Two recent regulatory notices spotlight often overlooked “brokering” obligations for international defense contractors. For companies involved in any aspect of the international defense trade, these notices serve as a useful reminder of companies’ obligations and the need for effective policies to prevent violations.

The Notices

On April 14, 2026, the State Department’s Directorate of Defense Trade Controls (DDTC) published two notices in the Federal Register requesting public comments on the information collections associated with its brokering regulations under the International Traffic in Arms Regulations (ITAR). The first, Public Notice 12984, seeks to extend the currently approved collection for the Brokering Prior Approval process — the DS-4294 form that brokers must submit to obtain DDTC consent before engaging in brokering activities. The second, Public Notice 12985, does the same for the Annual Brokering Report that registered brokers must file with each registration renewal.

No New Ground — but an Important Reminder

Neither notice breaks new regulatory ground. Both are routine Paperwork Reduction Act exercises — 60-day comment periods preceding submission to OMB. But they underscore that ITAR brokering obligations exist, that they are actively administered, and that DDTC is paying attention. Brokering is one of the most frequently overlooked corners of ITAR compliance. If your company facilitates defense transactions — even if it never touches a defense article — it may be time to take a closer look.

What Counts as “Brokering” Under the ITAR?

Part 129 of the ITAR governs the registration and licensing of brokers. The definitions are broader than many people expect.

A broker is any U.S. person, wherever located, any foreign person located in the United States, or any foreign person located outside the United States that is owned or controlled by a U.S. person, who engages in the business of brokering activities. And critically, even a single occasion of brokering qualifies — there is no minimum volume or frequency threshold.

Brokering activities are defined as “any action on behalf of another to facilitate the manufacture, export, permanent import, transfer, reexport, or retransfer of a U.S. or foreign defense article or defense service, regardless of its origin.” That language casts a wide net. It expressly includes financing, insuring, transporting, or freight forwarding defense and defense services. It also covers soliciting, promoting, negotiating, contracting for, arranging, or otherwise assisting in the purchase, sale, transfer, loan, or lease of a defense article or service.

There are important carve-outs. Activities that are purely domestic U.S. sales, activities by regular employees acting on behalf of their employer, administrative services such as arranging office space or providing translation, and activities by affiliates on behalf of other affiliates are generally excluded. But companies should not assume they fall neatly within one of these exceptions without careful analysis.

Who Must Register — and What Are the Key Obligations?

Any person who engages in brokering activities must register with DDTC, and that registration is generally a precondition for obtaining approval to broker or for using any of the available exemptions. U.S. persons already registered as manufacturers or exporters under Part 122 can add broker status to their existing registration — they do not need a separate filing — provided certain ownership and control conditions are met, and the broker entities are identified on the Statement of Registration. Importantly, the registration obligation falls on the company engaging in brokering, not on each individual employee involved.   

Once registered, brokers face three principal ongoing obligations:

1. Prior approval – For many categories of defense articles and all foreign defense articles, brokers must submit a written request for approval — the DS-4294 — and receive DDTC’s consent before engaging in the brokering activity. This requirement applies to foreign defense articles and services on the U.S. Munitions List, as well as specified categories of U.S.-origin items, including firearms, rockets, vessels of war, tanks, aircraft, night vision equipment, chemical and biological agents, and submersible vessels, among others. Certain exemptions exist — for example, brokering undertaken for a U.S. government agency under contract, or brokering of foreign defense articles destined exclusively for NATO member countries, Australia, Israel, Japan, New Zealand, or South Korea — but those exemptions have conditions and limitations of their own.
2. Annual reporting – Every registered broker must provide DDTC with an annual report describing its brokering activities during the preceding 12 months, submitted alongside the annual registration renewal. Reports must identify all persons who participated in the activities, describe the defense articles and services involved, and disclose the type and value of consideration received or expected. Brokers with no reportable activity must certify to that effect.
3. Recordkeeping – Registered brokers must maintain records concerning their brokering activities in accordance with 22 C.F.R. § 122.5.

Where Companies Get Tripped Up

In practice, the most common compliance gap is not that companies deliberately ignore brokering rules — it is that they do not realize the rules apply to them. Here are some common scenarios:

• A U.S. consulting firm arranges introductions between a foreign government buyer and a defense manufacturer but never takes title to any equipment. That is brokering.
• A U.S. company negotiates the terms of a deal for the sale of foreign-origin defense articles between two overseas parties. Even though the articles are not of U.S. origin, that is brokering.
• A financial institution that goes beyond providing routine commercial credit — for example, by arranging a transaction involving defense articles or holding title to them — may lose the narrow exemption for entities “exclusively in the business of financing” and subject to the brokering requirements.

The Defense Trade Advisory Group (DTAG) highlighted these challenges in a December 2024 white paper, noting that the broad definition of “brokering activities” and the vague contours of reporting obligations create real confusion. The paper further noted that the reports DDTC has received are often incomplete or inconsistent, which suggests many companies are struggling to get this right.

Best Practices for Strengthening Your Brokering Compliance

Companies should consider the following steps to assess and improve their brokering compliance programs:

• Conduct a brokering activity audit. Map your company’s touchpoints across defense articles and services, including facilitation, introduction, negotiation, financing, and logistics. Ask whether any of these activities constitute brokering activities under Part 129.
• Review your DDTC registration. If your company is registered as a manufacturer or exporter, confirm that any subsidiaries or affiliates engaged in brokering are properly identified in the Statement of Registration. If your company is not registered at all but is engaged in brokering, it is required to register.
• Know when prior approval is required. Understand which categories of defense articles trigger the DS-4294 prior approval process and which activities may fall within an exemption. Do not rely on exemptions without confirming that all conditions are met.
• Establish internal policies and procedures. DDTC itself recommends that brokers establish written policies and procedures for obtaining prior authorization, reporting brokering activities, and maintaining records. DDTC’s guidance suggests this is a baseline expectation.
• Train your people. Employees in business development, international sales, contracts, and finance should understand what constitutes brokering under ITAR. Compliance awareness is the most effective early-warning system.
• Seek DDTC guidance when in doubt. Section 129.9 of ITAR provides a formal mechanism for requesting a written determination from DDTC on whether a particular activity constitutes brokering. An official determination from DDTC can provide valuable certainty and a shield against compliance infractions.