Legal Compliance & Documentation Standards Flashcards
7 cards from real CFA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Legal Compliance & Documentation Standards flashcards as text
Which federal agency administers the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR) that affect international firearm appraisals?
Answer: U.S. Department of State, Directorate of Defense Trade Controls (DDTC)
The State Department's DDTC administers ITAR, which controls the export and import of defense articles including most firearms on the U.S. Munitions List.
A client submits a firearm for appraisal claiming it is a 'parts kit build' assembled from a demilitarized foreign weapon. What documentation gap most directly raises a compliance concern?
Answer: Lack of proof that the receiver was manufactured domestically or imported as a completed firearm through proper channels
Parts kit builds require a U.S.-made or properly imported receiver; without documentation showing lawful receiver origin, the firearm may have been assembled in violation of GCA importation and manufacturing rules.
Which of the following triggers a Multiple Sales Report (MSR) requirement under federal law?
Answer: A dealer selling two or more handguns to the same unlicensed person within five consecutive business days
Under 18 U.S.C. § 923(g)(3), FFLs must report the sale of two or more handguns to the same unlicensed buyer within five consecutive business days to the ATF and local law enforcement.
When preparing appraisal documentation for a firearm that is part of a revocable living trust, which document most clearly establishes the trust as a lawful NFA item holder?
Answer: The ATF-approved Form 4 or Form 1 listing the trust as the registered owner
Since ATF 41F (effective July 2016), trusts may hold NFA items, but the controlling document proving lawful ownership is the ATF-approved registration form (Form 4 or Form 1) naming the trust.
An appraiser is asked to value a firearm described as a 'pre-86 dealer sample' machine gun. Who may legally own a pre-86 dealer sample?
Answer: Only current SOT (Special Occupational Taxpayer) licensees for demonstration to government agencies
Pre-1986 dealer sample machine guns may only be possessed by active SOT holders (FFLs paying the SOT) for demonstration to qualified buyers such as law enforcement and government entities.
Which condition would render a historical military surplus rifle exempt from the GCA's importation 'sporting purposes' test?
Answer: The rifle qualifies as a Curio and Relic (C&R) under ATF's published C&R list or meets the 50-year rule
ATF's C&R classification (27 CFR § 478.11) exempts qualifying firearms from the sporting purposes importation test, allowing import of historically significant military rifles that would otherwise fail the test.
A prospective seller brings a firearm with documentation showing it was previously reported stolen and later recovered. What is the appraiser's primary compliance obligation before proceeding?
Answer: Verify with law enforcement that the firearm's stolen status has been officially cleared in NCIC before conducting the appraisal
A firearm still listed as stolen in NCIC cannot be lawfully possessed; the appraiser must confirm the record has been cleared before proceeding to avoid potential complicity in receiving stolen property.