OPINION OF ADVOCATE GENERAL

BOT

delivered on 16 November 2011 (1)

Case C‑72/11

Generalbundesanwalt beim Bundesgerichtshof

v

Mohsen Afrasiabi,

Behzad Sahabi,

Heinz Ulrich Kessel

(Reference for a preliminary ruling from the Oberlandesgericht Düsseldorf (Germany))

(Common foreign and security policy – Restrictive measures taken against the Islamic Republic of Iran to prevent nuclear proliferation – Regulation (EC) No 423/2007 – Article 7(3) and (4) – Supply to a third party of a sintering furnace intended for the production of coating components for nuclear missiles for the benefit of an entity cited in Annexes IV and V to the regulation – Freezing of funds and economic resources – Prohibition of indirectly making an economic resource available – Prohibition of ‘knowingly and intentionally’ participating in an activity whose purpose or effect is to ‘circumvent’ that prohibition)

1.        By this reference for a preliminary ruling, the Oberlandesgericht Düsseldorf (Germany) asks the Court to clarify the scope of the restrictive measures adopted by the European Union with respect to the Islamic Republic of Iran in Article 7(3) and (4) of Regulation (EC) No 423/2007. (2)

2.        Those measures fall within the framework of the freezing of financial and economic assets of entities contributing to the development of the Iranian nuclear and ballistic programme, in breach of the Treaty on the non-proliferation of nuclear weapons. (3) They prohibit any citizen of the Union and any person in the territory of the Union from making available funds or economic resources to such entities.

3.        This reference was made in proceedings between the Generalbundesanwalt beim Bundesgerichtshof (Federal Advocate General at the Federal Supreme Court, Germany) and Mr Afrasiabi, Mr Sahabi and Mr Kessel concerning the supply to an entity involved in proliferation activities of a ceramic sintering furnace intended for the manufacture of coatings for components of nuclear missiles. The referring court is uncertain how the facts in the main proceedings are to be treated.

I –  International context and legal framework

4.        To understand this matter and its legal context, I must consider a fact that is from all points of view troubling.

5.        On 31 January 2004 the Pakistani nuclear scientist Abdul Qadeer Khan was arrested for his role in the establishing, from the year 1987, of an international network trafficking in nuclear equipment intended to assist, in their quest, States aspiring to possess nuclear weapons, such as the Democratic People’s Republic of Korea, the Islamic Republic of Iran or the Socialist People’s Libyan Arab Jamahiriya. For the first time, all the steps leading to the production of a nuclear weapon were beyond the control of the international community, that is to say, the supply chain, run by 30 intermediaries established in Europe, Asia and Africa, the equipment and technologies acquired piecemeal from Western companies, materials such as enriched uranium, technological know-how and technical expertise.

6.        According to research documents, this case has revealed the weakness of the States and their inability, for more than 16 years, to identify and put an end to a clandestine trade in nuclear materials and technology. It has also sounded the alarm as to the necessity and urgency of strengthening the fight against proliferation and, above all, of adapting it to the new, contemporary challenges to security. (4)

7.        On 28 April 2004, the Security Council of the United Nations (the ‘Security Council’) adopted Resolution 1540 (2004) which laid the foundations of the international combating of proliferation networks. Then, on 31 July 2006, within the framework of Resolution 1696 (2006), the Security Council required the Islamic Republic of Iran to suspend all its activities relating to the enrichment and reprocessing of uranium. Faced with Iran’s persistent breaches of its international obligations, the Security Council adopted restrictive measures against the Islamic Republic of Iran in the framework of Resolution 1737 (2006), adopted on 23 December 2006.

A –    Security Council Resolution 1737 (2006)

8.        The objective of Security Council Resolution 1737 (2006) is clear. It is to prevent the development, by the Islamic Republic of Iran, of sensitive technologies in support of its nuclear programmes.

9.        In order to attain this objective, the international community has committed itself to acting on the supply chain and on technical expertise, by establishing an embargo on proliferation-sensitive goods and technologies and by prohibiting any technical assistance in connection with the installation of these goods and technologies.

10.      In addition, the international community has committed itself to acting on the financing of proliferation activities by weakening the economic potential of the entities involved in the Iranian nuclear programme. In accordance with paragraph 12 of Resolution 1737 (2006), States are required to freeze the funds, financial assets and economic resources of these entities. In addition, they must prevent their nationals and the persons who are in their territory from making available to these entities funds and other financial assets or economic resources or allowing such assets or resources to be used for the benefit of those persons or entities.

11.      The entities covered by the Security Council and the sanctions committee include, in the appendix to that resolution, the industrial group Shahid Hemmat (‘SHIG’).

B –    Union law

12.      Resolution 1737 (2006) has been implemented by Common Position 2007/140/CFSP. (5) It was on the basis of this common position that the Council of the European Union adopted the Regulation which entered into force on 20 April 2007.

13.      For the purposes of Article 1(d) of the Regulation, ‘the term “technology” includes software’.

14.      In accordance with Article 1(i) of the Regulation, ‘“economic resources” means assets of every kind, whether tangible or intangible, movable or immovable, which are not funds but which may be used to obtain funds, goods or services’.

