Keeping Gun Dealers Honest Act of 2023

This bill strengthens oversight of licensed gun dealers by increasing compliance inspections from once to three times annually (Section 2) and raising criminal penalties for violations from one to five years (Section 3). It introduces new requirements, including mandatory physical inventory checks when dealers unlawfully transfer firearms or 10+ crime guns are traced to them (Section 8), and allows the ATF to suspend licenses or impose $10,000 civil penalties per violation for safety failures or trafficking-related offenses (Section 5). The bill also expands license denial grounds to include public safety risks or unsuitability (Section 9) and mandates biennial reports on implementation to Congress (Section 12). These changes directly affect licensed firearms dealers, importers, manufacturers, and collectors under federal law.