THE BOTTOM LINE
- Expanded Liability: Your company can be found guilty of illegal exportation even if your goods never leave your domestic warehouse and you don’t handle the shipping.
- “Willful Blindness” is No Defense: Selling a large quantity of regulated goods to a person you know is from abroad can be enough to establish criminal intent for exportation. The court assumes you knowingly accept the substantial risk of the goods crossing the border.
- Strengthen Your Due Diligence: This ruling underscores the critical importance of robust “Know Your Customer” (KYC) protocols, especially for businesses dealing in controlled or dual-use goods, to avoid being implicated in the illegal activities of your clients.
THE DETAILS
In a pivotal opinion, the Netherlands’ highest court has clarified the scope of liability for illegal exportation. The case involved a Dutch national who sold a significant quantity of soft drugs to a German individual within the Netherlands. The seller was charged not just with dealing, but with “bringing the goods outside the territory of the Netherlands,” i.e., illegal export. The defense argued that since the transaction and handover occurred entirely within the Netherlands, the seller could not be guilty of exportation. The court soundly rejected this narrow interpretation.
The court’s reasoning hinged on the legal principle of “conditional intent” (in Dutch, voorwaardelijk opzet). This concept holds that if a person is aware of a substantial risk that their actions will lead to a particular illegal outcome, and they proceed anyway, they are deemed to have legally intended that outcome. In this case, evidence from tapped phone calls showed the seller knew the buyer was German, arranged a hotel for him in the Netherlands, discussed payment in German Marks, and sold a quantity far too large for personal use. The seller, therefore, knowingly accepted the obvious and substantial risk that the buyer’s sole purpose was to transport the goods back to Germany.
While this case involves narcotics, its implications for corporate compliance are profound. It serves as a stern warning to any business involved in the sale of regulated or sensitive goods, such as chemicals, advanced technology, or items subject to sanctions. The ruling implies that merely completing a domestic sale is not enough to insulate a company from export-related offenses. If red flags indicate a high probability of illegal export by a customer, ignoring them could lead to corporate criminal liability. This reinforces that a company’s responsibility extends into its supply chain, demanding diligent vetting of customers and a clear understanding of the end-use of its products.
SOURCE
Parket bij de Hoge Raad