15.      Article 2(a) of the Regulation prohibits the sale, supply, transfer or export, direct or indirect, of goods and technology listed in Annex I to the Regulation. It refers to ‘dual-use’ goods and technology (civilian and military), among which may be found induction furnaces capable of operating at temperatures above 850°C. (6)

16.      Pursuant to Article 3(1) and (2) of the Regulation, prior authorisation is to be required for the sale, supply, transfer or export, directly or indirectly, to Iran of the other ‘proliferation-sensitive’ goods and technology listed in Annex II to the Regulation. These include, under the reference provision II. A2.005, ‘[c]ontrolled atmosphere heat treatment furnaces, as follows: Furnaces capable of operation at temperatures above 400°C’.

17.      Pursuant to Article 7(1) and (2) of the Regulation, all funds and economic resources belonging to entities engaged in, directly associated with, or providing support for nuclear activities are to be frozen. Those entities are listed in Annexes IV and V to the Regulation.

18.      Article 7(3) of the Regulation provides as follows:

‘No funds or economic resources shall be made available, directly or indirectly, to or for the benefit of the natural or legal persons, entities or bodies listed in Annexes IV and V’.

19.      Article 7(4) of the Regulation provides, in part, as follows:

‘The participation, knowingly and intentionally, in activities the object or effect of which is, directly or indirectly, to circumvent the measures referred to in paragraphs 1, 2 and 3 shall be prohibited.’

20.      Finally, Article 12(2) of the Regulation provides that the prohibitions set out in Articles 5(1)(c) and 7(3) are not to give rise to liability of any kind on the part of the natural or legal persons or entities concerned, if they did not know, and had no reasonable cause to suspect, that their actions would infringe those prohibitions.

21.      The entities identified in Annex IV. A to the Regulation include SHIG, with the note: ‘Other information: (a) subordinate entity of AIO, (b) involved in Iran’s ballistic missile programme’.

22.      By Resolution 1929 (2010), the Security Council expanded the scope of the restrictive measures imposed by Resolution 1737 (2006) against the Islamic Republic of Iran. In order to comply with its international obligations, the Council repealed Common Position 2007/140 on 26 July 2010. It also repealed the Regulation and replaced it with Regulation (EU) No 961/2010. (7)

C –    National legislation

23.      For infringements of acts of the Union such as the Regulation, criminal penalties, in particular a custodial sentence, may be imposed, pursuant to Article 34 of the Law on foreign trade (Außenwirtschaftsgesetz).

II –  Main proceedings

24.      Mr Afrasiabi, director of Emen Survey Engineering Co. Tehran (‘Emen Survey’), an Iranian undertaking, is said to have been asked in 2004, by the director of a secret research centre for the production of missiles, to acquire a ceramic sintering furnace on SHIG’s behalf. Through Mr Sahabi, Mr Afrasiabi is said to have entered into contact with FCT Systeme GmbH (‘FCT’ ), a German manufacturing company, and, in particular, with Mr Kessel, with whom he entered into a delivery contract.

25.      On 20 July 2006, Mr Kessel is said to have asked the Bundesamt für Wirtschaft und Ausfuhrkontrolle (Federal Office for the Economy and Control of Exports, ‘the BAFA’) to issue an export licence for the delivery of the furnace to Emen Survey, omitting to indicate that this undertaking intended to sinter nuclear missile components meant for an end user of the Iranian missiles programme. On 16 January 2007, the BAFA issued a decision according to which the export of the furnace was not subject to authorisation.

26.      As a result of the Regulation’s entering into force on 20 April 2007, SHIG was included among the entities referred to in Annexes IV and V to the Regulation. Likewise, the sintering furnace was included among the goods and the technology listed in Annex II to the Regulation whose export is subject to the obtaining of prior authorisation. Consequently, the BAFA rescinded its decision.

27.      On 20 July 2007 Mr Kessel delivered the sintering furnace to Emen Survey and, in March 2008, he seconded two technicians to Tehran (Iran) to install the furnace. Nevertheless, the technicians did not install the software necessary for commissioning the service of the furnace, this software being freely available in Iran. Emen Survey is said to have bought the sintering furnace for its own account in order to produce coatings for missile components for the benefit of SHIG.

28.      On 13 March 2008, the BAFA reportedly informed Mr Kessel that Emen Survey was suspected of making purchases on behalf of the Iranian missiles industry. Mr Kessel then refrained from making the furnace operational. In consequence, production failed to get under way.

III –  Questions referred for a preliminary ruling

29.      The referring court entertains doubts concerning the interpretation of Article 7(3) and (4) of the Regulation.

30.      First, although it says it has no objection to accepting that the technology constituted by the sintering furnace is an economic resource within the meaning of Article 1(i) of the Regulation, the referring court wonders whether, in spite of the Court of Justice’s broad interpretation of ‘making available’, it can be accepted that that resource has been made available, for the purposes of Article 7(3) of the Regulation, to an entity referred to in Annex IV to the Regulation, when, on the one hand, no substantive act has conferred on that entity power actually to avail itself of the resource, even if only of its intangible value, and when, on the other hand, such a resource remains in the possession of a third party, in this case Emen Survey, which with this resource is to manufacture other goods which are then to be forwarded to that entity.

