Policy on firearms and ammunition dealership

Legal basis and referenced rules

The circular anchors its policy on Presidential Decree 1866 dated 29 June 1983, as amended by Republic Act No. 8294 dated 06 July 1996.
The circular cites Executive Order No. 256 dated 21 December 1995 for revising fees and charges on firearms, ammunition, spare parts, accessories, components, explosives, explosives ingredients, pyrotechnic devices, and related items.
The circular references Section 878, RAC on Unlawful Manufacture. Dealing In, Acquisition. Disposition, or Possession of Firearms, or Ammunition Therefore, or Instrument Used or Intended to be Used in the Manufacture of Firearms and Ammunition.
The circular cites Memorandum Circular No. 03-2006 dated March 08, 2006 on export of defense/military items and commercial firearms, ammunition, and explosives.
The circular cites HPC Circular No. 2 dated 11 September 1990 on Annual Verification of Firearms.
The circular references HPC SOP No. 4 dated Nov. 02, 1972 on Safe of Firearms to Police Forces & Security Agencies.
The circular cites Memorandum Circular 99-009 dated March 16, 1999 as the prior policy on firearms and ammunition dealership.

Policy intent and purpose declared

The circular corrects an operational gap where a main license to operate expires or ceases while a branch license remains valid.
The circular reduces the volume of new applications and renewals of licenses to operate firearms-related dealerships, repair, and inventor licensing, and related matters.
The circular prescribes procedures for issuance of new licenses and authorities it identifies and for renewal of those licenses and authorities.
The circular provides general provisions governing control on the sales of firearms, ammunition, spare parts, and other related matters.
The procedures established also govern renewal of licenses and authorities granted under the circular.

Core definitions and covered activities

A “License to Deal” authorizes purchase, sale, and general business in handling firearms and ammunition, firearms spare parts and accessories, airguns, airsofts, reloading machine and components, and bullet-proof vest.
A “License to Repair” authorizes repair of defective firearms to restore original composition or enhance/upgrade firearms.
An “Indent License to Deal” authorizes importation and sales of firearms, ammunition, spare parts, etc., for the AFP, PNP, and other government entities.
An “Authority to Import” is an official document authorizing importation of firearms, ammunition, spare parts, accessories, raw materials, etc.
An “Authority to Export” is an official document authorizing exportation of firearms, ammunition, spare parts, accessories, raw materials, etc.
“Accessories” are optional firearm parts that enhance or increase operational efficiency or accuracy.
“Refurbishment/refurbish” is the process by which a licensed gun repair shop or manufacturer restores original firearm features.
“Major Firearms Parts” means frame, slide and barrel.
A “Conversion Kit” is the upper assembly by pistol used to change firearm caliber to another (including barrel, slide, firing pin spring, extractor, and firing pin block).
“Bodega Transfer” is transfer of firearms from one dealer to another inside the FED Bodega.
An “Authority to Display” is an official document issued to legitimate dealers authorizing them to display firearms for commercial purposes.
A “Mother License” is the main license issued to a dealer to operate a primary store.
A “Branch License” is the license issued to a dealer operating at a different address from the mother license.

Licensing validity, application processing, and branches

All licenses to operate—for new applications or renewal—are valid for five (5) years.
Renewal must be filed at Headquarters FED-CSG, Camp Crarne, Quezon City not later than ninety (90) days before expiration of the LTO, regardless of the place of business.
Upon expiration of the LTO, the dealer/indentor/gun repair shop must automatically stop its operation.
If renewal is duly filed prior to expiration, the licensee may request a certification from FED-CSG that the application is on process.
The certification is valid for thirty (30) days only and can be renewed whenever necessary.
Applications covered by the policy are grouped and combined according to business activity into:
- Group I: License to Operate Dealership for (a) Firearms and Ammunition; (b) Firearm spare parts & accessories; (c) Air gun; (d) Ammunition Reloading Components; (e) Bullet Proof Vests (Level I, II, and III only); (f) Bomb Suit/Bomb Blanket; (g) Airsoft Rifle/Pistol.
- Group II: License to Operate Gun Repair Shop.
- Group III: License to Operate as Indentor.
A new applicant seeking several licenses with the same business activity for mother license is processed as one and receives only one (1) license to operate indicating the type of business applied, subject to approval of the Chief.
The LTO issued authorizes business only in the address indicated in the license.
License fees are collected depending on the number of business activities applied in accordance with Executive Order No. 256.
If the LTO was previously approved/issued by the Chief, PNP, succeeding renewal is issued at the level of D, CSG, unless amendments/changes require approval of C, PNP.
A new branch store is approved by D, CSG.
Succeeding renewal of branch license is approved at the level of Cr FED, unless changes require approval of D, CSG anew.
The circular sets a branch effectivity alignment: the effectivity date of new branch licenses becomes the same as the mother license, effective ninety (90) days upon approval of the circular.
No firm is allowed to operate a new branch store without the mother license.
Renewal fee computation is done proportionately in accordance with Executive Order No. 256.
No branch is allowed to import other than that of the main license; only the store with the mother license is allowed to import.

