“We’re not an FFL, but we’ll take them to our facility.”
“We have a nearby FFL who will be at the auction to secure the firearms.”
“He’ll perform background checks, and then distribute all firearms from his licensed premises nearby.”
As most in the auction business have heard, this is a very common workaround for auctioneers who are not Federal Firearms Licensees (FFL) but still take in guns to sell at auction.
And per the ATF, it’s a problem — a big problem.
If an auctioneer is “taking possession” of guns and/or conducting a “consignment auction” then that auctioneer is acting as a firearms dealer — and needs to be an FFL.
In our example above, utilizing another FFL (instead of being licensed) is not an option. That’s because the auctioneer is not the owner of the firearms but is providing possession to the licensed dealer.
The dealer in our example would properly note that the gun came from the auctioneer and is to be distributed to the buyer at auction.
Therefore if a crime was committed with that gun, and the firearm transfer was traced to this FFL, the gun would show obtained from the auctioneer.
The question then would be, “How did the auctioneer gain possession?” If the answer was, “I merely took the gun in on consignment from …” there begins the problems.
And these further problems include that the ATF notes that a licensee who facilitates an auctioneer committing this type of crime is also subject to prosecution.
Could an auctioneer have the FFL note (falsely) that the firearms came from the consignor directly to the FFL? Could the FFL be present at the auctioneer’s location to take possession up-front? Many with the ATF consider both these scenarios troubling in that the FFL is enabling the auctioneer to engage in the business without being an FFL — a violation.
We’ve written extensively about selling guns at auction. Most notably here: https://mikebrandlyauctioneer.wordpress.com/2010/01/17/a-guide-for-auctioneers-selling-guns/
In the above treatise, we note that the exemption to licensing is the “estate-type” (onsite-type) auction where the owner maintains possession and no other guns are consigned. Further, non-dealers cannot hold themselves out as dealers, buy and sell firearms as a business, repeatedly assist the same seller with the sale of their guns, etc.
Auctioneers have choices. Sell firearms without an FFL at single-seller onsite auctions without taking possession or securing an FFL and then be able to take possession and otherwise engage in the business of selling firearms.
Trying to find other so-called solutions is not prudent.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. He serves as Adjunct Faculty at Hondros College of Business, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.