31.      Secondly, the referring court asks whether the act in question does not constitute circumvention of the prohibition laid down in Article 7(3) of the Regulation, liable to be penalised under Article 7(4) of the Regulation. In this regard, it questions the scope of the concept of circumvention, and in particular the elements constituting it.

32.      In those circumstances, the Oberlandesgericht Düsseldorf decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1)      In order for an economic resource to be made available within the meaning of Article 7(3) of Council Regulation (EC) No 423/2007, is it necessary that it can be used immediately by the listed person/entity for the purposes of acquiring funds or services? Or must Article 7(3) of Council Regulation (EC) No 423/2007 be interpreted as meaning that the prohibition of indirectly making available an economic resource encompasses the supply and installation of an economic resource that is functional, but not yet ready for use (in this case: a vacuum furnace) to a third party in Iran, with which resource the third party intends, at a later date, to manufacture products for one of the legal persons, entities or bodies listed in Annexes IV and V to the Regulation?

(2)(a) Must Article 7(4) of Council Regulation (EC) No 423/2007 be interpreted as meaning that circumvention can occur only when the offender formally adapts his conduct – albeit only ostensibly – to the prohibitions arising from Article 7(1) to (3) of Council Regulation (EC) No 423/2007, with the result that, even if the broadest interpretation is applied, that conduct is no longer caught by the prohibitions? Are the component elements of the prohibitions of circumvention and on making available economic resources thus mutually exclusive? If the answer should be affirmative: can conduct which would not (yet) be caught by the prohibition of making economic resources (indirectly) available nevertheless constitute circumvention within the meaning of Article 7(4) of Council Regulation (EC) No 423/2007?

(2)(b)      If not, does Article 7(4) of Council Regulation (EC) No 423/2007 constitute a catch-all clause, covering any act intended to lead to an economic resource’s being made available to a listed person or entity?

(3)(a)      Does the subjective condition ‘knowingly and intentionally’ in Article 7(4) of Council Regulation (EC) No 423/2007 require, on the one hand, actual knowledge that the effect or objective of the activities is to circumvent the prohibition of making available economic resources and, in addition, a further element of intention, at least in the sense that the offender accepts at all events that circumvention of the prohibition might possibly occur? Or must the offender in fact wish to circumvent the prohibition, and thus act deliberately?

(3)(b)      If not, is it unnecessary for the prohibition to be knowingly circumvented, it instead being sufficient if the offender merely considers circumvention of the prohibition to be possible and accepts that possibility?’

33.      Observations were lodged by the parties to the dispute in the main proceedings, and by the French Republic, the Italian Republic and the European Commission as well.

IV –  Examination of the questions referred for a preliminary ruling

34.      It seems to me essential to reformulate the questions referred because my reading of Article 7 of the Regulation differs substantially from that of the referring court and the parties that have lodged observations.

35.      In fact, as I read this provision, it appears to me to comprise two separate parts.

36.      In the first part of Article 7, comprising paragraphs (1) to (3), the Regulation defines what is prohibited. Here, the Regulation prohibits the entities listed in Annexes IV and V thereto from having any funds or economic resources available to them. To that end, on the one hand, paragraphs (1) and (2) freeze existing assets and, on the other, paragraph (3) prohibits any individual from making available to those entities, in the future, any funds or economic resources.

37.      In the second part of Article 7, consisting of paragraph (4), the Regulation makes an infringement of conduct the effect of which is to render inoperative the prohibitions set forth in the paragraphs preceding it. This paragraph (4) is essential, for not everything that is prohibited is automatically punishable in criminal law. It is therefore this provision that lays down the very principle of the offence that is to be punishable under the criminal law. By its references to those paragraphs (1) to (3), paragraph (4) defines very clearly the substantive elements constituting this offence. In addition, by the use of the terms ‘knowingly’ and ‘intentionally’, it defines the element often referred to as the mental or psychological element of the offence [mens rea]. Indeed, without this element there can be no offence committed.

38.      It follows, in my view, from a reading of Article 7(4) in conjunction with and 12(2) of the Regulation that they define the conditions, both substantive and psychological, of the prohibited actions, which national criminal legislation must take into account.

39.      Accordingly, the provisions of paragraphs (3) and (4) of Article 7 of the Regulation, far from being in opposition to or excluding one another, supplement and reinforce one another, the purpose of paragraph (4) being to ensure the effectiveness of those paragraphs (1) to (3) as indicated by its wording in making reference to them. In actual fact, it is paragraph (4) that gives full force to the provisions preceding it and, in my view, paragraph 3 of this Article 7 does not constitute a separate offence any more than paragraphs 1 and 2 of the same article do.

40.      To my mind, therefore, any conduct such as that described in paragraph (4) of this article constitutes infringement of Article 7 of the Regulation.

