National implementation of ATT brokering provisions: Insights from ATT initial reports.

States parties are required under Article 13(1)of the Treaty to provide the Secretariat with an initial report; by doing so, they share information on measures undertaken to implement the Treaty. As of July 2024, of the 115 ATT states parties had submitted such a report. Of these, 70 chose to make their reports publicly available, while 21 chose to make their reports available only to the Secretariat and other states parties. While the lack of universal public reporting limits the insights these reports can provide, they nonetheless shed important light on measures undertaken by 70 states parties – nearly two-thirds of all ATT states parties – to implement the Treaty. Thus, these reports provide valuable insights into national approaches to regulating brokering of conventional arms and items in the ATT context. This subsection uses the publicly available ATT initial reports to examine how states parties are implementing their obligations under Article 10 and related Treaty provisions to prevent or mitigate the risk of brokers and brokering activities facilitating the diversion of conventional arms and undermining efforts to achieve the object and purpose of the Treaty. A summary of the information on ATT Article 10 implementation contained in the 70 states parties’ reports is provided in Table 2. 

National laws and regulations covering brokering in conventional arms usually cover the category of SALW. A short analysis of relevant information on brokering controls contained in reports by United Nations Member States in 2024 on the implementation of the Programme of Action on SALW is therefore included in Box 9. All 70 states parties that submitted public initial reports on their implementation of the ATT between 2015 and July 2024 provided information on whether (or not) they regulate brokering of conventional arms and related items and, if so, how. The amount of available information analysed in this subsection depends on which reporting template the states parties used, if any. At CSP7 in 2021, states parties endorsed a revised version of the initial reporting template with more detailed brokering-related questions. Further use of this template in initial reporting will be likely to provide even more insights into national brokering controls in the future.

3.2.1. Status of implementation of ATT 

Article 10 Of the 70 states parties that submitted a public initial ATT implementation report, 53 (76 per cent) reported that their national control systems include measures that allow the regulation, pursuant to their national laws, of brokering in conventional arms. Most of the other 17 states parties (24 per cent) at the time of their reporting were yet to start the implementation of Article 10 of the Treaty. Several states parties explained that their national control system did not yet regulate brokers and brokering, but that a national legal review process was ongoing at the time of submission of the report and that efforts were being made to establish such a system. Almost all states parties that have an established national control system and measures to control brokers and their activities do so based on definitions available in national legislation. 

3.2.2. National definitions and understandings of brokering 

As of mid-2024, 44 states parties reported that their national legislation contains a definition of a broker or brokering, with 41 states providing a national definition of “brokering” and 3 states parties also an explicit definition of the term “broker”. A very small number of states noted that, while there is not a definition of a broker in their national legislation, the concept of arms brokering is included and covered by their national legislation. An analysis of these definitions shows that 35 of these ATT states parties employ a narrow definition of arms brokering, primarily as constituting the core brokering activities. At least 11 states parties use a broader approach in defining brokering that includes both core brokering and closely associated activities (see Box 5). Several states parties do not provide sufficient information in their initial reports that would allow determining which approach their national legislation takes. Nevertheless, the available information suggests that, while national definitions of these terms vary, most of the ATT states parties that reported publicly define “brokers” as persons or entities: 

ໜ Acting on behalf of a third party or as an intermediary between two or more parties and brokering as mediating an arms deal or 

ໜ Dealing in arms, military equipment and technology, to be transferred from one third country to another third country 

3.2.3. Types of control measures 

As noted in Subsection 3.1, ATT Article 10 (on brokering) suggests two measures for regulating arms brokering: a requirement for brokers to register with a competent national authority; and a requirement for brokers to obtain written authorization before engaging in brokering activities. These measures need not be mutually exclusive and may be taken alongside other measures. Thus, the control measures described in the publicly available ATT initial reports can be categorized according to four common approaches for regulating arms brokering: 

1. Registration to be a broker: for a fixed period of time, and for brokering activities for defined categories or items and destinations 

2. Licensing and applications for authorization: whereby a broker applies for an authorization to undertake brokering activities, and applies for a licence or other form of written, prior authorization for each transaction 

3. A two-stage process (or two-step approach): an arms broker first has to register, and must then apply for an authorization to undertake brokering activities for each transaction (i.e., a combination of the first two approaches and corresponding measures) 

4. Prohibition on brokering provides a breakdown of the approach taken by the 48 states parties that provided information in their initial report on the specific types of national measures to regulate brokering (while information from 11 states parties in the initial report does not allow determining the specific types of measures). The most common form of regulation is to use a two-step approach, followed by licensing or written authorization.

