This law is certainly controversial as to what, exactly, it applies to...some think it is very simple, others think it's very complicated. I've seen good arguments on both sides for what it applies to but needless to say echo four hit the nail on the head saying that both legal pros and BATF both have "problems" interpreting this law sometimes. Just my opinion.
(a) No person shall assemble a semiautomatic rifle or any shotgun using more than 10 of the imported parts listed in paragraph (c) of this section if the assembled firearm is prohibited from importation under section 925(d)(3) as not being particularly suitable for or readily adaptable to sporting purposes.
(b) The provisions of this section shall not apply to:
(1) The assembly of such rifle or shotgun for sale or distribution by a licensed manufacturer to the United States or any department or agency thereof or to any State or any department, agency, or political subdivision thereof; or
(2) The assembly of such rifle or shotgun for the purposes of testing or experimentation authorized by the Director under the provisions of Sec. 178.151; or
(3) The repair of any rifle or shotgun which had been imported into or assembled in the United States prior to November 30, 1990, or the replacement of any part of such firearm.
(c) For purposes of this section, the term imported parts are:
(1) Frames, receivers, receiver castings, forgings or stampings
(3) Barrel extensions
(4) Mounting blocks (trunions)
(5) Muzzle attachments
(7) Bolt carriers
(8) Operating rods
(9) Gas pistons
(10) Trigger housings
(15) Butt stocks
(16) Pistol grips
(17) Forearms, hand guards
(18) Magazine bodies
(20) Floor plates