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ATF Reclassifies Wetted Nitrocellulose as Highly Explosive Material-Outdated!

ATF Reclassifies Wetted Nitrocellulose as Highly Explosive Material-Outdated!

Summary of eRumor: 
Under direction from President Obama, the ATF has reclassified Wetted nitrocellulose as “highly explosive material” under federal laws, a move that will have a huge impact on the gun ammo industry.
The Truth:
The ATF announced that it would reclassify has wetted nitrocellulose as highly explosive material under federal law — but the agency backtracked after receiving input from industry groups.
Federal explosives laws regulate the sale of “explosive materials” like explosive chemical mixtures, blasting agents and detonators. However, federal law has exempts “small arms ammunition and components thereof.”
The controversy started in June 2013 when the ATF stated in a newsletter that the small arms exemption for nitrocellulose under federal explosives laws should only extend to small arms ammunition that is small than .50 caliber:

In general, firearms ammunition is an “explosive” because it typically contains smokeless powder and other explosive materials. However, 18 U.S.C. §845 generally exempts small arms ammunition and components thereof from the provisions of 18 U.S.C., Chapter 40. ATF has long held that the term “small arms ammunition” pertains to .50 caliber or smaller rifle or handgun ammunition, as well as certain shotgun ammunition. Further, under 27 CFR 555.11, ATF has defined “ammunition” in part, as “small arms ammunition or cartridge cases, primers, bullets, or smokeless propellants designed for use in small arms…” Accordingly, .50 caliber or smaller rifle ammunition containing only smokeless powder, primers, and other items specifically listed as components of small arms ammunition, is exempt from the Federal explosives laws and regulations.

Then, in a newsletter released in June 2016, the ATF stated that it had recently fielded questions about the status of nitrocellulose under federal explosives laws and regulations, and it explained:

“Nitrocellulose explosive” is on ATF’s List of Explosive Materials. ATF has determined that nitrocellulose containing greater than 12.6 percent nitrogen is a high explosive under 27 CFR, Part 555 (nitrocellulose containing 12.6 percent or less nitrogen is generally not an explosive material under Part 555). Therefore, it must be stored in a type 1 or type 2 magazine. We are aware that the U.S. Department of Transportation may assign a nonexplosive classification to nitrocellulose when it has been wetted with water or alcohol. This is based, in part, on the diminished likelihood of explosion in a transportation accident. Because the nitrocellulose retains its explosive characteristics when the water or alcohol is removed, the wetted nitrocellulose remains a nitrocellulose explosive, subject to the licensing, safety and security requirements of the Federal explosives regulations. However, based upon the diminished likelihood of wetted nitrocellulose exploding, ATF will consider variance requests to store the wetted material under an alternative arrangement.

The blog site Ammo Land explains what the impact of ATF’s classification of nitrocellulose as highly explosive would have had on the gun industry as such:

Manufacturers and importers of smokeless propellant have relied on ATF private letter rulings issued prior to 2016 stating that nitrocellulose wetted with water not less than 25 percent by mass is not subject to regulation under the federal explosives laws. Accordingly, the manufacturers have set up their logistics, storage and operations consistent with nitrocellulose not being regulated as an explosive. Manufacturers and importers may not have adequate storage facilities or record keeping systems to comply with the law. Licensed manufacturers also rely on private, unlicensed vendors to store wetted nitrocellulose in facilities that do not comply with storage requirements. A number of manufacturers also report an adverse impact on their contracts to supply smokeless propellant and finished rounds of ammunition to the Department of Defense

The ATF’s announcement sparked concerns that the price of ammo would skyrocket as manufacturers scramble to comply with new storage and transport regulations for nitrocellulose, or that availability of ammo would plummet. Some called the move “a backdoor ammo ban” by the Obama administration.
Amid the backlash, the ATF announced on August 31st that it had rescinded its reclassification of nitrocellulose after hearing concerns from those in the gun industry, according to an addendum:

ATF’s June 2016 Explosives Industry Newsletter included a brief discussion of Nitrocellulose, and attempted to clarify the circumstances under which wetted Nitrocellulose is considered a high explosive under 27 CFR, Part 555. As with all explosives, ATF’s focus is on the potential public safety risks associated with materials that can be misused or diverted to unlawful purposes. Subsequent contact from industry members who import, transport, store or employ wetted Nitrocellulose in the production of ammunition, however, has brought to our attention issues that were not fully addressed in the Newsletter and require further consultation and consideration with the industry. Accordingly, ATF has and will conduct further industry outreach concerning wetted Nitrocellulose. In the interim, previously authorized industry practices concerning wetted Nitrocellulose will not be affected.

It’s not clear whether the ATF will continue to pursue new regulations on the use of nitrocellulose in making gun ammo. For now, at least, the effort is on hold.