Redmond arms dealer sues after ATF locks up assault rifle ammo Firm permitted to import 100M rounds of AK ammunition claims government action cost it millions

A Seattle-area arms importer has sued the federal government claiming the ATF has unfairly restricted importation of ammunition developed for the AK-74 assault rifle, pictured above in the hands of a fighter in Ukraine. less A Seattle-area arms importer has sued the federal government claiming the ATF has unfairly restricted importation of ammunition developed for the AK-74 assault rifle, pictured above in the hands of a fighter in ... more Image 1 of / 119 Caption Close Redmond arms dealer sues after ATF locks up assault rifle ammo 1 / 119 Back to Gallery

A Redmond arms importer with plans to resell up to 100 million rounds of Russian assault rifle ammunition now claims the ATF illegally locked up the ammo.

In a federal lawsuit, the owners of P.W. Arms Inc. contend Bureau of Alcohol, Tobacco, Firearms and Explosives agents seized millions of rounds built for the AK-74 rifle. The wholesale arms importer had permits to import up to 100 million rounds of ammunition designed for the popular Eastern Bloc assault rifle.

At issue is a 2014 finding by the ATF that the military-oriented ammunition is armor-piercing and can be used in a pistol. Federal law restricts the importation of armor-piercing handgun ammunition, which the ATF contends includes Russian-made AK-74 ammo.

Attorneys for P.W. Arms say customs agents working with the ATF seized 6 million rounds the company had imported from Germany and blocked the importation of millions more. According to court filings, the seizure has cost P.W. Arms nearly $3 million.

Writing the court, attorney Robert Chadwell argued that the ATF erred by approving permits to import the ammunition and then reneging without warning. The seizure came after P.W. Arms had already imported 38 million rounds of 5.45x39 mm ammunition from the same sources.

“P.W. Arms is a small company that does its best to be fully compliant with the rules, regulations, and permitting process of the ATF and has a history of being cooperative with the agency,” Chadwell said Wednesday.

The U.S. Justice Department is expected to respond by mid-February to the lawsuit, which was filed in U.S. District Court at Seattle. A U.S. Attorney’s Office spokeswoman declined to comment on the allegations.

P.W. Arms had been importing surplus AK-74 ammunition since at least 2012.

Manufactured in Russia and other former Warsaw Pact nations, the round has been used in a variety of weapons since it was introduced in the mid-1970s. The AK-74 is a successor to the AK-47 rifle and remains the primary service weapon in most of the former Soviet Union.

According to the lawsuit, P.W. Arms received ATF permission in February 2013 to import 50 million rounds of the ammunition. The firm planned to pay about 6 cents a round, then sell the ammunition to licensed firearms dealers around the United States.

In early 2014, the firm had already imported about 38 million rounds of ammunition when U.S. Customs and Border Protection agents in Virginia stopped two shipping containers packed with 2.9 million rounds.

Attorneys for the firm contend that four days after that seizure, ATF officials approved a second permit allowing P.W. Arms to bring in another 50 million rounds. That second permit was inked Feb. 21, 2014; federal agents stopped two more shipping containers packed with ammunition three weeks later.

According to the lawsuit, 5.8 million rounds of ammunition imported by P.W. Arms are sitting in a Reno, Nevada, storage facility. Another 6 million remain in a German warehouse.

The action appears to have stemmed from an ATF finding that the ammunition could be used in a rare, shortened version of the AK-74. Writing the court, Chadwell said only four copies of the prototype weapon have been imported to the United States, none of which is available commercially.

“No production handgun capable of discharging 5.45x39 mm ammunition is currently, or ever has been, commercially available to the general public,” the firm’s attorneys said in the lawsuit.

Whether the round can fire in a handgun is particularly important, as the federal Gun Control Act bans the importation of handgun ammunition deemed to be armor-piercing due to its hardness.

Chadwell noted that ATF's plans to ban civilian sales of military AR-15 ammunition were publicized by the agency well before a decision was made. The bureau ultimately abandoned the effort, described by one Republican congressman as an “attack on the Second Amendment."

Video: Green Tip ammo

No such notice occurred before the 2014 action targeting AK-74 ammunition, Chadwell told the court. Attorneys for the importer claim the ATF has since failed to respond to records requests made under the Freedom of Information Act.

P.W. Arms’ attorneys have asked for a judgment finding that the ammunition at issue can be legally imported. They’ve also requested that the government pay for the firm's costs and legal fees.

The lawsuit was filed Dec. 18 in U.S. District Court at Seattle. Attorneys for the government have until Feb. 19 to respond to the claim.

Seattlepi.com reporter Levi Pulkkinen can be reached at 206-448-8348 or levipulkkinen@seattlepi.com. Follow Levi on Twitter at twitter.com/levipulk.