41.      Moreover, I observe that this drafting structure forms part of the scheme of the Regulation, since the same technique is to be found in Articles 2(b) and 5(1)(d). Thus, the EU legislature indicates to the Member States precisely that it intends the regulatory framework to be reinforced by criminal penalties which are for the Member States to determine, in accordance with Article 16 of the Regulation. This technique of separating legal rules governing actions from those relating to penalties is standard in the field of the legislation concerned.

42.      At paragraph 45 of his observations, the Generalbundesanwalt indicates that the normative content of the Regulation forms an integral part of the national penal provisions, infringement of the latter being punishable by a sentence of imprisonment. Consequently, this being a case of the integration of the rule of Union law by means of the reference made to it by domestic law, in actual fact the national court requests the Court to define terms constituting the substantive elements, on the one hand, and the psychological elements, on the other, of the offence prosecuted by the Generalbundesanwalt.

43.      The definitions requested, it seems to me, must relate to the following terms. Does delivery of the sintering furnace in the circumstances described constitute ‘indirectly making available an economic resource’? What constitutes ‘circumventing’ of the measures referred to in Article 7(1) to (3) of the Regulation? To what ‘subjective’ requirements of the offence do the terms ‘knowingly’ and ‘intentionally’ correspond?

44.      These definitions requested must be interpreted given an autonomous and uniform interpretation throughout the Union. Indeed, the Regulation applies in a harmonised area and refers to the laws of the Member States only with regard to the laying down of the rules on penalties applicable to infringement of the measures it enacts. (8)

45.      In addition, the search for the meaning and effect of the concepts to be defined must, first and foremost, take into account the penal context of which they form part. With regard to the criminal sphere, the provisions in which these notions appear must be specific and clear enough to ensure observance of the general principles of the law of the Union and, in particular, the principle of legal certainty and the principle nullum crimen, nulla poena sine praevia lege poenali [no crime and no penalty without a previous penal law]. (9)

46.      Lastly, the necessary interpretation must be purposive in order to seek and express the ratio legis of the provision whose effectiveness Article 7(4) of the Regulation is intended to ensure. This method of interpretation is traditionally accepted, interpretation by analogy being, in contrast, strictly prohibited here because by its imprecision it infringes the principle that there must be a basis in law for all crimes and punishments.

47.      In this instance, the aim pursued by the law, that is to say, the Regulation, instrument of harmonisation par excellence, is perfectly clear. It is to put an end to the activities carried out by the Islamic Republic of Iran for the purpose of building up nuclear armaments, capable of being used for military purposes or of being disseminated. Article 7 of the Regulation must therefore prevent acts or conduct that would, or would be likely to, jeopardise the peace of a part of the world or of the entire planet and cause massive human destruction that could be classed as genocide, whether that result were specifically sought or recklessly allowed by the attitude of the perpetrator. In addition, because the offender’s conduct evolves, it is essential that this provision be flexible enough to keep step with the imagination of those who, by various ruses, in particular legal ones, will attempt to conceal the true purpose of their business.

48.      To attain those ends, it is therefore not only legitimate but also essential that the definitions requested be interpreted broadly, because it is necessary not only to punish what has been done, but also to prohibit everything that can be imagined for the purpose of circumventing the law and exploiting loopholes in the system.

A –    The interpretation of the concept of ‘indirectly making available’ in Article 7(3) of the Regulation

49.      ‘Indirectly making available’ is used in Article 7(3) of the Regulation and Article 5(2) of Common Position 2007/140. It does not, however, appear in the text of paragraph 12 of Resolution 1737 (2006).

50.      The concept of making available was interpreted by the Court in its judgments in Möllendorf and Möllendorf-Niehuus (10) and E and F. (11) These were two references for a preliminary ruling concerning the interpretation of measures adopted with a view to combating terrorism, worded in terms identical to those in Article 7(3) of the Regulation.

51.      In these judgments, the Court gave ‘making available’ a broad interpretation, encompassing any act that must be completed in order to enable a person, a group or entity referred to actually to obtain the power to dispose freely of funds, other financial assets or of economic resources. (12)

52.      In other words, the concept of making available covers any transfer of property.

53.      In the case giving rise to the judgment in Möllendorf and Möllendorf-Niehuus, the Court thus held that the definitive entry in the land register, of a transfer of ownership of a property to an entity referred to constituted making available prohibited by the regulatory provisions in question in this case. In E and F, the Court held similarly in regard to the fact that a member of a listed organisation transfers to it funds from the collection of donations and sales of publications.

54.      The Court has not yet had the opportunity of ruling on the concept of indirectly making available funds or economic resources.

55.      In my opinion, this concept makes it possible, first and foremost, to respond to alterations in the offender’s behaviour and, in particular, to any act of concealment. Indeed, once making funds or economic resources available to a listed entity is prohibited, that entity will hide behind fictitious natural persons or shell companies in order to gain access to sources of funding, using ever more sophisticated means within the proliferation networks. Any transfer of funds and economic resources that, whoever the person to whom they are actually passed may be, may or is likely to benefit such an entity is, plainly, a fraudulent mechanism that must be totally prohibited.

