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Small arms trade

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Small arms trade or the small arms market refer to both authorized and illicit markets for small arms and light weapons (SALW), and their parts, accessories, and ammunition.

Definition

The small arms trade, or small arms market, includes both authorized transfers of small arms and light weapons (and their parts, accessories, and bullets ), and illicit transfers of such weapons. Small arms and light arms are those that can be transported by one or two people, or carried by pack animal or vehicles, ranging from firearms like pistols and light machine guns to man-portable air-defense systems (MPADS), mortars, and rocket-propelled grenades (RPGs).[1][2] The trade occurs globally, but is concentrated in areas of armed conflict, violence, organized crime. In terms of actions that are illicit, this trade involves the illegal trafficking of small arms, and the exchange of money and drugs for small arms which are all commodities that cross borders around the globe. These weapons are not only the choice for a majority of regional conflicts today, but also for many terrorist groups operating around the world.[3][4][5] Legal transfers are generally defined as those approved by the involved governments and in accord with national and international law. Black market (illegal) transfers clearly violate either national or international law and take place without official government authorization. Gray (or grey) market transfers are those of unclear legality that do not belong in either of the other categories.[4]

Small arms proliferation is a related term used to describe the growth in both the authorized and the illicit markets.[6] In 2003, various international organizations (including Amnesty International, Oxfam International, and IANSA), and domestic groups (e.g. the Small Arms Working Group in the U.S.) committed themselves to limiting the trade in and proliferation of small arms around the world. They said that roughly 500,000 people are killed each year by the use of small arms.[6]

Scope

Main small arms exporters

The United States is the largest exporter of small arms, according to the Small Arms Survey, an independent research project based in Switzerland, in 2014.[7][8]

In 2010, the number of countries exporting at least $100 million of small arms annually rose from 12 to 14. The exporters' list was led by the U.S., followed by Italy, Germany, Brazil, Austria, Switzerland, Israel, Russia, South Korea, Belgium, China, Turkey, Spain and the Czech Republic. Sweden dropped off the list because its exports fell from $132 million in 2010 to $44 million in 2011.[9]

In addition, massive exports of small arms by the U.S. (M16), the former Soviet Union (AKM), People's Republic of China (Type 56), Germany (H&K G3), Belgium (FN FAL), and Brazil (FN FAL) during the Cold War took place commercially and to support ideological movements. These small arms have survived many conflicts and many are now in the hands of arms dealers or smaller governments who move them between conflict areas as needed.[citation needed]

Main small arms importers

The United States is the largest importer of small arms. The United States imported $2.5 billion in small arms 2013 and $2.2 billion in 2014.[10] The United States imports millions of firearms each year.[11]

The eight countries that imported at least $100 million of small arms in 2011 were the United States, Canada, Germany, Australia, Thailand, United Kingdom, France and Italy. South Korea dropped from the list because its imports fell from $130 million in 2010 to $40 million in 2011.[9]

In the United States

Firearms manufacturers in the United States produced more than 150 million firearms since 1986 and more than 70 million firearms since 2008. The vast majority of all firearms produced in the United States were sold domestically.[12] In 2011, United States firearms manufacturers produced about 6.5 million firearms.[13] In 2013, United States firearms manufacturers produced 10,847,792 firearms, including 4,441,726 pistols, 725,282 revolvers, 3,979,570 rifles, and 1,203,072 shotguns, and exported 4% of the total production. In 2015, firearm and ammunition manufacturers in the United States had $13.5 billion in annual revenue and $1.5 billion in profit.[14][15] Firearms manufacturers in the United States produced 3 million firearms in 1986 and 9 million in 2015, tripling production in 30 years.[11]

The United States with 5% of the world's population owns 50% of the world's firearms, according to a 2007 survey by United Nations Office on Drugs and Crime.[16] More firearms are sold to consumers in the United States than in any other country.[17] In 2007, the citizens of the United States were the most heavily armed civilian population in the world, with 90 firearms for every 100 citizens, United States citizens owned 270 million of the world’s 875 million firearms, and about 4.5 million of the 8 million new firearms manufactured worldwide each year were purchased in the United States.[18] In 2015, United States civilians owned an estimated 300 million firearms.[19] In 2015, firearm and ammunition retailers in the United States had $3.1 billion in annual revenue and $478.4 million in profit.[14][15]