Documentary requirements for licensing (dealers/repair/indentors)

For License to Operate dealership applications (new and renewal), documentary requirements are required as follows.
For NEW dealership application, the applicant submits in three (3) copies each:
- A location plan for the proposed gun store or repair shop showing distance from the nearest Police Headquarters (in meters).
- A sketch of firearms and ammunition vault showing inside dimension, construction materials, and type of door/locking device.
- Copy of Business Registration with Securities and Exchange Commission (Articles of Incorporation and By-Laws) and/or Department of Trade and Industry.
- Clearances of the Manager/Proprietor/Person who will manage the dealership or perform repair from the city/municipal mayor, Metropolitan/Municipal Chief of Police in place of residence, and NBI Clearance, and DI clearance or RIID clearance for provincial applicants.
- Accomplished Application for License deal in Firearms and Ammunition (Form 1).
The applicant submits a basic letter addressed to the Chief, PNP (thru: Channels) requesting issuance of License to Deal in Firearms and Ammunition/Gun Repair, stating at least:
- A certification or affidavit of the Corporate Treasurer and bank statement showing Paid-up capital stock of P500,000.00 as proof of capitalization; a sole proprietorship submits a bank certification showing a deposit of at least P500,000.00 in the name of the store.
- The location of the gun store/gun repair and confirmation it is properly constructed of strong materials and safely located, with burglar and fire proof vault adequate to safely accommodate the quantity applied for.
- Name of the proprietor/manager and qualifications; certification from the licensee that the gunsmith to be employed has technical know-how and sufficient experience in repair jobs.
- Pictures during ocular inspection showing: exterior view, interior view, display cabinet/counters, vault, and equipment/machines used if any.
- Certification from Provincial Director/City Director that the store/repair shop is secured and safe from insurgents and other lawless elements.
- Tax Identification Number, Revenue Regulations No. 11-99, and other information justifying the application, with Order of Payment and Special Bank Receipt (SBR) for License Fee and Surety Bond.
All papers for dealership license applications are submitted to the Police Provincial City Director for inspection, comment, and recommendation.
If the gun store/gun shop is in Metropolitan Manila, the application is submitted to the Chief, FED, Camp Crame, Quezon City.
The Provincial/City Director, through their FESAGS of the Police Provincial Offices, forwards the application to the Chief, FED, who processes it and forwards it to the C, PNP (thru: channels) pursuant to PNP Memo Cir No. 99-009 dated 16 March 1999.
If approved by C, PNP, the License to Deal in Firearms and Ammunition / License to Repair is issued by C, FED after submission of the Dealer’s Bond.
Indentor applicants and those for PNP/AFP/government entities for commercial purposes disregard certain documentary requirements listed for the dealer application (specifically paragraph 1 a and 1 b, and the listed items under paragraph 2 including 2a, 2b, 2c, 2e and 2f).
For RENEWAL, the applicant submits:
- Letter Request
- Xerox copy of the old LTO
- Mayor’s Permit
- Original Directorate for Intelligence (DI) Clearance or Regional Intelligence and Investigation Division (RIID) Clearance for provincial applicants, and NBI Clearance
- DTI/SEC Registration (with Articles of Incorporation and By-Laws)
- Special Bank Receipt (SBR) – Dealer’s Fee
- Dealer’s Firearms Bond
- Summary of Transaction (24 months) including List of Individuals to whom fire arms were sold
- Pictures during ocular inspection showing exterior view, interior view, display cabinet/counters, vault, and equipment/machines use if any
- Letter of Justification for Late Filing
- TIN Revenue Reg No. 11-99
- Inspection Report conducted by Inspectorate & Investigation Branch, FED
- For provincial applicants: certification from the Provincial/City Director that the place is Safe & Secured from Insurgents, ocular inspection report by said PPD, and endorsement from the PD/City Director.
Renewal is conditioned by storage fee: renewal of a License to Deal for any gun dealer with rented space for storage at FED-CSG requires first payment of the corresponding storage fee before the renewal process.

