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Title 27: Alcohol, Tobacco and Firearms
PART
555—COMMERCE IN EXPLOSIVES
Subpart
F—Conduct of Business or Operations

§ 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 § 555.126. Disposition of ATF F 5400.4 will be made in
accordance with § 555.126.

(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
§ 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
§ 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 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
§ 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
§ 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 § 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 § 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 § 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 § 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 § 555.121.

(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
§ 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 § 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]

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