3.2.3.1. Registration of brokers

 Among these 59 ATT states parties, only information provided in initial reports by 3 states (5%; e.g., Montenegro, Niger and Paraguay) is indicative that their sole brokering control measure is a requirement for brokers to register with the competent national authority prior to undertaking brokering activities. See Box 8 for an example of such a requirement and an example particularly worth highlighting

3.2.3.2. Licensing and applications for authorization 

Seventeen of the 59 ATT states parties (29%) reported using an approach based on licensing and applications for authorizations. In this approach, a broker applies for an authorization to undertake brokering activities, and then applies for a licence or other form of written authorization for each transaction. The majority of these states’ parties indicated that authorizations take the form of individual licences that brokers must obtain for each brokering transaction. 

3.2.3.3. A two-stage process (or two-step approach)

 Twenty-six of the 59 parties (44%) indicated that they had a two-stage process (or two-step approach): As a first step, an individual or entity wanting to engage in brokering activities must first apply to a competent national authority to be a broker. If authorized, permitted or registered to be a broker, the second step is for the broker to apply for an authorization by a competent authority for each brokering transaction. This approach is thus a combination of the measures described in 3.2.3.1 and 3.2.3.2 above (corresponding to the two measures suggested in ATT Article 10) or for particular sets of transactions based on licensing conditions. Sweden, for instance, explained that individuals or entities that want to be active in this area are “required to obtain a permit” (which in practice is equivalent to registration), and that “there are requirements both for registration as a broker and for a licence for individual transactions from or outside” of the country.

3.2.3.4. Blanket prohibition of brokering

 Only two of the 70 ATT states parties that submitted a publicly available initial report (less than 3% of the total) prohibit arms brokering: Argentina and Palau. Argentina explained that, while trade is defined innational legislation in all its possible variants,the term brokering is not, and “as such armsbrokering is not permitted”. Palau explained that brokering is “effectively prohibited underthe National Firearms Control Act”, which prohibits any person from having firearms in their “custody or control”.

3.2.4. Scope of control measures

 As indicated in Section 1 (Box 3), there are at least two dimensions to the issue of scope with regards to national brokering regulations and control measures: the scope of items regulated and controlled; and the scope of jurisdiction exercised and asserted over brokering and brokers. The information provided by ATT states parties in their reports is therefore analysed in the following two subsections according to these two dimensions, and then on the scope beyond ATT Article 6 (on prohibitions). 

3.2.4.1. Scope of control measures: Items covered 

Thirteen (22 per cent) of the 59 states parties that reported that their national control systems include brokering control measures reported that the scope of these measures includes categories and items as per ATT Article 2(1). A further 29 states parties (49%) reported that the scope of their measures goes beyond those categories. The Netherlands’ brokering controls apply tocategories and items covered by its nationalcontrol system and list, which is based on the Common Military List of the European Union. This includes all categories covered under ATT Articles 2(1), 3 (ammunition) and 4 (parts and components), as well as other military equipment. Canada also explained that its national brokering control measures extend beyond the scope of categories covered by the ATT and include “all military items and also all other goods listed” and controlled “if their end-use is related to weapons of mass destruction”.

71 3.2.4.2. Scope of control measures: Jurisdiction 

Twenty-one of the 59 states parties (36%) reported that their national control measures have a national dimension only. Switzerland explained that its brokering control measures apply “only to activities of a person or legal entity on Swiss Territory” and that the brokering of controlled goods between two third countries through brokering activities on its national territory is covered by its national law. Another twenty-one of the 59 states parties (36%) reported that their brokering controls include an extraterritorial dimension for brokering activities carried out by their nationals, permanent residents, or companies abroad. New Zealand’s measures apply, for example, “to any brokering activity carried out by New Zealand personsor entities, including those operating wholly or partially offshore”. Norway noted that “illegal brokering can, under certain circumstances specified [in the national penal code],be subject to criminal proceedings althoughcommitted abroad”. In other words, these states also assert some degree of extraterritorial controls (and jurisdiction) over brokering by nationals or companies domiciled on their territory that carry out activities abroad. The information provided by the other states parties in initial reports is insufficiently detailed or specific and inconclusive as to the scope of jurisdiction of their controls of brokers and brokering. 

3.2.4.3. Scope of control measures: Additional scope beyond the ATT 

Eighteen states parties (31%) reported that their national control systems go beyond the requirements of the ATT Article 6 (on prohibitions), as described in Subsection 3.1 above, and they also apply controls on brokering in other situations. Some ATT states parties noted, for example, that brokering to more stringent control measures under regional instruments to which they are a party or which they abide by (e.g., the European Union Council Common Position or the ECOWAS Convention; see Table 1). Some states also used this opportunity to highlight the connection between ATT Articles 10 and 11. For example, the Republic of Korea noted that, in addition to the obligations under Article 6, a brokering licence is also not issued in situations deemed by the competent national authority as constituting additional risks of arms diversion.

