The Washington distributor says it lost money when federal regulators reclassified a specific type of Russian ammunition after authorizing the company to import a large order.

P.W. Arms, Inc., a wholesaler in Redmond, filed suit against the Bureau of Alcohol, Tobacco, Firearms and Explosives in a Seattle federal court on Dec. 18. The lawsuit alleges the ATF incorrectly classified the ammo 7N6, a 5.45x39mm rifle round, as “armor piercing” and in turn prohibited it from importation after permitting the company to do so.

According to the complaint, the ATF issued the permits to P.W. Arms to import the Russian surplus ammo on three separate occasion: twice in February 2013 and once in February 2014. Each shipment contained 50 million rounds. In the following months, the company arranged for the first batch to be shipped stateside, an investment of more than $3 million for goods and shipping costs.

Then, on Feb. 17, 2014, the first shipment containing 37.8 million rounds was intercepted by federal agents as it entered the country. However, days later, on Feb. 21, 2014, the ATF issued the third permit to import the ammo, the lawsuit says.

The company’s president, Stacy Prineas, said he contacted the ATF about the delay. In response, the agency told him in March that the ammo was classified as “armor piercing,” which is a prohibited item and barred from importation by federal law.

The ATF issued a ruling on 7N6 ammunition in April 2014 that redefined it as armor piercing. According to federal law, the definition of armor piercing is rifle ammo containing a specific metal core (or combination of metals) and can be fired out of a handgun. The agency said that it learned that a handgun chambered for 7N6 was available in the commercial market.

The lawsuits says the ATF stopped the remaining containers of the initial order, and the reclassification halted the shipping of P.W. Arms’ other orders while en route through Europe, which cost the company more money.

The lawsuit argues that the firearm identified — an obscure AK variant called the Fabryka Bronie Radom, Model Onyx 89S — in the ruling was rare, not commercially available, and was incorrectly classified as a handgun.

The lawsuit says the Onyx 89S was submitted as a prototype in November 2011 to be reviewed by the ATF. The dealer who submitted the sample had imported three models for research and development, but not for commercial sale. Additionally, the lawsuit says the ATF approved the dealer’s request in 2014 to reclassify the prototypes as a short barrel rifle instead of a handgun.

The lawsuit also alleges the ATF violated Freedom of Information Act laws by denying information on the process to reclassify 7N6 ammunition.

As an award, the lawsuit requests $2.9 million plus damages, court costs, and the release of records. Deadlines have not yet been scheduled for the case.