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See the related 2009 letter contradicting this one here.

DEPARTMENT OF THE TREASURY
Bureau of Alcohol, Tobacco and Firearms
Washington, D.C. 20226

MAR 22, 1994

LE:F:FE:RLB
3312.5

Mr XXX
Address
City, State

Dear Mr. XXX:

This refers to your letter of February 28, 1994, in which you
inquire as to whether the making of certain National Firearm Act
(NFA) weapons is prohibited by Title 18 United States Code
(U.S.C.), Chapter 44, Section 922(r). The weapon in question is a
FN/FAL type firearm having a barrel length of less than 16 inches
which is assembled from an imported British L1A1 parts kit and a
domestically manufactured frame or receiver.

Title 18 U.S.C., Chapter 44, Section 922(r) provides that it shall
be unlawful for any person to assemble from imported parts any
semiautomatic rifle or shotgun which is identical to any rifle or
shotgun prohibited from importation under 18 U.S.C., Chapter 44,
Section 925(d)(3), as not being particularly suitable for or
readily adaptable to sporting purposes.

However, the Bureau has previously determined that the lawful
making of an NFA weapon would not violate Section 922(r), since the
section only addresses the assembly of "nonsporting" firearms, and
not the making of NFA weapons. Therefore, the lawful making of a
short barreled rifle would not be precluded by Section 922(r).

If you decide to proceed with your project, it will be necessary
for you to obtain prior approval by first submitting an ATF Form 1
(Application To Make and Register a Firearm) and paying the
appropriate $200 making tax. Additional information relative to
this procedure may be obtained from the following source:

Bureau of Alcohol, Tobacco and Firearms
NFA Branch, Room 5300
650 Massachusetts Avenue, NW
Washington DC 20026

We trust that the foregoing was responsive to your inquiry. If we
may be of any further assistance, please contact us.

Sincerely yours,
[signed]
Edward M. Owen, Jr.
Chief, Firearms Technology Branch