In 2017, there were nearly 10,500 firearms manufacturers in the United States, according to the National Shooting Sports Foundation trade association. Between 2005 and 2015, the number firearms manufacturers in the United States increased 362%.[20] In 2013, the three most important firearms manufacturers in the United States were Sturm, Ruger & Co., the Remington Outdoor Company, and Smith & Wesson, according to The Independent.[21] In 2014, the ten firearms manufacturers with the most firearms produced for United States markets were Sturm, Ruger & Co., Remington Arms, Smith & Wesson, Glock Ges.m.b.H., SIG Sauer, O.F. Mossberg & Sons, Savage Arms, Springfield Armory, Beretta, and Taurus. In 2016 these ten firearms manufacturers accounted for two-thirds of the domestic United States market, producing 8 million firearms. Between 2007 and 2016, Sturm, Ruger & Co. sold more firearms in the United States than any other firearms manufacturer.[22] Most firearms manufacturers in the United States are privately held; three are public: Sturm, Ruger & Co., Smith & Wesson, and Vista Outdoor.[23]

The United States government does not comprehensively track firearms sales. The best surrogate for firearms sales is requests to the National Instant Criminal Background Check System operated by the Federal Bureau of Investigation.[24][25][26] Firearms manufacturers rely on background check statistics as an indicator of the health of the firearm industry.[27] Limitations of background checks as a proxy for firearm sales include: a background check does not necessarily result in a firearm sale; a given background check may authorize the purchase of multiple firearms; in most states private sales of firearms do not require background checks; some states periodically recheck concealed carry permits.[25][26][27] Background checks are positively correlated to responses to questions regarding household firearms ownership on the General Social Survey administered by the National Opinion Research Center at the University of Chicago and on the Behavioral Risk Factor Surveillance System administered by the Centers for Disease Control and Prevention.[28][29] Background checks are "a fairly good bellwether" for firearms sales, according to Fortune magazine.[30] The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) within the United States Department of Justice licenses firearms manufacturers in the United States and publishes the “Annual Firearms Manufacturing and Export Report.”[12] Reporting to investors is required of publicly held firearms manufacturers.

About 7 million firearms were sold in the United States in 2002 and about 15 million in 2013.[17] In 2015, about one third of households in the United States owned firearms.[19][14] The percentage of American households owning firearms declined in recent decades, according to a consistent trend across national surveys. The number of firearms owned by those who own firearms is increasing, from an estimated average of 4.2 firearms in a firearms-owning household in 1994 to an estimated average of 8.1 in 2013.[31][32][33][34][16][35] In 2016 half the firearms in the United States were owned by 3% of the population.[36] "Gun ownership is becoming increasingly concentrated, with fewer gun owners owning more guns, as guns are primarily marketed to people who already own guns,” according to analysts in February 2018.[37][38][39] Household firearm ownership is higher in rural areas than in urban areas.[34][14]

Typically, firearms sales are lowest on Sundays, increase from Monday through Friday, and are highest on Saturdays, peak days are Black Friday, the shopping day after Thanksgiving and the days before Christmas, and peak months are March and December.[40] Each year, December is generally the biggest month for firearms sales;[41] the seasonality is more pronounced for rifles than handguns.[42]

Firearms sales in the United States rise and fall with the economy, influenced by the political climate and public opinion.[43][26][44] Production and sales of firearms in the United States increased during periods of the perception by consumers of the possibility of new federal regulation of firearms.[12][24][45]

