown by managers and owners

te as a matter of policy. Strict liability for employee misconduct may result in a licensee losing its license due to a single bad subordinate actor without considering remedial actions the employer may have taken. Large businesses with many employees would particularly suffer because a single rogue employee could imperil the entire business, regardless of the due care shown by managers and owners. In practice, ATF has not applied a full vicarious liability standard when revoking federal firearms licenses. The proposed rule accords with current practice and rejects full vicarious liability for employee misconduct as a matter of policy.

The proposed standard articulated in this rule would draw a proper balance between ensuring that FFLs take responsibility for the employees under their supervision while not unfairly holding them strictly liable for actions of which they were unaware. A licensee or responsible person's behavior would only be willful under the proposed standard if the licensee or responsible person had actual knowledge of the employee's unlawful misconduct and ratified the action in certain ways. The concept of a principal “ratifying” an agent's actions is well known in the law of agency. See Restatement (Third) of Agency sec. 4.01-4.08. ATF believes that the particular conduct enumerated ( e.g., failing to cure the violation or failing to take remedial or disciplinary action against an employee) is the kind of conduct that demonstrates that the principal assents to the conduct as if it had been authorized, see Restatement (Third) of Agency sec. 4.01(1), (2). That would make a violation intentional and, consequently, willful.

Paragraph (c)(3) would also reflect that the principal's assent may be shown by omission ( e.g., failing to cure a violation). Misconduct by an employee should trigger an employer's affirmative duty to rectify and prevent that misconduct to the extent practicable

ts

ATF estimates the impacts of the proposed rule to be primarily characterized by reduced burden on its regulated industry, specifically entailing qualitative benefits to current and future FFLs. Revising the definition of “willfully” would offer greater clarity and predictability to regulated licensees,

which would constitute qualitative benefits to a potential majority of the 100,000 FFLs.

In addition, properly defining “willfully” would result in quantifiable cost savings to FFLs who commit minor, technical, or unintentional violations. Those FFLs, under an alternative definition, could have been served notices of ATF's intent to suspend or revoke their license or impose a civil fine for inadvertent violations of the GCA. Those FFLs would either face administrative consequences or enter hearings to challenge ATF's intended action.

ATF's interpretation of “willfully,” however, still subjects FFLs to revocation proceedings due to willful or repeated violations of federal firearms laws that advance public safety. 11 In such situations, FFLs are entitled to due process throughout the inspection and revocation process. To revoke a license, ATF must find that the FFL willfully committed at least one violation of the GCA or its regulations. FFLs have the right to appeal a final license revocation to federal court. 12

11 Qualifying willful violations include: transferring a firearm to a prohibited person, failing to conduct a required background check, falsifying records, failing to respond to a trace request, and refusing to allow ATF to conduct an inspection. ATF might also revoke an FFL for willful violations of the GCA that are not included in the ATF list above.

12 Additional information about the revocation process is available at www.atf.gov/firearms/revocation-firearms-licenses [ https://perma.cc/566X-9RTB ]

required background check, falsifying records, failing to respond to a trace request, and refusing to allow ATF to conduct an inspection. ATF might also revoke an FFL for willful violations of the GCA that are not included in the ATF list above.

12 Additional information about the revocation process is available at www.atf.gov/firearms/revocation-firearms-licenses [ https://perma.cc/566X-9RTB ].

Between 2021 and 2024, ATF operated under the enhanced regulatory enforcement policy (“EREP”), which was based on the broader definition of “willfully” discussed in section II.A of this preamble. As a result, data on the number of notices or proxy letters and the number of hearings provides a baseline from which to estimate the number of persons in the future who might be impacted if this proposed rule does not go into effect. In turn, that number represents the number of FFLs who would potentially benefit from cost savings from this proposed rule.

