27 Cfr 555.105

[Code of Federal Regulations]
[Title 27, Volume 2]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 27CFR555.105]

[Page 183-186]

TITLE 27--ALCOHOL, TOBACCO PRODUCTS AND FIREARMS

CHAPTER II--BUREAU OF ALCOHOL, TOBACCO, FIREARMS, AND EXPLOSIVES,
DEPARTMENT OF JUSTICE

PART 555_COMMERCE IN EXPLOSIVES--Table of Contents

Subpart F_Conduct of Business or Operations

Sec. 555.105 Distributions to nonlicensees, nonpermittees, and limited
permittees.

(a) Distributions to nonlicensees and nonpermittees prior to May 24,
2003. (1) This section will apply in any case where distribution of
explosive materials to the distributee is not otherwise prohibited by
the Act or this part.
(2) Except as provided in paragraph (a)(3) of this section, a
licensed importer, licensed manufacturer, or licensed dealer may
distribute explosive materials to a nonlicensee or nonpermittee if the
nonlicensee or nonpermittee is a resident of the same State in which the
licensee's business premises are located, and the nonlicensee or
nonpermittee furnishes to the licensee the explosives transaction
record, ATF F 5400.4, required by Sec. 555.126. Disposition of ATF F
5400.4 will be made in accordance with Sec. 555.126.

[[Page 184]]

(3) A licensed importer, licensed manufacturer, or licensed dealer
may sell or distribute explosive materials to a resident of a State
contiguous to the State in which the licensee's place of business is
located if the purchaser's State of residence has enacted legislation,
currently in force, specifically authorizing a resident of that State to
purchase explosive materials in a contiguous State and the purchaser and
the licensee have, prior to the distribution of the explosive materials,
complied with all the requirements of paragraphs (a)(2), (a)(5), and
(a)(6) of this section applicable to intrastate transactions occurring
on the licensee's business premises.
(4) A permittee may dispose of surplus stocks of explosive materials
to a nonlicensee or nonpermittee if the nonlicensee or nonpermittee is a
resident of the same State in which the permittee's business premises or
operations are located, or is a resident of a State contiguous to the
State in which the permittee's place of business or operations are
located, and if the requirements of paragraphs (a)(2), (a)(3), (a)(5),
and (a)(6) of this section are fully met.
(5) A licensed importer, licensed manufacturer, or licensed dealer
selling or otherwise distributing explosive materials to a business
entity must verify the identity of the representative or agent of the
business entity who is authorized to order explosive materials on behalf
of the business entity. Each business entity ordering explosive
materials must furnish the distributing licensee prior to or with the
first order of explosive materials a current certified list of the names
of representatives or agents authorized to order explosive materials on
behalf of the business entity. The business entity ordering explosive
materials is responsible for keeping the certified list current. A
licensee may not distribute explosive materials to a business entity on
the order of a person whose name does not appear on the certified list.
(6) Where the possession of explosive materials is transferred at
the distributor's premises, the distributor must in all instances verify
the identity of the person accepting possession on behalf of the
distributee before relinquishing possession. Before the delivery at the
distributor's premises of explosive materials to an employee of a
nonlicensee or nonpermittee, or to an employee of a common or contract
carrier transporting explosive materials to a nonlicensee or
nonpermittee, the distributor delivering explosive materials must obtain
an executed ATF F 5400.8 from the employee before releasing the
explosive materials. The ATF F 5400.8 must contain all of the
information required on the form and by this part. (See examples in
Sec. 555.103(a)).
(7) A licensee or permittee disposing of surplus stock may sell or
distribute commercially manufactured black powder in quantities of 50
pounds or less to a nonlicensee or nonpermittee if the black powder is
intended to be used solely for sporting, recreational, or cultural
purposes in antique firearms as defined in 18 U.S.C. 921(a)(16), or in
antique devices as exempted from the term ``destructive device'' in 18
U.S.C. 921(a)(4).
(b) Distributions to holders of limited permits on and after May 24,
2003. (1) This section will apply in any case where distribution of
explosive materials to the distributee is not otherwise prohibited by
the Act or this part.
(2) A licensed importer, licensed manufacturer or a licensed dealer
may distribute explosive materials to a holder of a limited permit if
such permittee is a resident of the same State in which the licensee's
business premises are located, the holder of the limited permit presents
in person or by mail ATF Form 5400.4, Limited Permittee Transaction
Report (LPTR), and the licensee completes Form 5400.4 in accordance with
Sec. 555.126(b). In no event will a licensee distribute explosive
materials to a holder of a limited permit unless the holder presents a
Form 5400.4 with an original unaltered and unexpired Intrastate Purchase
of Explosives Coupon (IPEC), ATF Form 5400.30, affixed. The coupon must
bear the name, address, permit number, and the coupon number of the
limited permittee seeking distribution of the explosives.
(3) A holder of a limited permit is authorized to receive explosive
materials from a licensee or permittee whose premises are located in the
same State of residence in which the premises of