56.      The national court must, within its sovereign assessment of the facts, examine all the elements marking the existence of close links between the entity to which the funds or economic resources have been released and the entity referred to in Annexes IV and V to the Regulation. This assessment must be made on a case-by-case basis and the evidence can be of very varied nature, related, for example, to the holding of capital, to the composition of the management bodies, to the nature of the trade or to the existence of contractual relations.

57.      Thus, within the framework of the operation in question in this case, it is not inconceivable that Emen Survey acted on behalf of or under the direction of SHIG so as to circumvent the restrictive measures adopted against the latter. In fact, I note from the reading of the indictment and the observations of the Generalbundesanwalt that Mr Afrasiabi occupied a position as a director of SHIG from 1996 to 2003, before directing Emen Survey. (13) I learn, also, that he was instructed by the director of a secret research centre for the production of missiles to acquire a sintering furnace on behalf of SHIG, which had already tried to purchase equipment from FCT. I note too that Mr Afrasiabi acquired the sintering furnace in order to produce missile components for the benefit of SHIG and the Iranian missile industry. (14)

58.      It will be for the national court to assess the probative value of each of these matters, together with the documents available to it in the national file.

59.      Having regard to those matters, I believe, therefore, that the concept of ‘indirectly making available’ in Article 7(3) of the Regulation must be understood to cover delivering a sintering furnace to an Iranian undertaking and installing it, when that undertaking is acting within the context of a fraudulent set-up intended to conceal the actual recipient of the economic resource, referred to in Annexes IV and V to the Regulation.

60.      It is for the national court to examine, case by case and in its sovereign assessment of the facts, all the factors marking the existence of close links between the entity to which the funds or economic resources have been released and the entity referred to in Annexes IV and V to the Regulation.

B –    Interpretation of the term ‘economic resource’ in Article 7(3) of the Regulation

61.      In this case, I understand that the sintering furnace is not operational, for the software necessary to its commissioning has not been installed, and that therefore no missile component coating has been produced. The question thus arises whether SHIG is in a position to avail itself, most specifically, of an ‘economic resource’, within the meaning of Article 7(3) of the Regulation.

62.      First, ‘economic resource’ has a very broad meaning, as revealed by the choice of words used by the EU legislature.

63.      Indeed, in accordance with Article 1(i) of the Regulation, ‘economic resource’ means assets of every kind, [(15)] whether tangible or intangible, movable or immovable, which are not funds but which may be used to obtain funds, goods or services’. (16)

64.      The concept of economic resource covers not only all assets, of whatever type, but also the use to which they may be put. The EU legislature refers, therefore, to all assets that, in one way or another, may enable the recipient to obtain funds or services or may be employed in connection with the design of a nuclear weapon, which includes, therefore, all tangible and intangible assets as well as all available technology.

65.      This definition corresponds, in fact, to the very broad approach adopted by the United Nations. (17)

66.      It is obvious that the sintering furnace constitutes, as such and irrespective of its commissioning, an ‘economic resource’, within the meaning of the terms of Article 1(i), of the Regulation. It is a means of production intended for the manufacture of components likely to contribute to the design and development of a nuclear weapon. Whether or not the software necessary for its commissioning has been installed, it is advanced technology for the acquisition of which Emen Survey paid the sum of EUR 850 000, under the terms of the delivery contract concluded with FCT. (18) Access to such sophisticated technology obviously powers the activities of research and development and makes it possible not only to obtain funds but also to use the technology for purposes other than civilian.

67.      Secondly, this interpretation is necessary in view of the objectives sought by the EU legislature. Indeed, it is imperative that the concept of economic resource be defined as widely as possible if the new forms of proliferation are to be taken into consideration. We must abandon the idea that the States in search of nuclear weapons rely on conventional supply procedures. Given the globalisation of trade, both tangible and intangible, the gradual liberalisation of international trade and technical and industrial developments, the acquisition of sensitive materials and technology becomes virtual and is given form by ever more sophisticated means. With regard to equipment, ‘economic resource’ must not cover only equipment in an operational state. It must also include basic components and spare parts which, taken together, allow the listed entity to obtain plant or a source of funding. It must also cover every technology that gives access to, and control of, the process, such as software, drawings, plans, models or technological know-how such as assembly instructions and descriptions. In fact, each of these technologies is, in itself, sufficient to allow a listed entity to use it for strategic or commercial purposes.

68.      Consequently, in my view, whether or not the sintering furnace in issue in this case is operational is unimportant. Irrespective of the installation of the software necessary to the commissioning of this furnace, the technology it represents is sufficient to secure for SHIG a source of income and allow its use in connection with that undertaking’s nuclear activities.

69.      Thirdly, that interpretation is not called into question by the distinction drawn by the EU legislature in Article 1 of the Regulation between the concept of ‘technology’ and that of ‘economic resource’, a distinction relied on by Mr Kessel in his observations. Article 1(d) of the Regulation states that ‘the term “technology” includes software’. In accordance with Annex II. B to the Regulation, this is ‘[t]echnology required for the development, production or use of the items [referred to in Annex II. A to the Regulation]’, which include the sintering furnace.

70.      According to Mr Kessel, this distinction assumes that technology is excluded from the concept of ‘economic resource’ under Article 7(3) of the Regulation.