The two biggest years for firearms production in recent history were 2013 and 2016, during periods of intense debates on gun control.[12] Firearms sales increased during election cycles and after mass shootings in the United States, as consumers felt concerned regarding personal safety and new regulation restricting the availability of firearms.[21] Firearm sales tend to rise following a mass shooting, according to Fortune magazine in 2015.[41] Firearms sales in the United States are driven by two fears: the fear for personal safety and the fear of new regulations restricting the availability of firearms.[46][47][48] The main driver of firearm sales is fear of violence, according to Jon Vernick, co-director of the Center for Gun Policy and Research at the Johns Hopkins Bloomberg School of Public Health in 2015.[49] "Wariness of tougher gun laws in response to the massacres routinely drives panic buying of more of weapons," according to The Guardian in 2015.[50] "Gunmakers don't benefit from tighter gun control. They benefit when there are talks of tighter gun control but those talks go nowhere," according to Business Insider in 2015.[51][52] "Fear of gun-buying restrictions has been the main driver of spikes in gun sales, far surpassing the effects of mass shootings and terrorist attacks alone," according to The New York Times in 2016.[17] "A predictable post-shooting cycle has taken hold: Gun control advocates demand stricter laws. Gun rights advocates warn a crackdown is imminent. Sales spike as gun buyers stock up," according to Bloomberg News in 2016.[25]

After the Federal Assault Weapons Ban passed the United States Congress and was signed into law by President Bill Clinton same day September 13, 1994, firearms sales increased and firearm manufacturer futures contracts rose in anticipation of the effective date.[12][23][53] After the ban expired in 2004, sales growth stalled.[23] Production of AR-style rifles increased after the expiration of the ban, from 107,000 in 2004 to 1.2 million in 2015.[54][55] Sales of AR-15 style rifles increased after the expiration of the ban and after the passage of the 2005 Protection of Lawful Commerce in Arms Act, which limited the liability of firearms manufacturers.[56] Between 1998 and 2018, sales of AR-15 style rifles were a major contribution to the profits of firearms manufacturers.[57]

After the election of Barack Obama to the Presidency in 2008, firearms sales increased 42% on fears of additional restrictions on firearms purchases.[58][12][24] Under Obama, gun owners purchased firearms they feared would be outlawed.[24] Firearms manufacturer Smith & Wesson "experienced strong consumer demand for our firearm products following a new administration taking office in Washington, D.C. in 2009," management reported to investors.[51] April 2009 through March 2010, the Freedom Group sold 1.2 million rifles and 2.6 billion rounds of ammunition.[43]

After the Sandy Hook Elementary School shooting in Newtown, Connecticut on December 14, 2012, recently re-elected Obama on January 16, 2013 proposed universal background checks, the Assault Weapons Ban of 2013, and a high-capacity magazine ban, and in the six weeks mid-December 2012 through January 2013, background checks were at the highest levels in fifteen years, and included eight of the ten highest days for background checks since 1998. Walmart rationed ammunition in response to a supply shortage, limiting customers to three boxes per customer per day.[59][60][61][46] Background checks in December 2012 were 44% higher than December 2011.[36] In December 2012 online and brick and mortar retailers sold out of AR-15 style rifles and high-capacity magazines.[62] In California, which has universal background checks and comprehensive firearms dealer licensing and reporting of firearms sales, sales of handguns were 53% higher than expected in the six weeks after the Sandy Hook Elementary School shooting, according to research published in the Annals of Internal Medicine.[40][63][64] In 2013 in New Jersey firearms sales rose after Governor Chris Christie proposed expanding background checks and banning some rifles, and in Maryland firearms sales rose before the implementation date of one of the nation’s strictest gun-control measures, which banned most semi-automatic rifles.[17] Between 2004 and 2013, handguns sales increased nearly fivefold and rifle sales tripled.[20] Sturm, Ruger & Co. had record sales in 2013 and Smith & Wesson had record sales in 2014.[65][58] In 2013 the three most important firearms manufacturers in the United States, Sturm, Ruger & Co., Remington Arms, and Smith & Wesson had $390 million in profits on record sales, and the share price of Sturm, Ruger & Co. and Smith & Wesson rose 70%.[21][22] In September 2014 Edward W. Stack, the chief executive of Dick’s Sporting Goods, a leading firearm and ammunition retailer, said at a conference “The gun business was very much accelerated based on what happened after the election and then the tragedy that happened at Sandy Hook” and noted that the firearms industry saw “panic buying” when customers “thought there were going to be some very meaningful changes in our gun” laws.[66][50][15]

