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Brokering of Export Controlled Goods and Technologies

Important Note: The offence provisions of the Defence Trade Controls Act 2012 - for supplying and publishing DSGL technology and for brokering DSGL goods and technology - came into force at the end of a 12-month implementation period that expired on 1 April 2016. Individuals and organisations have been able to apply for permits since 16 May 2015.

Brokering of Part 1 (Munitions List) Defence and Strategic Goods List (DSGL) goods, software or technology is regulated and requires a permit from DEC before the brokering activity can occur. A permit for the brokering of Part 2 (Dual-Use List) DSGL goods, software and technology is required if you know, or it would be reckless or negligent for you not to know that the goods, software or technology being brokered are for a 'military end use' or a Weapons of Mass Destruction (WMD) program. A permit may also be required for the brokering of Part 2 (Dual-Use List) DSGL goods, software and technology if you are directed by the Minister for Defence or an authorised delegate to seek a permit.

Activities such as freight forwarding, providing financial services, insurance, reinsurance, promotion or advertising are not captured under the Act's brokering controls, and do not require a permit.

Brokering is when a person or organisation acts as an agent or intermediary in arranging the 'supply' of DSGL goods, software and technology between two places located outside of Australia. For the activity to be considered brokering, the 'person' must receive money or a non-cash benefit or advance their political, religious or ideological cause for arranging the 'supply'.

Brokering controls apply to anyone (person or organisation) located in Australia or Australian citizens or residents (brokering as an individual) located outside 'Australia'. For example, the brokering controls apply worldwide to a company incorporated under Australian law.

An Australian citizen or resident who is an employee of a foreign company and who is brokering at the direction of that foreign company while located outside of Australia, is not captured by Australian brokering controls; as they are brokering as an employee of that foreign company. If they were brokering as an individual, Australia's brokering controls would apply to them globally.

Brokering Frequently Asked Questions

Why does Australia control brokering activities?

Australia's export control system aims to stop goods and technology that can be used in chemical, biological and nuclear weapons, or military goods and technologies, from being transferred to individuals, states or groups of proliferation concern.

Brokering controls have been introduced to close gaps in Australia's export controls laws and to implement Australia's international obligations; including, under the Wassenaar Arrangement. The Wassenaar Arrangement is a primary international arms control and counter-proliferation group of 41 countries.

Do I have to receive payment for the brokering arrangement to be controlled?

Not necessarily. The brokering arrangement is controlled under the Act if you receive money or a non-cash benefit for the brokering activity, but it is also controlled if you are advancing a political, religious or ideological cause. Non-cash benefit means property or services in any form other than money.

Is an employee's income a benefit?

The benefit has to be derived by the person (individual or organisation) who is doing the brokering. For example, if a company is arranging for Part 1 (Munitions List) DSGL goods to be moved from one place overseas to another, the company would need to receive a benefit for that brokering activity. A salary received by a company employee for doing their job, which may include brokering is not a benefit received by the company. So you need to consider the benefit received at the company level if it is the company that is brokering.

Is the possibility of a future sale considered to be a benefit received for the brokering activity?

The money or non-cash benefit must be directly attributable to the particular arrangement. If the person were to undertake arrangements that might result in receiving money as a result of a future sale - this would not be brokering as the person is not receiving money for the particular arrangement activity, but rather, might receive money for a sale at a later time.

Does brokering have to involve a formal agreement or commercial arrangement to be controlled?

No, brokering can be controlled if it involves negotiating transactions, contracts or commercial arrangements that are both formal and informal. Informal arrangements can include verbal agreements.

Does the Defence Trade Controls Act 2012 apply to brokering of controlled technology in both tangible and intangible form?

Yes, the Act controls brokering of controlled goods or technology regardless of whether it is a tangible export (e.g. physical goods or software stored on a laptop) or an intangible supply (e.g. by email or fax).

Does brokering have to be from one country to another country to be controlled?

No. The Act also controls brokering of a 'supply' within a single country, unless there is a relevant exception.

The Act applies to arranging the supply of goods or technology from a place outside Australia to another place outside Australia. A place can include a vehicle, vessel, aircraft, an area of water or a fixed or floating structure or installation of any kind.

Are there any exceptions to the controls on brokering?