Importation rules for licensed dealers

A licensed dealer may import firearms and ammunition and raw materials for manufacturing, based on the highest yearly importation made during the past three (3) calendar years, minus current stock on hand, following a 70% and 30% ratio for low-powered and high-powered handgun respectively based on present quantity reflected in the approved LTO and/or Import Authority.
The number of firearms/ammunition/etc. applied in the Import Authority is applied not exceeding quantities approved in the license, including actual stock on hand when the application was filed.
Upon arrival and payment of taxes due on imported articles with Bureau of Customs, imported firearms and major firearm parts except ammunition, spare parts, accessories, airsofts, and airguns must be transferred to Firearms & Explosives Division, Civil Security Group for deposit.
Only the store with the mother (main) license may import; no branch may import other than under the main license.
The Authority to Import is issued by C, PNP with a validity period of three (3) years.
An Authority to Import for indentor’s items is valid for one (1) year.
Items imported for demonstration by licensed firearm dealers/indentors must be returned to the country of origin or donated to the PNP upon completion of the demonstration by the requesting unit/agency or before expiration of the Import Authority.
Imported items intended for test and evaluation by the PNP and other law enforcement agencies must be properly endorsed by the Directorate for Research and Development (DRD) of National Headquarters- PNP.
The Import Authority must categorically specify the date or duration of the demonstration.
Commercial sale to any qualified individual or entity requires subsequent approval by Chief, PNP.
Requests for commercial sale approval are made by the concerned indentor.
Requests for Authority to Import indentor’s items must be strictly supported by attachments, including the following (for the applicable purposes listed):
- For AFP/PNP and Other Law Enforcement Agencies:
  - Purchase Order (original/authenticated copy)
  - Original End-User’s Certificate signed by authorized signatories: Chief, PNP/Regional Director (RD) for PNP, Commanding General for AFP, or Head of Office for other law enforcement agencies
  - Certificate of Availability of funds
- For Donation of Local Government Units (LGUs) to AFP/PNP/Other Law Enforcement Agencies:
  - Purchase Order (original/authenticated copy)
  - Original End-User’s Certificate
  - Deed of Donation
  - Certificate of Availability of Funds
  - Board Resolution
  - Endorsement from the Regional Director (RD)
  - Certification from RD that the PNP personnel using the firearms were trained by competent personnel in handling such special weapon
  - Requisition and Issuance Voucher (RIV)
  - Training certificate indicating end user are not members of AFP/PNP
New models of firearms imported by licensed dealers must have sample of each type subject for approval of the Firearm Classification Board before commercial availability in the local market to ensure quality and safety.

Exportation limits

Only defective items that were previously imported by a licensed gun dealer are allowed to be re-exported back to the country of origin.

Ammunition and parts sales controls

Ammunition sales by authorized dealers must be only to:
- licensed firearm holders, and
- members of the PNP, AFP, law enforcement agencies, and government entities with law enforcement functions
Such sales are covered by government firearm documentation issued by Memorandum Receipt only, and occur only upon approval and issuance of required permits by Chief, FED:
- Permit to Purchase Ammunition (PPA)
- Permit to Transport (PPT)
PPA issued to buyers forms part of the dealer’s monthly Report on Sales submitted to FED on or before the 10th day of the succeeding month.
Monthly reports consolidate all sales made by the main and its branch stores.
Permit to Purchase Ammunition may be availed upon request up to quantities not more than:
- 50 rounds for general cases, and
- 100 rounds for caliber 22.
Private Security Agencies, Company Guard Forces, PNP & AFP units may purchase ammunition on large quantities at any given time as need arises.
Licensed firearm holders secure their PPA at their respective Provincial/Regional Director/City Director.
Branch dealers in provinces may keep up to a maximum of 100,000 rounds of various calibers in their depository vault for sale to licensees in the area with approved PPA.
A branch dealer may replenish inventory stock only when the dealer can account for previous ammunition acquired, and replenishment is allowed by C, FED.
Imported firearms and major parts (barrel, slide and frame) transferred to FED for inspection, inventory, and recording must be kept in the importing dealer’s store vault.
These imports may be displayed in stores only if covered by an appropriate Authority to Display issued by C, FED.
The importing dealer must maintain a Record Book logging the names and addresses of buyers of firearms and major firearm parts.
FED must maintain its own records of importation and withdrawal of major firearm parts made by dealers.
Before sale of major firearm parts, buyers must furnish the dealer a copy of their valid firearm license.
Monthly sales reports to FED, CSG must indicate firearm details and the list of individuals to whom firearms were sold, and only licensed individuals serve as the basis for allowing dealers to replenish inventory stock.
Frame / Conversion kit / Slide / Barrel control:
- A firearm frame/conversion kit is treated as a firearm; purchase requires compliance with SOP 13.
- The caliber of firearm assembled from the purchased frame must be indicated in the application form.
- A licensed firearm holder who purchases/owns a new frame must dispose/transfer ownership of the license firearm frame to a qualified person or surrender/turn over it to FED for proper disposition.
- Gun club members may retain both the old and newly purchased frame if the new frame is licensed to them as another firearm in accordance with SOP 13.
- Purchase of slide and/or barrel requires a permit to purchase slide and/or barrel compatible/similar in caliber and make with the buyer’s licensed firearm.
- A buyer purchasing/owning a slide and/or barrel assembly with the same serial number as their licensed firearm must indicate the new caliber formed by the purchased parts.
- Only licensed firearm holders may purchase/own slide and/or barrel compatible with the make as approved by the buyer’s license.
Ammunition components:
- Gun powder and primer require an approved Permit to Purchase Components issued by C, FED prior to sale.
- Component permits form part of dealers’ monthly reports.
- Dealers’ monthly ammunition production reports must show quantities produced and number of primers, brass shells, heads/wads, and the amount of powder used.
- Ammunition components of dealers must be sold only to authorized entities, including:
  - Units of the Armed Forces of the Philippines
  - Units of the Philippine National Police
  - Government entities possessing one hundred (100) or more firearms under Long Certificate of Registration
  - Licensed Security Agencies and Company guard forces
  - Military/Police/Security Guard Training Schools
  - Gun clubs, public or private, duly recognized PNP
Primer display limit:
- No more than 10,000 small arms primers may be displayed in any commercial establishments.
- Additional primer stocks must be stored in a magazine designed for primers.
- Transport of primers must follow SOP #4 entitled Control and Supervision of Importation, sale, and possession and use of explosive dated April 19, 1991.