After the Umpqua Community College shooting on October 1, 2015 near Roseburg, Oregon, Obama renewed calls for more stringent gun control, presidential candidate Hillary Clinton endorsed universal background checks, and the value of Smith & Wesson stock rose 7.29% and Sturm, Ruger & Co by 2.75%.[65][49] By October 2015, the stock price of Smith & Wesson gained 80% and Sturm, Ruger & Co. gained 70% over 2014. Between 2000 and 2015, the stock price of Smith & Wesson and Sturm, Ruger & Co. gained 320%, more than four times better than the S&P 500 Index.[58][27] The 2015 Black Friday, the shopping day after Thanksgiving, two weeks after the November 2015 Paris attacks, set a single-day record for backgrounds checks.[67][68][49][27] After the 2015 San Bernardino attack on December 2, 2015, background checks in December 2015 were 49% higher than December 2014.[36] In California, which has universal background checks and comprehensive firearms dealer licensing and reporting of firearms sales, sales of handguns were 41% higher than expected in the six weeks after the 2015 San Bernardino attack, according to research published in the Annals of Internal Medicine.[40][63][64] From 2008 to 2015, the total economic impact of the firearms and ammunition industry in the United States increased 158%, from $19.1 billion to $49.3 billion, according to the National Shooting Sports Foundation, the trade association for firearms manufacturers.[69][31] "Mr. Obama is the best gun salesman on the planet," said investment manager Louis Navellier on CNBC in January 2016.[68][48][22][17]

In much of 2016 the leading candidate for President was Hillary Clinton, who campaigned on restoring the Federal Assault Weapons Ban, expanding background checks, and holding firearms manufacturers liable for criminal use of their products. Fear that Clinton would win and limit firearms sales led to a record year in 2016 for firearms background checks, for firearms manufacturing, with over 11 million manufactured, and for firearms sales.[12][21][46][70] After the Orlando nightclub shooting in Florida on June 12, 2016, the worst mass shooting in United States history, background checks in June 2016 increased 39% over June 2015;[24][47][36] June 2016 was the third-highest month for background checks nationwide.[25]

Firearms manufacturers suffered after the election of President Donald Trump, who said he was a "true friend and champion" of firearms owners and received record-breaking campaign contributions from the National Rifle Association in 2016.[24][71] Firearm sales fell in early 2017, after Republicans took control of the Presidency of the United States and the United States Congress. In fiscal 2017 the combined revenues of Sturm, Ruger & Co., Vista Outdoor, Winchester, Remington Arms, and American Outdoor Brands fell 13% from fiscal 2016.[12][24][45][36] American Outdoor Brands reported that, compared with second quarter 2016, second quarter 2017 overall net sales declined $79 million, nearly 40%, firearms revenue was down 48.5%, rifle sales were down 57%, and handgun sales were down nearly 35%.[72][44][30] Sturm, Ruger & Co. reported that second quarter sales were down $132 million, 22%.[70] In 2017 firearms sales were at their lowest level since 1999.[36]

The stock prices of firearms manufacturers declined after the election of Trump because investors did not expect sales growth absent fear of regulation.[72][73][74] Between the 2016 election and August 2017, American Outdoor Brands stock price declined 30%, Sturm, Ruger & Co. declined 17%, and Vista Outdoor declined 41%.[70] Between the election and February 2018, American Outdoor Brands stock price declined nearly 70% and Sturm, Ruger & Co. declined 40%.[75]

Firearms sales did not increase after the October 2017 Las Vegas shooting or the February 2018 Stoneman Douglas High School shooting in Parkland, Florida.[26][76] In 2017 firearms background checks fell 8.4% from 2016, the largest year-over-year drop in the 21st century.[24][36] In October 2017, the month of the Las Vegas shooting, the deadliest mass shooting in modern United States history, background checks were down 13% from October 2016.[24][36] In November 2017, the month of the Sutherland Springs church shooting in Texas, background checks were down 12% from November 2016.[36][39] 2017 background checks were strong by historic standards, exceeded all years from 1998 through 2009.[72][44] Black Friday 2017 was a single-day record for background checks.[36][77]