71.      I do not share that view. That distinction is accounted for solely by the scope and diversity of the restrictive measures adopted in the framework of the Regulation.

72.      Indeed, the concept of technology is used in the embargo imposed in Articles 2 to 6 of the Regulation. A trade embargo is laid down, prohibiting or limiting the sale, supply, transfer, or export to Iran of goods and technology likely to strengthen its nuclear potential. The EU legislature must therefore show precision with regard to the goods concerned, since the object is to prevent their free movement and their being sold to a particular State. In this case, the legislature expressly refers to what are known as ‘dual-use’ goods and technology, covered by Regulation No 1334/2000, as amended by Regulation No 394/2006.

73.      As for the term ‘economic resource’, it is used in measures freezing the assets of the entities referred to in Annexes IV and V to the Regulation. I recall that this is a financial sanction with the objective of weakening the economic potential of listed entities by preventing them from gaining access to economic or financial resources, of whatever kind. (19)

74.      The prohibition laid down in Article 7(3) of the Regulation therefore concerns all resources that, if directly or indirectly made available to an entity referred to in Annexes IV and V to the Regulation, entail, of themselves, the risk of their being misappropriated in favour of the financing of the Iranian nuclear programme, or are in any way capable of being used in the design, development, manufacture or use of a nuclear weapon. In order to ensure the consistency of the sanctions regime, this prohibition must, of course, include not only all the goods, but also all the technology, affected by the embargo.

75.      Having regard to those factors, I am of the opinion that the term ‘economic resource’, in Article 7(3) of the Regulation, must therefore be understood to mean that it encompasses a sintering furnace, whether or not the software necessary for it to be brought into operation has been installed.

C –    Interpretation of the term ‘circumvent’ in Article 7(4) of the Regulation

76.      Article 7(4) of the Regulation provides that ‘participation, knowingly and intentionally, in activities the object or effect of which is, directly or indirectly, to circumvent the measures referred to in paragraphs 1, 2 and 3 [of the same article] shall be prohibited’. (20)

77.      To circumvent the law is to infringe it by any means, including dissimulation, used to avoid, evade or frustrate the prohibitions laid down by the legislation. In the context of Article 7(4) of the Regulation it is circumvention to adopt a line of conduct leading to an outcome absolutely contrary to the purpose pursued by that article. In other words, the EU legislature refers to any kind of conduct allowing a listed entity to possess funds or economic resources, in breach of the prohibitions laid down in Article 7(1) to (3) of the Regulation. The nature of the activity in which the individual was involved and the extent to which he contributed to the commission of the offence are unimportant.

D –    Interpretation of the terms ‘knowingly’ and ‘intentionally’ in Article 7(4) of the Regulation

78.      In Article 7(4) of the Regulation, the EU legislature requires the individual to have acted ‘knowingly’ (‘wissentlich’ or ‘sciemment’) and ‘intentionally’ (‘vorsätzlich’ or ‘volontairement’). Thus it defines the psychological element of the offence. These terms are taken from the version in German, which is the language of the case in this instance, and from the version in the French language.

79.      It is necessary to determine the nature of the psychological element (or subjective element in the terms used by the referring court) required by the law for the offence to be established from that angle.

80.      As the referring court notes, there are some terminological differences. The Spanish-language version uses the terms ‘consciente’ and ‘deliberada’, the English, ‘knowingly’ and ‘intentionally’, the Italian, ‘consapevolmente’ and ‘deliberatamente’, the Portuguese, ‘consciente’ and ‘intencional’, the Romanian, ‘voluntară’ and ‘deliberată’, and the Slovak, ‘vedomá’ and ‘úmyselná’. Under the language versions of Article 7(4) of the Regulation, the term ‘volontairement ‘is therefore rendered by the words ‘intentionally’ or ‘deliberately’, without distinction. (21)

81.      The terms ‘intentionally’ and ‘knowingly’ must be interpreted in an autonomous and uniform manner throughout the Union and their meaning must, first and foremost, be sought taking into account the principle of the autonomy of the criminal law and of its general principles.

82.      These general principles on the one hand require conditions to be met, regardless of the type of offence in question and on the other hand, depending on the provisions of the criminal legislation, they lay down conditions that may be particular to a certain type of conduct which is made a specific offence.

83.      It is a requirement of those general conditions that, in the commission of any censurable act, the offender should have acted in full awareness and of his own free will, that is to say, that his awareness and will should not have been overborne by mental disorder and/or constraint.

84.      Ex hypothesi, I consider that this essential precondition, while not expressed, is implicitly, but necessarily, understood. In fact, although the condition is not made explicit by the wording of the legislation, the enacting terms as a whole would be contrary to the fundamental rights granted to individuals both by international conventions and by the Charter of Fundamental Rights of the European Union, if that condition were to be disregarded.

85.      The terms ‘intentionally’ and ‘knowingly’ designate therefore the mental element inherent in the offence here specifically penalised, as expressed by the legislation providing the basis for the offence, in accordance with the requirement of precision demanded by the principle of the legality of the criminal law.