ATF determined the portion of ATF administrative hearings and revocations/other dispositions that were attributable to the enforcement policy. Based on data over the four-year average between 2021 and 2024, out of a total of 397 inspections that resulted in notices, 183 went to hearing while 214 did not. FFLs requested hearings and incurred associated costs for 46 percent of the notices. ATF therefore applied this same percentage to the number of notices sent to FFLs for one of the qualified violations (refer to footnote 11), to estimate the number of FFLs that would no longer incur the costs of hearings if this rule were issued as proposed

sulted in notices, 183 went to hearing while 214 did not. FFLs requested hearings and incurred associated costs for 46 percent of the notices. ATF therefore applied this same percentage to the number of notices sent to FFLs for one of the qualified violations (refer to footnote 11), to estimate the number of FFLs that would no longer incur the costs of hearings if this rule were issued as proposed.

To estimate the number of notices, ATF combined data on both revocations and other non-revocation dispositions (such as suspensions, fines, or no action) over time, which resulted in the following data:

Table 1—Data on Revocations and Other Dispositions 2018 2019 2020 2021 2022 2023 2024 Revocations 49 43 40 27 90 170 195 Other dispositions 15 3 62 168 182 Notices/proxy letters 49 43 55 30 152 338 377 Percent change between years −12 28 −45 407 122 12 The EREP policy, which relied on a broad reading of the definition of “willfully,” resulted in an increase of 407 percent in ATF's estimated number of notices between 2021 and 2022 when EREP was implemented, followed by additional increases of 122 and 12 percent, respectively, over the two years that followed. Applying the statistic that 46 percent of cases result in a hearing to the number of notices for each year, ATF estimated the number of hearings over the past seven years, in Table 2.

Table 2—Data on Revocations and Other Dispositions 2018 2019 2020 2021 2022 2023 2024 Notices/proxy letters 49 43 55 30 152 338 377 Estimated number of notices resulting in hearings 23 20 25 14 70 155 173 Using this data to produce a baseline average of hearings per year before and after the EREP based on the broader definition of “willfully” yielded a baseline average of 20 hearings per year, compared to an EREP average of 133 hearings per year

s 2018 2019 2020 2021 2022 2023 2024 Notices/proxy letters 49 43 55 30 152 338 377 Estimated number of notices resulting in hearings 23 20 25 14 70 155 173 Using this data to produce a baseline average of hearings per year before and after the EREP based on the broader definition of “willfully” yielded a baseline average of 20 hearings per year, compared to an EREP average of 133 hearings per year. The difference nets an increase of 113 hearings per year under the policy, assuming it would have remained steady over time—from which ATF projects that, if this rule does not go into effect, 113 more FFLs per year could, in the future, incur the costs for appeal hearings because the broader definition applied by courts in civil cases could continue being used even without the EREP.

Assuming a hearing takes six hours on average, and that legal representation would total approximately $350 per hour, 13 each hearing would result in an estimated legal cost of $2,100 per FFL. This benefit in the form of potential cost savings, when applied to the annual average of 113 hearings, results in an annual potential savings to FFLs of $237,300 from this proposed rule, which would result in cost savings of $2.373 million over ten years.

13 See, e.g., Clio, Average Lawyer and Non-Lawyer Hourly Rates by State, https://www.clio.com/resources/legal-trends/compare-lawyer-rates/ [ https://perma.cc/8NZV-8TAB ].

While this would be the estimated quantitative impact of reversing an internal enforcement policy, codifying a more stringent standard that would likely reduce regulatory enforcement actions over time would be similar, or perhaps slightly greater, and on an enduring basis.

3. Costs

In addition to the qualitative and quantitative benefits discussed above, ATF estimates the impacts of the proposed rule to also include potential

qualitative costs in the form of greater risks to public safety

difying a more stringent standard that would likely reduce regulatory enforcement actions over time would be similar, or perhaps slightly greater, and on an enduring basis.

3. Costs

In addition to the qualitative and quantitative benefits discussed above, ATF estimates the impacts of the proposed rule to also include potential

qualitative costs in the form of greater risks to public safety.