"Politicians who threaten to ban guns are very good for the industry while politicians who oppose gun control, like Donald Trump, provide no boost," according to The Guardian in 2017.[72] "People buy firearms at the highest rates when they fear regulations will be enhanced," according to CNBC in 2017.[44] "There is no fear-based buying right now,” P. James Debney, the CEO and president of American Outdoor Brands Corporation told investors in December 2017.[37][38][39] "Nothing gooses sales like the threat of new limits on guns," according to Time magazine in 2018.[45] "Gun manufacturers are in the midst of the worst business crisis in decades, with double-digit sales drops driving some to the brink of bankruptcy," according to Time magazine in March 2018.[24][45] The firearms industry downturn was referred to as the "Trump slump"[71][44][78][48][72][26] by industry observers,[79][30] firearms manufacturers,[75] and firearms retailers.[11]

United Nations Conference on the Illicit Trade in Small Arms

The United Nations Conference on the Illicit Trade in Small Arms and Light Weapons in All Its Aspects was held in New York City from 9–20 July 2001 as decided in United Nations General Assembly Resolution 54/54 V. Preceded by three preparatory committee sessions, the two-week Conference resulted in the adoption of the 'Programme of Action to Prevent, Combat and Eradicate the Illicit Trade in Small Arms and Light Weapons in All Its Aspects.'[80] States are required to report to the United Nations on the progress of their implementation of the UN Programme of Action, commonly known as the PoA.

The extent to which illicit trade in small arms is a primary cause of armed conflict and other serious humanitarian and socioeconomic issues has drawn controversy. The extremely high incidence of small arms violence and the presence of illicitly obtained weapons, especially in areas of turmoil and armed conflict, is undisputed. Because other societal factors play a strong role in creating armed conflict, however, the role of such weapons as a driver of continued violence and disruption has been called into question. Recent scholarship has focused on the root societal causes for violence in addition to the enabling tools. Another target of criticism is the ability to regulate illicit trafficking through international means, since it is unclear exactly what proportion of the weapons are trafficked across borders. The nature of the trafficking enterprise makes exact statistics difficult to determine. Recently, however, researchers have had some success establishing hard numbers within limited parameters.[81]

According to a 2012 Routledge Studies in Peace and Conflict Resolution publication, "the relative importance of diversion or misuse of officially authorised transfers, compared to international entirely illegal black market trafficking has been thoroughly confirmed."[82] The authors go on to elaborate that..."For most developing or fragile states, a combination of weak domestic regulation of authorised firearms possession with theft, loss or corrupt sale from official holdings tends to be a bigger source of weapons concern than illicit trafficking across borders."[83]

The United Nations General Assembly scheduled a review conference in New York[84] which was held from 26 June to 7 July 2006.[85] The Review Conference was plagued by disagreements and states were unable to agree on a substantive outcome document.[86] There have also been four Biennial Meetings of States to consider the implementation of the Programme of Action, in 2003, 2005, 2008 and 2010. The 2008 Biennial Meeting of States resulted in the adoption, by vote,[87] of an Outcome Document[88] focusing on three main issues: international assistance, cooperation and capacity-building; stockpile management and surplus disposal; and illicit brokering in small arms and light weapons. The Fourth Biennial Meeting in 2010 was able to adopt, for the first time by consensus, a substantive Outcome Document which addresses the issue of illicit trade across borders.[89][90][91]

A second conference convened from 27 August to 7 September 2012 in New York.[92]

Data issues

Perhaps the greatest barrier to resolving debates over gun policy is the lack of comprehensive data. Although the UN Arms Register tries to keep track of major weapons holdings, there is no global reporting system for small arms. Gathering data for Small Arms and Light Weapons (SALW) can be difficult, considering the transparency of some countries and lack of an organized system within countries. However, as pointed out by the Small Arms Survey, in the past ten years twenty-nine countries have made available a national arms export report. Twenty-five of these countries being European, while only four countries being non-European which include Australia, Canada, South Africa and the United States. While some countries make information available about the small arms of their armed forces and law enforcement agencies; others release estimated data on public ownership. Most refuse to release anything, release rough estimates or simply do not know. Fortunately, to address these issues, the Small Arms Survey's contributors have devised a transparency barometer allowing them to consider each country's cooperation and credibility on shared information.[93]