Yes. Brokering is not controlled if the 'supply' of the DSGL goods, software or technology is from a listed country. Also excluded are Australian citizens, residents or companies who conduct all the brokering activities while located in a listed country. Countries that the exceptions apply to will be listed in a legislative instrument that will be available shortly.

There is also an exception for brokering goods and technology from a place in a country to another place in the same country and that country is a listed country.

A member of the Australian Defence Force, an Australian Public Service employee, ASIO or ASIS employee, Australian Federal Police or State or Territory police member who is brokering in the course of his or her duties is exempt from these controls under the Defence Trade Controls Act 2012 and do not need a permit.

It is important to note that these exceptions do not apply where the DSGL goods, software or technology are being brokered are for a weapons of mass destruction program. You must apply for a permit in these circumstances.

How do I know if the Defence Trade Controls Act 2012 applies to me?

Contact the compliance area within your organisation (if applicable), otherwise you can use the Online DSGL Tool to determine if the Defence Trade Controls Act 2012 applies to your activity. If you are still unsure, you can contact DEC for assistance and apply for advice.

Registering as a Broker

You can submit a broker registration application to DEC. The application form is available at the Forms Page on this website

To be registered as a broker, you must pass a fit and proper person test. Matters taken into consideration in assessing broker registration include:

  • criminal history;
  • history of insolvency, bankruptcy or debt relief; and
  • history of non-compliance with export control laws.

A national police check must be submitted with your broker registration application unless you hold a current security clearance level of Negative Vetting 1 or higher.

Registration as a broker is valid for 5 years and generally takes 15 working days to assess (this may be extended to 35 working days if the application needs to be referred to other agencies).

All registered brokers are added to the public Register of Brokers, which is available on the Register of Brokers Page.

Broker Registration Frequently Asked Questions

What does a broker registration allow me to do?

Once you are registered as a broker, you will be eligible to apply for and hold a permit to broker DSGL goods, software or technology. You will still need to apply for permits to undertake brokering activities.

Can my application for broker registration be refused?

Yes, if the Minister for Defence (or an authorised delegate) is not satisfied that an individual or manager of the body corporate is a fit and proper person, the broker registration application will be refused.

Can a broker registration be cancelled?

Yes, the Minister for Defence may cancel a broker registration:

  • if the Minister determines that the broker has breached a condition of the registration; or
  • if the Minister determines that the broker has breached a condition of a permit; or
  • if the broker is convicted of an offence against a law of the Commonwealth, a State, a Territory or foreign country punishable by imprisonment for 12 months or longer; or
  • if the Minister determines that the broker registration application or an application to renew the registration contained information that was false or misleading; or
  • in any other circumstances that the Minister considers appropriate.
How do I de-register as a broker?

Request this via an email to DEC. You will then receive advice that your broker registration has been cancelled and it will be removed from the Register of Brokers. All permits issued to the registered broker will also be cancelled.

If it is a body corporate who are a registered broker, any permits issued to that registration can continue to be used by the body corporate until they expire or are otherwise revoked by the Minister for Defence as long as the body corporate nominates a new manager within 28 days of the previous manager's departure.

If I own my own company, should I apply as an individual or a body corporate?

DEC recommends you apply as a body corporate. This will enable you to authorise other employees to apply for brokering arrangement permits on your behalf.

What is a civil penalty order or infringement notice?

Civil penalties and infringement notices are fines or orders imposed by a court or government agency to enforce laws. DEC only requires information regarding civil penalty orders and infringement notices made against you or the body corporate by the Australian Border Force and the Australian Securities Investment Commission.

What does the Broker Registration application form question regarding non-compliance with export controls mean?

Non-compliance is when an individual or body corporate fails to comply with an Australian or foreign export control law. You may have been non-compliant if you have received a warning letter, infringement notice or have been convicted of an offence.

The following is a list of relevant Australian export control legislation:

What is a National Police Certificate?

The National Police Certificate is a police record check provided by the Australian Federal Police and will display all releasable court outcomes from all states and territories of Australia based on respective policies/legislations. This includes any convictions, findings of guilt or pending court proceedings relating to the applicant, including in relation to any traffic offences. Only unspent convictions or findings of guilt are required to be listed for the purposes of applying for registration as a Broker under the Defence Trade Controls Act 2012.