The data above includes annual revocations under the baseline of 195 in 2024, 170 in 2023, and 90 in 2022, which results in a three-year average of 152 revoked federal firearms licenses per year. ATF expects to reduce this estimate considerably based on shifting enforcement priorities and this proposed rule, which would raise the threshold for what qualifies as a violation that could result in a suspension, revocation, or civil fine.

Many violations are likely minor and not due to purposeful evasion. Nonetheless, there remains the possibility that incidents of neglect, uncorrected subordinate employee error, or other avoidable violations could go uncorrected without the threat of consequences or incentive for mitigating or corrective action. As a result, an unknown proportion of these 152 violators per year might continue to violate the existing regulations, thereby increasing the risk of harm to public safety. While slim, there are chances that such violations might result in unfavorable social outcomes, such as a prohibited person obtaining a firearm without a background check, an FFL refusing to comply with a trace request in pursuit of a violent criminal, or other similar consequential violations.

4. Regulatory Alternatives

ATF considered three alternatives: continuing the status quo without changing the existing regulatory definition; issuing guidance to internal ATF enforcement divisions and personnel who enforce the provisions; or revising the existing regulation

law, to identify at least ten existing regulations to be repealed or revised when the agency publicly proposes for notice-and-comment or otherwise promulgates a new regulation that qualifies as an Executive Order 14192 regulatory action (defined in OMB Memorandum M-25-20 as a final significant regulatory action under section 3(f) of Executive Order 12866 that imposes total costs greater than zero). In furtherance of this requirement, section 3(c) of Executive Order 14192 requires that any new incremental costs associated with such new regulations must, to the extent permitted by law, also be offset by eliminating existing costs associated with at least ten prior regulations. However, this proposed rule would not be an Executive Order 14192 regulatory action. Although it is a significant regulatory action as defined by Executive Order 12866, it would not impose total costs greater than zero. This proposed rule would provide qualitative benefits by offering greater clarity to the public and regulated licensees, and would provide a clear definition for courts to apply when assessing cases under ATF's implementing regulations. By adopting a more stringent standard for regulatory enforcement, the proposed rule would also ensure minor, technical, or unintentional violations would not result in suspension, revocation, or civil fine notices for FFLs. It is possible there could be some risk to public safety from FFLs that do not take the necessary steps to rehabilitate neglectful practices that may result in unfavorable social outcomes, such as a prohibited person obtaining a firearm without a background check, or not complying timely with a trace request in pursuit of a violent criminal. Those risks, however, are speculative

notices for FFLs. It is possible there could be some risk to public safety from FFLs that do not take the necessary steps to rehabilitate neglectful practices that may result in unfavorable social outcomes, such as a prohibited person obtaining a firearm without a background check, or not complying timely with a trace request in pursuit of a violent criminal. Those risks, however, are speculative. Therefore, as discussed above, ATF expects this rule, if finalized as proposed, to qualify as an Executive Order 14192 deregulatory action (defined by OMB Memorandum M-25-20 as a final action that imposes total costs less than zero) because it relaxes the standard upon which regulatory enforcement action may be taken against FFLs.

C. Executive Order 14294

Executive Order 14294 (Fighting Overcriminalization in Federal Regulations) requires agencies promulgating regulations with criminal regulatory offenses potentially subject to criminal enforcement to explicitly describe the conduct subject to criminal enforcement, the authorizing statutes, and the mens rea standard applicable to each element of those offenses. This proposed rule would not create a criminal regulatory offense and is thus exempt from Executive Order 14294 requirements.

D. Executive Order 13132

This proposed rule would not have substantial direct effects on the states, the relationship between the federal government and the states, or the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132 (Federalism), the Director has determined that this proposed rule

would not impose substantial direct compliance costs on state and local governments, preempt state law, or meaningfully implicate federalism. It thus does not warrant preparing a federalism summary impact statement.