86.      Classic penal theory distinguishes two main types of culpability, namely, intentional fault, which, in its narrow sense, consists in the perpetrator’s pursuing an objective specifically forbidden by law, and fault committed through carelessness or negligence. Accordingly, it is by referring to the wording of the legislation that we must determine which of these types of culpability is or are required here when the terms ‘intentionally’ and ‘knowingly’ are used.

87.      Whatever the degree of vagueness revealed by the various language versions of these terms, the wording of Article 7(4) of the Regulation allows us to conclude that the EU legislature intended to penalise both types of culpability.

88.      First, intentional fault as I have just defined it. This is the meaning of the expression used by the EU legislature uses when it refers to ‘the object’ of any activity.

89.      Next, the fault of carelessness or negligence. As shown by the use of the phrase ‘the effect is’, the EU legislature also makes an infringement of the activity that led to the result obtained, even if the latter was not brought about intentionally. Here, the penal provision contemplates conduct expressing disregard for the laws of society, in the form of carelessness or negligence leading to the prohibited outcome.

90.      Therefore, an analysis of Article 7(4) of the Regulation leads me to the view that the terms ‘intentionally’ and ‘knowingly’ include both intentional fault and the fault of carelessness or negligence.

91.      This interpretation seems to me to be confirmed by Article 12(2) of the Regulation which provides that ‘[T]he prohibitions set out in Articles ... 7(3) shall not give rise to liability of any kind on the part of the natural or legal persons or entities concerned, if they did not know, and had no reasonable cause (22) to suspect, that their actions would infringe these prohibitions’.

92.      This text means, implicitly but necessarily, that, if those persons and entities had such reasonable cause, they would not be relieved from liability. This is tantamount to requiring of them a minimum of regard for the laws of society obliging them to determine whether their action is legal and, if it is not, to refrain from it. Whether or not there is reasonable cause depends on conditions specific to the person concerned, relating, for example, to the nature of his professional activity, his qualifications, the international framework in which he operates or the sensitive nature of the technology transferred.

93.      The characteristic feature of disregard for society’s laws is breach of the duty of care owed by the person or entity or failure to take those precautions that they should ordinarily have taken. On that basis, he who, objectively, is likely to bring about the prohibited situation is penalised, at least if that situation does come about.

94.      It is therefore the cumulative action of Articles 7(4) and 12(2) of the Regulation that determines, with the requisite precision, the degree of carelessness or negligence required to establish culpability.

95.      In this case, Mr Kessel was perfectly well aware that he was committing an act contrary to the Regulation. Plainly, he had reasonable cause for suspecting that the delivery of the sintering furnace would allow a listed entity to benefit from an economic resource. Indeed, it is clear from the evidence in the file that Mr Kessel was informed of Emen Survey’s intending to sinter components for nuclear missiles intended for a listed entity and for the Iranian missiles industry. For all that, he remained determined to participate in this operation, delivering the sintering furnace on 20 July 2007 and providing, during the spring of 2008, technical assistance for the installation of this furnace, and all this after the Regulation entered into force. It was therefore in full knowledge of the facts and quite voluntarily that Mr Kessel engaged in conduct contrary to the restrictive measures adopted in Article 7 of the Regulation.

96.      Having regard to those matters, I believe that the terms ‘intentionally’ and ‘knowingly’ in Article 7(4) of the Regulation must be interpreted as applying to any individual acting with full awareness and of his own free will, conditions of the same nature as those for all criminal liability, who acts either deliberately with the intention of infringing the prohibitions laid down in Article 7(1) to (3) of the Regulation or through carelessness or negligence although he had reasonable cause to suspect that his actions would contravene those prohibitions.

V –  Conclusion

97.      In the light of the foregoing considerations, I propose that the Court give the following answers to the questions referred for a preliminary ruling by the Oberlandesgericht Düsseldorf:

(1)(a) Article 7(3) of Regulation (EC) No 423/2007 of the Council of 19 April 2007 concerning restrictive measures against Iran must be interpreted as precluding the delivery of a sintering furnace to an Iranian undertaking and its installation, when that undertaking is acting within the context of a fraudulent set-up intended to conceal the actual recipient of the economic resource, referred to in Annexes IV and V to the Regulation, thus amounting to the circumvention referred to and prohibited by Article 7(4) of the Regulation. It is for the national court to consider, case by case and in its sovereign assessment of the facts, all the factors indicative of the existence of close links between the entity to which the funds or economic resources have been released and the entity referred to in Annexes IV and V to the Regulation.

(1)(b) The term ‘economic resource’ in Article 7(3) of Regulation No 423/2007 must be interpreted as covering a sintering furnace, irrespective of whether the software necessary for it to be brought into operation has been installed.

(2)(a) The term ‘circumvent[ion]’ in Article 7(4) of this Regulation must be interpreted as designating the conduct, whatever it may be, of any individual who participates in an activity the object or effect of which is to infringe the prohibitions laid down in paragraphs 1 to 3 of that article.

(2)(b) The terms ‘intentionally’ and ‘knowingly’ in Article 7(4) of Regulation No 423/2007 must be interpreted as applying to any individual acting with full awareness and of his own free will, conditions of the same nature as those for all criminal liability, who acts either deliberately with the intention of infringing the prohibitions laid down in Article 7(1) to (3) of the Regulation or through carelessness or negligence although he had reasonable cause to suspect that his actions would contravene those prohibitions.

