American Handgun Standards Act of 1997 - Amends the Federal criminal code to prohibit the manufacture, transfer, or possession of a junk gun that has been shipped or transported in interstate or foreign commerce.

Defines a "junk gun" as any handgun that does not meet specified criteria for authorization by the Secretary of the Treasury for importation into the United States.

Makes such provision inapplicable to: (1) the possession or transfer of any junk gun otherwise lawfully possessed under Federal law on the date of this Act's enactment; (2) any firearm or replica of a firearm that has been rendered permanently inoperative; (3) the manufacture for, transfer to, or possession by the United States, a State, or a political subdivision of a State of a junk gun, or a transfer to or possession by a law enforcement officer employed by such an entity for law enforcement purposes (whether on or off duty); (4) the transfer to or possession by a rail police officer employed by a rail carrier and certified or commissioned as a police officer under the laws of a State of a junk gun for such purposes; or (5) the manufacture, transfer, or possession of a junk gun by a licensed manufacturer or licensed importer for the purposes of testing or experimentation authorized by the Secretary.