E. Executive Order 12988

This proposed rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 (Civil Justice Reform).

F

r by mail, ATF will post them online. If submitting online as an individual, any information you provide in the online fields for city, state, zip code, and phone will not be publicly viewable when ATF publishes the comment on https://www.regulations.gov. However, if you include such personally identifying information (“PII”) in the body of your online comment, it may be posted and viewable online. Similarly, if you submit a written comment with PII in the body of the comment, it may be posted and viewable online. Therefore, all commenters should review section IV.B of this preamble, “Confidentiality,” regarding how to submit PII if you do not want it published online. ATF may not consider, or respond to, comments that do not meet these requirements or comments containing excessive profanity. ATF will retain comments containing excessive profanity as part of this rulemaking's administrative record, but will not publish such documents on https://www.regulations.gov. ATF will treat all comments as originals and will not acknowledge receipt of comments. In addition, if ATF cannot read your comment due to handwriting or technical difficulties and cannot contact you for clarification, ATF may not be able to consider your comment.

ATF will carefully consider all comments, as appropriate, received on or before the closing date.

B. Confidentiality

ATF will make all comments meeting the requirements of this section, whether submitted electronically or on paper, and except as provided below, available for public viewing on the internet through the federal e-rulemaking portal, and subject to the Freedom of Information Act (5 U.S.C. 552). Commenters who submit by mail and who do not want their name or other PII posted on the internet should submit their comments with a separate cover sheet containing their PII. The separate cover sheet should be marked with “CUI//PRVCY” at the top to identify it as protected PII under the Privacy Act. Both the cover sheet and comment must reference this RIN 1140-AA88

ength. See also section IV.B of this preamble, “Confidentiality.”

D. Request for Hearing

Any interested person who desires an opportunity to comment orally at a public hearing should submit his or her request, in writing, to the Director within the 90-day comment period. The Director, however, reserves the right to determine, in light of all circumstances, whether a public hearing is necessary.

Disclosure

Copies of this proposed rule and the comments received in response to it are available through the federal e-rulemaking portal, at https://www.regulations.gov (search for RIN 1140-AA88).

Severability

Consistent with the Administrative Procedure Act, the issues raised in this proposed rule may be finalized, or not, independently of each other, after consideration of comments received. ATF has determined that this proposed rule implements and is fully consistent with governing law. However, in the event this proposed rule is finalized, if any provision of that final rule, an amendment or revision made by that rule, or the application of such provision or amendment or revision to any person or circumstance, is held to be invalid or unenforceable by its terms, the remainder of that final rule, the amendments or revisions made by that rule, and application of the provisions of the rule to any person or circumstance shall not be affected and shall be construed so as to give them the maximum effect permitted by law.

List of Subjects in 27 CFR Part 478

Administrative practice and procedure, Arms and munitions, Exports, Freight, Imports, Intergovernmental relations, Law enforcement officers, Military personnel, Penalties, Reporting and recordkeeping requirements, Research, Seizures and forfeitures, Transportation.

For the reasons discussed in the preamble, ATF proposes to amend 27 CFR part 478 as follows:

PART 478—COMMERCE IN FIREARMS AND AMMUNITION

1. The authority citation for part 478 continues to read as follows:

Authority:

5 U.S.C. 552(a); 18 U.S.C. 847, 921-931; 44 U.S.C. 3504(h)

nel, Penalties, Reporting and recordkeeping requirements, Research, Seizures and forfeitures, Transportation.