77 3.2.5. Exemptions in national brokering control measures 

Ten states parties that have brokering control measures in place reported on exemptions to these measures; 31 states parties reporting that there are no exemptions to their national brokering control measures. These 10 states reported exemptions for specific countries, specific national authorities (of their own), their armed forces, specific offices or individuals, and for cooperation with (their) industry. For example, Austria reported its control measures contained exemptions for the brokering of transfers to or from other European Union member states, while Latvia explained that, under its system, a simplified procedure can be applied in such cases (of European Union member states). Several states (Albania, Austria, Germany, Niger,Sweden and Switzerland) reported exemptions for their armed forces. For example, Albania reported an exemption for its armed forces when abroad (and events of their armed forces with foreign armed forces on national territory), as well as for military or emergency assistance to other states. Other states use exemptions to facilitate cooperation with their industry. For example, Sweden explained that “companies and individuals that only supply Swedish government authorities” are exempted, while its brokering controls apply to all other industry entities. Switzerland exempts its armed forces’ procurement office and activities by related companies. Regarding companies and individuals being involved in brokering activities abroad, Canada explained, for example, that its established brokering control measures “do not apply to transfers between affiliates of a corporation”, and to situations where its nationals abroad are “directed by their non-Canadian employer to undertake brokering activities, provided the Canadian does not control the foreign employer”.

3.2.6. Record-keeping 

Forty-one of the 59 states parties (69 per cent) that reported that their national control systems include brokering control measures indicated that this includes provisions on the maintenance of records by the competent national authority of authorizations related to the conduct of brokering activities. Several states (e.g., Estonia) explained that such records are kept both in paper and electronic version. The majority of these ATT states parties keep such records for a minimum of 10 years. Some indicated longer record-keeping periods in line with provisions of regional instruments of which they are also a state party. A small number indicated indefinite record-keeping periods. Several of these ATT states parties also indicated that they require registered, authorized individuals and companies that undertake brokering activities on their territories or abroad to keep records and different types of information of such activities. Of these states parties, none indicated in their initial ATT implementation reports that their recordkeeping systems include records of brokers that have been convicted by national courts of violating national laws and regulations on the conventional arms trade, illicit brokering activities and related offences.

3.2.7. National authorities for regulating brokering

 Of the 70 states parties that submitted a public initial report, 53 provided information on the competent national authority or authorities for the regulation of brokering. Thirty-six of these states parties have a single national authority that is responsible for the regulation of brokering, while 16 states have multiple competent responsible national authorities responsible for the regulation of brokering. Most commonly, these are (or are overseen by) the ministries of economy, trade, foreign, or interior affairs. Forty states specified other national authorities involved in decision-making processes related to brokers and brokering. Among these states, several indicated that brokering decisions are made by inter-ministerial, inter-departmental or inter-agency mechanisms, such as, for example, a council of ministers, a committee or a national commission. Of the states parties that were at the time of their reporting yet to regulate brokers and brokering, 3 had already identified a single national lead entity responsible for this. The competent national authorities identified by 53 ATT states parties in their initial public reports are summarized in Figure 1 (from the most to the least common). Other national authorities involved in decision-making processes related to brokering as identified by ATT states parties are summarized in Figure 2 (also from the most to the least common). 

3.2.8. Implementation assistance 

The 70 initial reports examined for the purposes of this section provides few insights into assistance needs and capabilities of these ATT states parties, as only the revised reporting template includes specific questions in this regard. Of the six states parties that submitted public initial reports using the revised template, as of July 2024: 

ໜ Two states parties (Barbados and Romania) indicated that they are in a position to provide assistance with establishing measures to regulate the brokering of arms 

ໜ Three states parties (Lesotho, Niger and the Philippines) indicated that they would like to receive assistance with establishing measures to regulate the brokering of arms.

Overall, this section shows that ATT states parties have made progress in implementing Article 10 as well as related provisions of the Treaty and have establish brokering control measures. Yet, there remain significant gaps and loopholes in national legal and regulatory frameworks, in control systems, as well as in the enforcement of the Treaty provisions on countering illicit brokering and diversion. The national control systems of many states still lack measures to regulate brokering, thereby posing a risk of exploitation by unscrupulous brokers seeking to divert conventional arms to the illicit market.