[[Page 185]]

the holder of the limited permit are located on no more than 6 separate
occasions during the one-year period of the permit. For purposes of this
section, the term ``6 separate occasions'' means six deliveries of
explosive materials. Each delivery must--
(i) Relate to a single purchase transaction made on one ATF F
5400.4;
(ii) Be referenced on one commercial invoice or purchase order; and
(iii) Be delivered to the holder of the limited permit in one
shipment delivered at the same time.
(4) A holder of a user permit may dispose of surplus stocks of
explosive materials to a licensee or holder of a user permit, or a
holder of a limited permit who is a resident of the same State in which
the premises of the holder of the user permit are located. A holder of a
limited permit may dispose of surplus stocks of explosive materials to
another holder of a limited permit who is a resident of the same State
in which the premises of the distributor are located, if the transaction
complies with the requirements of paragraph (b)(2) of this section and
Sec. 555.126(b). A holder of a limited permit may also dispose of
surplus stocks of explosive materials to a licensee or holder of a user
permit if the disposition occurs in the State of residence of the holder
of the limited permit. (See Sec. 555.103.)
(5) Each holder of a limited permit ordering explosive materials
must furnish the distributing licensee prior to or with the first order
of the explosive materials a current list of the names of employees
authorized to accept delivery of explosive materials on behalf of the
limited permittee. The distributee ordering explosive materials must
keep the list current and provide updated lists to licensees and holders
of user permits on a timely basis. A licensed importer, licensed
manufacturer, licensed dealer, or permittee, selling or otherwise
distributing explosive materials to a holder of a limited permit must,
prior to delivering the explosive materials, obtain from the limited
permittee a current list of persons who are authorized to accept
deliveries of explosive materials on behalf of the limited permittee. A
licensee or permittee may not deliver explosive materials to a person
whose name does not appear on the list.
(6)(i) Delivery at the distributor's premises. Where possession of
explosive materials is transferred directly to the distributee at the
distributor's premises, the distributor must obtain an executed Form
5400.4 in accordance with Sec. 555.126(b) and must in all instances
verify the identity of the person accepting possession on behalf of the
distributee by examining an identification document (as defined in Sec.
555.11) before relinquishing possession.
(ii) Delivery by distributor. Where possession of explosive
materials is transferred by the distributor to the distributee away from
the distributor's premises, the distributor must obtain an executed Form
5400.4 in accordance with Sec. 555.126(b) and must in all instances
verify the identity of the person accepting possession on behalf of the
distributee by examining an identification document (as defined in Sec.
555.11) before relinquishing possession.
(iii) Delivery by common or contract carrier hired by the
distributor. Where a common or contract carrier hired by the distributor
will transport explosive materials from the distributor to a holder of a
limited permit:
(A) The limited permittee must, prior to delivery of the explosive
materials, complete the appropriate section on Form 5400.4, affix to the
Form 5400.4 one of the six IPECs he has been issued, and provide the
form to the distributor in person or by mail.
(B) The distributor must, before relinquishing possession of the
explosive materials to the common or contract carrier:
(1) Verify the identity of the person accepting possession for the
common or contract carrier by examining such person's valid, unexpired
driver's license issued by any State, Canada, or Mexico; and
(2) Record the name of the common or contract carrier (i.e., the
name of the driver's employer) and the full name of the driver. This
information must be maintained in the distributor's permanent records in
accordance with Sec. 555.121.

[[Page 186]]

(C) At the time of delivery of the explosive materials, the common
or contract carrier, as agent for the distributor, must verify the
identity of the person accepting delivery on behalf of the distributee,
note the type and number of the identification document (as defined in
Sec. 555.11) and provide this information to the distributor. The
distributor must enter this information in the appropriate section on
Form 5400.4.
(iv) Delivery by common or contract carrier hired by the
distributee. Where a common or contract carrier hired by the distributee
will transport explosive materials from the distributor to a holder of a
limited permit:
(A) The limited permittee must, prior to delivery of the explosive
materials, complete the appropriate section on Form 5400.4, affix to the
Form 5400.4 one of the six IPECs he has been issued, and provide the
form to the distributor in person or by mail.
(B) Before the delivery at the distributor's premises to the common
or contract carrier who will transport explosive materials to the holder
of a limited permit, the distributor must:
(1) Verify the identity of the person accepting possession for the
common or contract carrier by examining such person's valid, unexpired
driver's license issued by any State, Canada, or Mexico; and
(2) Record the name of the common or contract carrier (i.e., the
name of the driver's employer) and the full name of the driver. This
information must be maintained in the distributor's permanent records in
accordance with Sec. 555.121.
(7) A licensee or permittee disposing of surplus stock may sell or
distribute commercially manufactured black powder in quantities of 50
pounds or less to a holder of a limited permit, nonlicensee, or
nonpermittee if the black powder is intended to be used solely for
sporting, recreational, or cultural purposes in antique firearms as
defined in 18 U.S.C. 921(a)(16), or in antique devices as exempted from
the term ``destructive device'' in 18 U.S.C. 921(a)(4).

(Approved by the Office of Management and Budget under control number
1140-0075)

[ATF No. 1, 68 FR 13788, Mar. 20, 2003, as amended by ATF No. 2, 68 FR
53513, Sept. 11, 2003]