How do I obtain a National Police Certificate?

You must apply to the Australian Federal Police for a National Police Certificate. Further information is available at: www.afp.gov.au/what-we-do/police-checks/national-police-checks.aspx

There is no requirement to obtain a National Police Certificate if you hold a current security clearance level of Negative Vetting Level 1 or higher.

When selecting the 'purpose type' on the national police check online application form, select 'Commonwealth purpose/Employment' for the 'Purpose of Check' select 'pre employment/standard disclosure'.

How do I submit the National Police Certificate with the application?

A National Police Certificate in the name of the individual or manager of the body corporate must be submitted with the broker registration application. There is no requirement for an original or certified copy unless requested by DEC. The National Police Certificate must have been issued within three months of the date of the broker registration application.

What details will be made public once I register as a broker?

If your application to register as a broker is approved, you will be added to a Register of Brokers.The Register contains the following details:

  • the name of the broker (individual or name of body corporate and manager of body corporate),
  • the day on which the broker's registration is due to end, and
  • a statement as to whether the broker's registration is subject to conditions.
Who is considered to be a manager of a body corporate?

A manager of a body corporate means an individual who makes, or participates in making, decisions that affect the whole, or a substantial part, of the body's affairs. For a body corporate to be registered, the application must include a manager of a body corporate.

Once a body corporate is registered as a broker, who in that body corporate can apply for a brokering arrangement permit?

The manager of the body corporate listed on the broker registration is authorised to apply for brokering permits. Only one manager can be listed on the broker registration. If the manager of the body corporate wants to enable other employees to apply on behalf of the body corporate, the manager can provide a list of these employees to deco@defence.gov.au.

What happens if the registered manager of the body corporate leaves their position?

The body corporate must notify DEC and apply to amend the registration with the details of the new manager within 28 days in order to continue to apply for and use broker arrangement permits.

All brokering permits applied for under the broker registration remain valid until they expire and can continue to be used by the body corporate. The body corporate will be responsible for any non-compliance with the registration and brokering permits (including record keeping and complying with any conditions). Brokering permits will be revoked if the broker registration ceases to be in force.

Brokering Arrangement Permits

You should apply for a permit as early as possible. You will need a permit before you arrange the 'supply'.

Brokering Arrangement Permit Frequently Asked Questions

How do I apply for a brokering permit?

You can submit an Application to Make a Brokering Arrangement to DEC. In order to be eligible to hold a permit to broker DSGL goods, software or technology, you must first be a registered broker.

A brokering arrangement application generally takes 15 working days to assess from when a completed application is received. This may be extended to 35 working days if the application needs to be referred to other agencies.

An application may be for a particular arrangement or for more than one arrangement that includes brokering DSGL goods, software or technology from several suppliers. Permits can be valid for up to 5 years or longer if necessary. Where you need to broker regularly for the duration of a long term project, you may be granted a permit valid for the life of the project. The flexibility and validity period of permits will depend on the assessed risks and timeframes associated with the brokering activity. It is important to provide as much information as possible about your brokering activity in your application so that DEC can issue the most appropriate permit to suit your needs.

Can I still use brokering arrangement permits that are current, if my broker registration expires?

No. If your broker registration expires (and is not renewed) any permit that you hold will cease to be in force and cannot be used.

Can I apply for both a Broker Registration and a Brokering Arrangement Permit at the same time?

Yes.

Are there record keeping requirements?

Brokers must keep records for 5 years. Record-keeping requirements, as outlined in section 24 of the Defence Trade Control Regulation 2013, are:

Some brokering permits may require you to submit regular reports to DEC. The condition on the permit will list specific reporting requirements. It is important that you read your permit carefully and comply with all conditions listed on your permit. It is an offence to breach a condition of a brokering permit.

Under what criteria will my application for a brokering permit be assessed?

The Minister for Defence or an authorised delegate may issue a permit if they are satisfied that the activity would not prejudice the security, defence or international relations of Australia. Your application will be assessed using the criteria listed in Section 8 of the Defence Trade Controls Regulation 2013, which relate to national security, regional security, international obligations, human rights and foreign policy.

What happens if I broker Defence and Strategic Goods List (DSGL) goods, software or technology without a permit?

