Brazil authorizes government-to-government model for defense sector exports

Brazil has formally cleared the way for government-to-government (G2G) defense export deals, creating a framework designed to give foreign buyers greater institutional backing in transactions involving Brazilian-made military products.

The G2G model is used mainly in more sensitive industries, such as defense. Even when contracts involve private companies, the negotiation is conducted directly by the government of the exporting country.

In that process, in addition to strengthening diplomatic ties, the government representing the seller acts as a guarantor, overseeing and ensuring delivery of the products.

Military powers such as the United States and France make broad use of this model. Saab’s Gripen fighter jets, for example, were sold to Brazil through a contract with the Swedish government.

The new regulation sets out how, within an intergovernmental relationship, the ministry may take part in export operations and technical intermediation services involving defense products made in Brazil, through linked state-owned companies.

In practice, the directive creates a formal procedure through which a foreign public entity can express interest to the Defense Ministry in importing a Brazilian defense product.

That foreign government may identify the linked state-owned company through which it intends to carry out the transaction, or it may request that the ministry itself designate one.

The expression of interest must be formalized through an official letter, written communication, email or another suitable instrument and addressed to the secretary for defense products.

The measure represents the regulatory materialization of a strategy that had already been under discussion within the government.

In a report published in September 2025, CNN showed that the Defense Ministry was studying adoption of the G2G model to expand external sales by the sector, given the legal interpretation that Brazilian law did not allow the government to directly represent private companies in that type of negotiation.

At the time, the solution under consideration was precisely to use a state-owned company as the institutional bridge between the foreign buyer and the private supplier.

The new directive confirms that logic.

The text makes clear that the planned role will occur through linked state-owned companies, but the definition of “technical intermediation” shows that the contract itself may be signed between the foreign public entity and a private Brazilian company from the defense industrial base.

In other words, the state-owned company acts as the institutional channel within the intergovernmental arrangement, while the private company may remain the manufacturer and supplier of the product.

The directive also seeks to surround the arrangement with safeguards.

A designation of a state-owned company by the secretary for defense products is not binding on the foreign government, nor does it condition completion of the deal.

In addition, the participation of the state-owned company depends on its own consent, and the text expressly states that such designation cannot be used to justify any request for reimbursement, repayment, cost coverage or any other payment from the public treasury in the event of expenses or losses.

The reading within the sector is that the arrangement seeks to bring Brazil closer to practices already adopted by major defense exporters, in which sales are negotiated in a government setting even when the product is manufactured by private companies.

That is precisely the logic the Defense Ministry has been emphasizing in recent weeks.

In early April, during Fidae in Chile, the ministry signed memorandums of understanding with Alada, Empresa de Projetos Aeroespaciais do Brasil, EMGEPRON, Empresa Gerencial de Projetos Navais, and IMBEL, Indústria de Material Bélico do Brasil, with the aim of strengthening legal certainty and fostering exports of Brazilian defense products under the government-to-government model.

At the time, Defense Products Secretary Heraldo Luiz Rodrigues said the instruments are meant to allow state-owned companies linked to the ministry to facilitate sales by private firms to friendly governments, giving institutional credibility to the negotiations.

The move comes at a time of strong growth in the sector’s exports. According to the Defense Ministry, Brazil’s defense industry totaled $1.02 billion in authorized exports in the first quarter of 2026, more than double the $457 million recorded in the same period a year earlier.

According to the ministry, Brazil currently sells defense products to 148 countries through about 93 exporting companies.

Source: CNN Brasil

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