Sales of demonstration items and dealer conduct

Imported firearms intended for test and evaluation are prohibited from sale unless a prior written authorization from the foreign supplier/manufacturer is submitted and prior approval of C, PNP is secured.
A licensed gun repair shop is prohibited from repairing unlicensed/unregistered firearms.
Gun store and gun repair shop are subject to inspection by representatives of FED, CSG or FESAGS of PRO’s as often as necessary.

Miscellaneous operational requirements

FED, Civil Security Group through the Firearms and Explosives Division is the authorized custodian and depository of all commercial firearms, ammunition, spare parts, components, etc. held by licensed dealers.
Firearms dealers with stock on hand but with failed renewal of their License to Operate must transfer their items at FED-CSG storage vault.
New applicants (for dealership corporation) must have paid-up capital stock of P500,000.00 and must maintain office/store in a commercial district.
Sole proprietorship applicants must have the same business capitalization amount.
Applicants must provide a certification/affidavit of the corporate treasurer and a bank statement as proof of capitalization.
No person is allowed to engage in or have interest in more than one dealership with similar business activity.
Branch stores require separate registration from the Bureau of Domestic Trade and mayor’s permit to operate the branch in the locality.
An Authority to Display issued by the Chief, FED is necessary to cover display of firearms and ammunition by a licensed gun dealer in their stores upon request.
The movement and storage of firearms and ammunition must be under the direction of the Firearms and Explosives Division (FED), Civil Security Group.
Internal arrangement between dealers in the form of Memorandum of Agreement is allowed to legalize transactions for any legal purpose.

Administrative sanctions and transitional consequences

The circular provides for administrative sanction of suspension or cancellation of license depending on the gravity and nature of the offense for prohibited acts including:
- Selling ammunition to unauthorized persons/entities/security agencies, etc.
- Selling a display firearm without authority
- Failure to maintain basic security and safety requirements of a gun dealer and gun repair shop (including vault, fire fighting equipment, and maintenance of security guards from a licensed security agency)
- Failure to submit monthly sales report on time to FED, CSG
- Unauthorized disposition or selling of firearms intended for demonstration/test/evaluation and display during gun show purposes
- Submission of spurious documents in the application for licenses
- Other similar offenses
License holders with an unrenewed License to Operate have six (6) months from the effectivity of the circular to renew the expired licenses.
After the six (6) months, expired/unrenewed licenses are deemed cancelled.
Cancelled licenses permit a further six (6) months to dispose remaining stocks, if any, after which remaining stocks are confiscated in favor of the government upon due process.
Gun dealers with expired License to Operate on the brink of closing may sell remaining items on hand through bodega transfer as part of the dissolution and winding up period.
The Inspectorate Section of the Operations Branch, FED, CSG conducts and determines penalties for violations.
The Chief, FED recommends penalties to the C, PNP for approval.
Gun dealers with expired License to Operate are not allowed to renew the same if no sale of firearm was made during the period of the license’s validity.

Supplementary rules, repeals, and effectivity

The Chief, Firearms and Explosives division may formulate supplementary rules and regulations on matters not covered by the circular.
All procedures, rules, and regulations not in conformity with the circular are rescinded, amended, or modified accordingly.
The circular takes effect immediately.