According to the 2007 edition of the Small Arms Survey, there are at least 639 million firearms in the world, although the actual total is almost certainly considerably higher.[94] This number increases by approximately 8 million every year, for a total economic impact of about USD$7 billion annually.[citation needed]

The Small Arms Survey figures are estimates, based on available national figures and field research in particular countries. They give a general sense of trends and the scale of the number of small arms.[citation needed]

Gun rights issues

The necessity of gun control and international arms control, while generally uncontroversial in most regions across the globe, is a matter of public debate in countries such as Pakistan and the United States where gun ownership for purposes other than hunting is prevalent and socially acceptable. Non-governmental organisations such as IANSA argue that the prevalence of small arms contributes to the cycle of violence between governments and individuals. Unlike the judiciaries of most nations, the U.S. Supreme Court has ruled (most notably in Antonin Scalia's majority opinion in District of Columbia v. Heller[95][96][97]) that due to the Second Amendment to the United States Constitution, the legislative and executive branches of both the federal and state governments are limited in their abilities to regulate gun ownership. However, this interpretation is a matter of contention.[how?][98][99][100] On the other hand, U.S. gun rights lobby groups, most notably the National Rifle Association and Jews for the Preservation of Firearms Ownership, assert that access to gun ownership is often necessary for self-defence. Similarly, gun ownership is widely held by many in Pakistan to be a necessary protection against crime[101] as well as a way through which citizens can participate in law enforcement.[102]

Stephen Halbrook, a Senior Fellow at the Independent Institute and an author and lawyer known for his litigation on behalf of the National Rifle Association,[103][104] proposed the Nazi gun control theory, which claims that disarming citizens leaves them defenseless against totalitarian governments (such as Jews in Nazi Germany).[105] This theory has not been supported by qualified experts.[105][106][107][108][109][110]

Impact on Africa

The persistence and the complication of wars in Africa are partially due to small arms proliferation. Researchers for the Small Arms Survey estimate that approximately 30 million firearms are being circulated throughout Africa. This number is much less than the total number of small arms in Europe, estimated to be 84 million. However, the number of small arms isn't as important in comparison to how they are being used. The Small Arms Survey reports that at least 38 different companies are producing small arms in Sub-Saharan Africa, yet indigenous companies are not fulfilling the demands. South Africa is the largest exporter of small arms in the region, but only $6 million in small arms were exported out of the country, while $25 million dollars in small arms were imported into the continent in 2005. Beyond legal trade, the illicit trade of small arms and light weapons also has a great effect on Africa. Many of the illicit trade among small arms in Africa can be attributed to post-conflict removal and movement of weapons. This illegal transfer of weapons from country-to-country has been seen to incite conflict in bordering regions by the same armed groups. An example of this can be seen in the conflicts ranging from Liberia, moving towards Sierra-Leone, the Ivory Coast, and finally to Guinea. Another illicit trade of small arms is seen in craft production. Reports from arms analysts Matt Schroeder and Guy Lamb suggest that the country Ghana has the potential to yield 200,000 new weapons every year.[111] The consequences of small arms on African people due to international conflicts within Africa, rebel group activities, mercenary groups, and armed gang activities have yet to be fully measured. The International Action Network on Small Arms, Saferworld, and Oxfam International put it in perspective when they reported that armed conflict cost Africa $18 billion each year and about USD$300 billion between 1990-2005. During this period, 23 African nations experienced war: Algeria, Angola, Burundi, Central Africa Republic, Chad, Democratic Republic of Congo (DRC), Republic of Congo, Côte d'Ivoire, Djibouti, Eritrea, Ethiopia, Ghana, Guinea, Guinea-Bissau, Liberia, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, South Africa, Sudan, and Uganda.[112]

See also

References

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Further reading

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