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1 – Original language: French.

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2 – Council Regulation of 19 April 2007 concerning restrictive measures against Iran (OJ 2007 L 103, p. 1, ‘the Regulation’).

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3 – Treaty opened for signature in London, Moscow and Washington on 1 July 1968 (Compendium of United Nations treaties, vol. 729, p. 161).

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4 – See ‘Study by Raoul Dandurand no. 21, Lewis, I. “Nuclear proliferation by and for the benefit of non-State actors – Preventing the threat”’. See also note of the Fondation pour la Recherche Stratégique, Schlumberger, G., and Gruselle, B., ‘Pour une politique cohérente de lutte contre les réseaux de prolifération’, 4 January 2007; Fondation pour la Recherche Stratégique, Recherches & Documents, Gruselle, B., ‘Réseaux et financement de la prolifération’, 3 March 2007, and the note of the Fondation pour la Recherche Stratégique, Gruselle, B., ‘Quelle politique de sanctions face à la prolifération ?’, 28 June 2007.

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5 – Common Position of the Council of 27 February 2007 concerning restrictive measures against Iran (OJ 2007 L 61, p. 49).

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6 – See Council Regulation (EC) No 1334/2000 of 22 June 2000 setting up a Community regime for the control of exports of dual-use items and technology (OJ 2000 L 159, p. 1), as amended by Council Regulation (EC) No 394/2006 of 24 February 2006 (OJ 2006 L 74, p. 1).

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7 – Council Regulation of 25 October 2010 on restrictive measures against Iran and repealing Regulation (EC) No 423/2007 (OJ 2010 L 281, p. 1).

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8 – Article 16(1) of the Regulation.

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9 – Case C-340/08 M and Others [1998] ECR I-3913, paragraphs 64 and 65 and case-law cited.

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10 – Case C-117/06 [2007] ECR I-8361. The judgment concerns the interpretation of Article 2(3) of Council Regulation (EC) No 881/2002 of 27 May 2002 imposing certain specific restrictive measures directed against certain persons and entities associated with Usama bin Laden, the Al-Qaida network and the Taliban, and repealing Council Regulation (EC) No 467/2001 prohibiting the export of certain goods and services to Afghanistan, strengthening the flight ban and extending the freeze of funds and other financial resources in respect of the Taliban of Afghanistan (OJ 2001 L 139, p. 9), as amended by Regulation (EC) No 561/2003, of 27 March 2003 (OJ 2003 L 82, p. 1).

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11 – Case C-550/09 [2010] ECR I‑6213. The judgment concerns the interpretation of Article 2(1)(b) of Council Regulation (EC) No 2580/2001 of 27 December 2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism (OJ 2001 L 344, p. 70).

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12 – See judgments in Möllendorf and Möllendorf-Niehuus (paragraphs 50 and 51) and E and F (paragraphs 66 and 67).

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13 – I note, however, from paragraph 12 of the observations lodged by Mr Kessel, that Emen Survey is not under the control of SHIG, which holds neither the majority of the share capital of Emen Survey nor any special rights.

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14 – Paragraphs 1, 9, 11, 12 and 17 of the order for reference.

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15 – Emphasis added.

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16 – See, by analogy, the judgment in E and F (paragraph 69).

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17 – In fact, in an information document of 11 September 2009 entitled ‘Freezing Assets: Explanation of Terms’ (available on the internet site of the United Nations at http://www.un.org/sc/committees/1267/usefulpapers.shtml), the Sanctions Committee of the Security Council defined ‘economic resources’ as extending to ‘assets of every kind, whether movable or immovable, tangible or intangible, actual or potential, which are not funds but potentially may be used to obtain funds, goods or services’, such as land, buildings, equipment, including computers, computer software, tools, and machinery, furniture, works of art, precious stones, jewellery, gold, commodities, arms, intellectual property rights and even internet hosting services and any other assets, whether tangible or intangible, actual or potential.

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18 – I understand from the observations lodged by the Generalbundesanwalt that the contract concluded by Mr Kessel and Mr Afrasiabi was for the supply and installation of a sintering kiln designed by FCT but did not include the installation of the software supplied by that undertaking, that software being freely obtainable in Iran.

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19 – See, by analogy, judgment in M and Others, above (paragraph 52 and case-law cited).

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20 – Common Position 2007/140 and Resolution 1737 (2006) contain no equivalent provision (with the exception of Article 1(2)(c), of the Common Position on the embargo measures), so that the scope of Article 7(4) of the Regulation can be determined only by analysis of the Regulation.

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21 – I know that, in accordance with settled case-law, the various language versions of EU legislation must be interpreted uniformly. Therefore, if these versions differ, it is necessary to interpret Article 7(4) of the Regulation not only according to the general structure and purpose of the Regulation, but also in the light of the text and object of Resolution 1737 (2006) (judgment in M and Others, paragraph 44 and case-law cited).

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22 – Emphasis added.