[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- 

[[Page 1606]]

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