Defence uses a voluntary compliance model. Where the person is willing, and is attempting to do the right thing, Defence's response to non-compliance will generally reflect the level of cooperation displayed by the person and therefore responses will likely involve awareness raising initiatives to help reduce the risk of further non-compliance.

However, in situations of continued non-compliance Defence may take appropriate measures to address this including imposing more stringent conditions and requirements, revocation of permits, or the possible prosecution of offences.

The offence for brokering of Part 1 (Munitions List) DSGL goods, software and technology without a permit is up to ten years imprisonment or 2500 penalty units (equating to a fine of $450,000) or both. The main offence provisions under the Defence Trade Controls Act 2012 came into force on 2 April 2016. The offence provisions can not be applied retrospectively.

If you believe you have been non-compliant, we recommend you disclose this to DEC immediately. Voluntary disclosure demonstrates an intention to comply with export control obligations and is the basis for DEC's regulatory relationships.

Further information regarding compliance can be found on the Compliance Page of this website.

What happens if I receive a notice to apply for a permit to broker Part 2 (Dual-Use) Defence and Strategic Goods List (DSGL) goods, software and technology?

If a notice is issued, the Minster or an authorised delegate will notify you in writing of the decision including the reasons for doing so, unless they reasonably believe that the disclosure of the reasons would prejudice the security, defence or international relations of Australia. The notice will specify the Part 2 (Dual-Use List) DSGL goods, software or technology and any destinations which will require a brokering permit.

The notice will remain in force until it is revoked or lapses.

It is an offence to broker Part 2 (Dual-Use List) DSGL goods, software or technology without a permit or contravene a condition of the notice, if you know the notice is in force. The penalty is up to ten years imprisonment or 2500 penalty units (equating to a fine of $450,000.00) or both.

Can a notice to apply for permits to broker Part 2 (Dual-Use List) Defence and Strategic Goods List (DSGL) goods, software or technology be revoked?

Yes, the Minister or an authorised delegate can revoke a notice to apply for permits to broker Part 2 (Dual-Use List) DSGL goods, software or technology depending on who issued the notice.

Brokering Prohibition Notice

A prohibition notice will be issued if the Minister for Defence reasonably believes that the brokering activity would prejudice the security, defence or international relations of Australia. If a prohibition notice is issued, the Minister will notify you in writing of the decision including the reasons for doing so, unless the Minister reasonably believes that the disclosure of the reasons would prejudice the security, defence or international relations of Australia.

A prohibition notice will remain in force for the period specified in the notice (no longer than 12 months), unless it is revoked earlier. The Minister will review the notice annually and if the Minister still believes that the brokering activity will prejudice the security, defence or international relations of Australia, she or he may issue a subsequent prohibition notice.

Only the Minister for Defence can issue a prohibition notice.

It is an offence to broker DSGL goods, software or technology, or to contravene a condition of the notice, knowing that a prohibition notice is in force. The penalty is up to ten years imprisonment or 2500 penalty units (equating to a fine of $450,000.00) or both.

The Minister for Defence can revoke a prohibition notice.

What are my rights to review and DEC's privacy and information handling policy?

Information on rights to review and DEC's privacy and information handling policy can be found on the Export Controls and Your Rights Page on this website.

Definitions

'Australia' (For the DTC Act 2012) this means the Australian mainland, Tasmania, Jervis Bay Territory, Australia's external territories (Ashmore and Cartier Islands, Australian Antarctic Territory, Christmas Island, Cocos (Keeling) Islands, Coral Sea Islands, Heard Island and McDonald Islands and Norfolk Island) as well as Australia's Territorial Sea (12 nautical mile limit).

'DSGL Technology' means a thing that is technology or software as defined by the Defence and Strategic Goods List and within the scope of that list.

'Military End-Use' Goods are or may be for a military end-use if the goods are or may be for use in operations, exercises or other activities conducted by an armed force or armed group, whether or not the armed force or armed group forms part of the armed forces of a foreign country.

'Person' is defined in section 2C of the Acts Interpretation Act 1901 to 'include a body politic or corporate as well as an individual'. Therefore, 'person' can mean an individual or an organisation.

'Supply' includes supply by way of sale, exchange, gift, lease, hire or hire-purchase and includes the provision of access to DSGL technology.

Return to the Understand Strengthened Export Controls page.