    [Weekly Compilation of Presidential Documents Volume 29, Number 32 (Monday, August 16, 1993)]
    [Pages 1605-1607]
    [Online from the Government Publishing Office, www.gpo.gov]

    <R04>
    Memorandum on Gun Dealer Licensing

     August 11, 1993

    Memorandum for the Secretary of the Treasury

    Subject: Gun Dealer Licensing

        A major problem facing the Nation today is the ease with which
    criminals, the mentally deranged, and even children can acquire
    firearms. The gruesome consequences of this ready availability of guns
    is found in the senseless violence occurring throughout the country with
    numbing regularity. While there is not one solution to the plague of
    gun-related violence, there is more than suf-

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    ficient evidence indicating that a major part of the problem involves
    the present system of gun dealer licensing, which encourages a
    flourishing criminal market in guns.
        The Gun Control Act of 1968 established a licensing system for
    persons engaged in businesses of manufacturing, importing, and dealing
    in firearms. These licensees are allowed to ship firearms in interstate
    commerce among themselves, and are required to abide by State laws and
    local ordinances in their sale of firearms to non-licensees. They are
    also prohibited from selling firearms to felons, certain other classes
    of persons, and generally to out of state persons. This Act also
    established a comprehensive record-keeping system and authorized the
    Secretary to conduct inspections to ensure compliance with the Act. The
    statutory qualifications for a licensee are that the applicant is at
    least 21 years of age, is not a felon or other person prohibited from
    possessing firearms, has not willfully violated the Gun Control Act, and
    has premises from which he intends to conduct business. The license fee
    for a basic dealer's license is only $10 a year.
        The minimal qualification standards of the statute, coupled with
    policies of neglect and opposition to legitimate regulatory efforts by
    past Administrations, leave us with a situation where in some ways we
    have made it easier to get a license to sell guns than it is to get and
    keep a driver's license. Today there are in excess of 287,000 Federal
    firearms licensees, and a great number of these persons probably should
    not be licensed. The Bureau of Alcohol, Tobacco and Firearms (ATF)
    estimates that only about 30 percent of these are bona fide storefront
    gun dealers. ATF estimates that probably 40 percent of the licensees
    conduct no business at all, and are simply persons who use the license
    to obtain the benefits of trading interstate and buying guns at
    wholesale. The remaining 30 percent of licensees engage in a limited
    level of business, typically out of private residences. While the
    Federal statute creates no minimum level of business activity to qualify
    for a license, many of the licensees in this category operate in
    violation of State and local licensing, taxing, and other business-
    related laws. Since the overall purpose of the Gun Control Act was to
    assist State and local gun control efforts, at the very least we need to
    coordinate the Federal licensing process with the appropriate State and
    local agencies.

        This Administration is committed to doing more to prevent this
    criminal market in illegal guns from continuing to flourish. Since all
    new firearms used in crime have at some point passed through the
    legitimate distribution system, Federal firearms licenses represent the
    first line of defense in our efforts to keep guns out of the hands of
    criminals.

        Accordingly, you have informed me that you will direct the
    Department of the Treasury and ATF to take whatever steps are necessary,
    to the extent permitted by law, to ensure compliance with present
    licensing requirements, such as:

        (a) improving the thoroughness and effectiveness of background
    checks in screening dealer license applicants;

        (b) revising the application process to require the applicant to
    supply all information relevant to establishing qualification for a
    license, and to require more reliable forms of identification of the
    applicant, such as fingerprinting, to assist in identifying an
    applicant's criminal or other disqualifying history;

        (c) making the ``premises'' requirement of the statute more
    meaningful by increasing field checks and the use of other procedures to
    verify compliance;

        (d) increasing the scrutiny of licensees' multiple handgun sales
    reports and providing automated access to multiple sales report
    information by serial number for firearms trace purposes;

        (e) requiring dealers to obtain more reliable identification from
    purchasers;

        (f) reviewing sanctioning policies to determine the feasibility and
    desirability of adding the option of license suspension for certain
    violations;

        (g) expanding the use of cooperative agreements with State and local
    law enforcement agencies to address licensing and trafficking problems;

        (h) expanding ATF's capabilities to utilize effectively the firearms
    transaction records of out-of-business licensees for tracing purposes
    through the use of automation and other technology.

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        Acting pursuant to your statutory authority, you shall make such
    determinations and issue orders, regulations and rulings, as
    appropriate, to achieve the objectives stated in this memorandum.
        I further direct that you initiate these actions as soon as possible
    and report your progress implementing these and other measures
    consistent with the foregoing to me within 90 days and annually
    thereafter.
        All Executive agencies shall, to the extent permitted by law,
    cooperate with and assist you in carrying out the objectives of this
    memorandum. You shall consult with the Attorney General, the Director of
    National Drug Control Policy, and other Executive agencies as necessary
    to coordinate and implement the objective of this memorandum. To the
    maximum extent possible, the Attorney General, through the Office of
    Justice Programs, Bureau of Justice Assistance, will expand support to
    State and local agencies working with ATF on joint projects relating to
    licensing and trafficking in firearms. Nothing in this memorandum shall
    be construed to require actions contrary to applicable provisions of the
    law. You are hereby authorized and directed to publish this memorandum
    in the Federal Register.
                                                William J. Clinton