For the reasons discussed in the preamble, ATF proposes to amend 27 CFR part 478 as follows:

PART 478—COMMERCE IN FIREARMS AND AMMUNITION

1. The authority citation for part 478 continues to read as follows:

Authority:

5 U.S.C. 552(a); 18 U.S.C. 847, 921-931; 44 U.S.C. 3504(h).

2. Revise § 478.73 to read as follows:

§ 478.73 Notice of revocation, suspension, or imposition of civil fine. (a) Basis for action. The Director may issue an ATF Form 4500 to notify a licensee whenever the Director has reason to believe that:

(1) The licensee has willfully violated any provision of the Act or this part and ATF intends to revoke the license;

(2) The licensee does not have secure gun storage or safety devices available at any place in which firearms are sold under the license to persons who are not licensees and ATF intends to revoke the license (except in any case in which a secure gun storage or safety device is temporarily unavailable because of theft, casualty loss, consumer sales, backorders from a manufacturer, or any other similar reason beyond the control of the licensee);

(3) The licensee has knowingly transferred a firearm to an unlicensed person and knowingly failed to comply with the requirements of 18 U.S.C. 922(t)(1) with respect to the transfer and, at the time that the transferee most recently proposed the transfer, the national instant criminal background check system was operating and information was available to the system demonstrating that transfer to the transferee or their receipt of a firearm would violate 18 U.S.C. 922(d), 922(g), or 922(n) (as applicable), or state, local, or tribal law, and ATF intends to revoke or suspend the license or impose a civil fine, pursuant to 18 U.S.C. 922(t)(5) and 18 U.S.C. 924(p); or

ant criminal background check system was operating and information was available to the system demonstrating that transfer to the transferee or their receipt of a firearm would violate 18 U.S.C. 922(d), 922(g), or 922(n) (as applicable), or state, local, or tribal law, and ATF intends to revoke or suspend the license or impose a civil fine, pursuant to 18 U.S.C. 922(t)(5) and 18 U.S.C. 924(p); or

(4) The licensee has violated 18 U.S.C. 922(z)(1) by selling, delivering, or transferring any handgun to any person other than a licensee, unless the transferee was provided with a secure gun storage or safety device for that handgun, and ATF intends to revoke or suspend the license or impose a civil fine, pursuant to 18 U.S.C. 922(t)(5) and 18 U.S.C. 924(p).

(b) Issuing the notice. The notice must set forth the matters of fact constituting the violations specified, dates, places, and the sections of law and regulations violated. The Director must afford the licensee 15 days from the date the licensee receives the notice to request a hearing before ATF suspends or revokes the license, or imposes a civil fine. If the licensee does not file a timely request for a hearing, the Director will issue a final notice suspending or revoking the license or imposing a civil fine on ATF Form 5300.13, as provided in § 478.74.

(c) Definition of willfully. For purposes of this section, “willfully” means that the person intends to engage in conduct that the law forbids and acts with actual knowledge that the person's conduct is unlawful.

(1) Failing to prevent a violation from recurring. Evidence of repeated violations with knowledge of the law's requirements may be sufficient to establish willfulness. However, in every case, the totality of the circumstances must be considered to determine willfulness, including the nature of the repeated violations and whether they resulted from inadvertent error.

erson's conduct is unlawful.

(1) Failing to prevent a violation from recurring. Evidence of repeated violations with knowledge of the law's requirements may be sufficient to establish willfulness. However, in every case, the totality of the circumstances must be considered to determine willfulness, including the nature of the repeated violations and whether they resulted from inadvertent error.

(2) Willful blindness. Persons are deemed to act willfully if they take deliberate actions to avoid learning that they are violating a law or regulation. Willful blindness will also satisfy the actual knowledge requirement in paragraphs (1) and (3) of this definition.

(3) Person with supervisory authority. A licensee or responsible person (who was not a principal in or an accessory to committing a violation) is deemed to act willfully based on conduct by the person's employee if, and only if, the licensee or responsible person has actual knowledge that the employee has violated a law or regulation and ratifies the violation by doing any of the following—

(i) Failing to take action to cure the violation, if the violation is susceptible of being cured;

(ii) Concealing the violation; or

(iii) Failing to take appropriate remedial or disciplinary action against the employee who committed the violation.

Robert Cekada, Director.

[FR Doc. 2026-09159 Filed 5-7-26; 8:45 am] BILLING CODE 4410-FY-P