Legal Question in Business Law in California

Hi,

I am looking to be a broker between a foreign military and ammunition manufacture here in the U.S. I was told by US State Department that I need to register with them before I can start negotiating for these two. I was also told that anyone that acts as a broker (regardless of business location) will have to register with the State.

This is a lot of paperwork.

My question is...can I act as a translator instead of a broker and have one agent in the foreign country act as a broker? This way, I'm not receiving any commission for the transaction but get paid from translating only.


Asked on 11/18/09, 12:05 pm

3 Answers from Attorneys

If you make TOTALLY sure all you do is translate, you should be OK. Bear in mind, though, that you are now on the "radar." So if you try to act as a broker while pretending to only be a translator, you run a significant risk. It's probably not a good idea if the agent in the foreign country is not registered, either.

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Answered on 11/23/09, 1:00 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Every agent has a principal. Principals are frequently liable for the acts of their agents when they act in the course and scope of their agency; it's a basic concept of the law of agency. It sounds as though you would be the agent's principal here.

If the agent is carrying out your instructions or your business plan at your behest, either you or the agent will be responsible for pretty much the same paperwork, and if the agent doesn't do it, or doesn't get it right, you'll be on the hook.

Also, agents are supposed to disclose the identity of their principals. If they don't, the third parties they deal with can hold them individually liable instead of or in addition to the proncipal.

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Answered on 11/23/09, 4:45 pm
Thomas W. Newton Tims & Newton

I think you are treading on very dangerous ground. The transactions you're talking about almost assuredly are governed by the Arms Export Control Act (22 US Code 2778, et seq) and "ITAR", short for International Trafficking in Arms Regulations (22 Code Fed. Reg 120.1 et seq).

The programs are administered by the Deputy Assistant Secretary for Defense Trade Controls and Managing Director of Defense Trade Controls, Bureau of Political-Military Affairs.

I think Mr. McCormick is right - you likely are on DDTC's radar. I think Mr. Whipple is also right that you would be a principle in the transaction. I'm no expert on ITAR, but I think it very likely that any involvement in transferring munitions to a foreign nation without DDTC registration and a specific license for the export could result in very grave consequences. I urge you to contact an attorney who practices in this area of law and get specific advice regarding your specific circumstances and the specifics of the transactions in which you want to be involved. Do not roll the dice on this one!

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Answered on 11/23/09, 6:21 pm


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