To combat illicit transfers of arms, the U.S. Congress passed legislation in 1996 that requires brokers to register before engaging in the brokering of commercial sales of defense equipment, including small arms and light weapons (SA/LW).

The law covers U.S. citizens conducting business in the U.S. and abroad as well as foreign nationals operating on U.S. territory. The only exception is for employees of the U.S. or foreign governments acting in an official capacity.

Brokers must pay a fee and register with the State Department��s Office of Defense Trade Controls (DTC) which is responsible for administering the arms brokering law. Each brokered transaction must have prior written approval by the State Department before it is carried out. Brokers must also provide an annual report to the U.S. Government enumerating and describing their brokering and related activities.

Currently, there are about 160 individuals and firms registered as brokers. Registrations are valid for 5 years after which they must be renewed.

Monitoring and enforcement of compliance with brokering laws is critical. Brokering activities are thoroughly monitored. When an arms transfer is suspected of irregularity or possible violation, the State Department and U.S. Customs Service conduct end-use inquiries through the "Blue Lantern" program. Hundreds of these end-use checks are conducted worldwide each year. Any conviction of a violation of U.S. export control laws will result in a loss of license and statutory debarment, and possibly fines (up to $1 million) and/or incarceration (up to 10 years).