Contract analysis

I. MATTER SUMMARY Calderwood & Harkness LLP ("Calderwood & Harkness" or the "Firm"), with offices at 400 Park Avenue, 28th Floor, New York, New York 10022, was engaged on August 14, 2023, to represent Dunmore Energy Holdings Ltd. ("DEH" or the "Company"), a Cayman Islands exempted company limited by shares, registered at 4th Floor, Harbour Place, 103 South Church Street, George Town, Grand Cayman KY1-1002, with its p

II. CHRONOLOGY OF KEY EVENTS The following chronology sets forth the material events relevant to this matter, from the initial onboarding of Caspian Star as a DTI counterparty through the final resolution by OFAC and closure of the matter. A. Counterparty Onboarding and Initial Screening (July 2021) July 8, 2021: Caspian Star Commodities DMCC was onboarded as a counterparty of DTI. KYC documentation was collected by

III. RESOLUTION A. OFAC Determination OFAC resolved Case No. VS-1014-00001 by issuing a cautionary letter dated February 21, 2024, addressed to DEH. No civil monetary penalty was imposed. The actual penalty amount is $0. OFAC determined that the apparent violations were non-egregious, meaning that OFAC concluded that the conduct at issue did not constitute a flagrant, willful, or reckless violation of U.S. sanctions

1. Voluntary Self-Disclosure. Dunmore self-reported the apparent violations to OFAC promptly after discovery and engagement of outside counsel, prior to any indication that OFAC had independently identified the subject transactions. OFAC's Enforcement Guidelines afford significant weight to the fact that a party voluntarily comes forward, as self-disclosure is a critical component of OFAC's enforcement framework and

2. No Actual Knowledge. Neither DEH nor DTI had actual knowledge of Kadyrov's beneficial ownership of Caspian Star at the time the subject transactions were executed. Kadyrov's ownership was concealed through a network of nominee shareholders, and the publicly available information — including DMCC corporate registry data and KYC documentation provided by Caspian Star — consistently identified Mammadov as the sole ow

3. Inadvertent Conduct. The subject transactions were routine physical commodity trades executed in the ordinary course of DTI's business. There was no evidence that any DEH or DTI personnel intended to evade U.S. sanctions, and the transactions were conducted openly and documented in the normal course of DTI's trading operations.

4. Prompt Remedial Action. DTI blocked all dealings with Caspian Star within three (3) business days of Mr. Huang's discovery of the SDN link on June 2, 2023. The Company took immediate and decisive action to prevent any further transactions or financial dealings with the designated entity.

5. No Direct Benefit to SDN. All payments for the subject transactions were made to Caspian Star's corporate account at Emirates Gulf Commercial Bank in Dubai. OFAC's investigation did not reveal evidence that Kadyrov personally received any of the funds associated with the subject transactions, although OFAC did not make a definitive determination on this point.

6. Comprehensive Compliance Enhancements. Dunmore implemented a comprehensive suite of remedial measures prior to and during the pendency of the OFAC proceedings, including technology upgrades, the hiring of a dedicated Sanctions Compliance Officer, policy updates, enhanced screening protocols, third-party review engagements, and mandatory training. These measures are described in detail in Section V of this memorand

7. Full Cooperation. Dunmore provided extensive documentation throughout the OFAC proceedings and responded to OFAC's supplemental information request within twenty-three (23) days — seven days before the thirty-day deadline — demonstrating a commitment to full transparency and cooperation with the enforcement process. D. Significance of Timing Gap The cautionary letter also noted, as relevant context, the timing gap

IV. ROOT CAUSE ANALYSIS Calderwood & Harkness's internal investigation identified the following root causes for the apparent violations: Timing of Onboarding Relative to Designation. DTI's onboarding screening of Caspian Star was conducted in July 2021, approximately eight months before OFAC's March 18, 2022 designation of Kadyrov as an SDN. At the time of onboarding, Kadyrov was not designated by OFAC, the European

V. COMPLIANCE ENHANCEMENTS IMPLEMENTED During the course of this engagement, DEH and DTI implemented a comprehensive suite of remedial measures designed to address the root causes identified in Section IV and to strengthen the Company's sanctions compliance framework. All of the following measures were described in detail in the VSD filing and supplemental submission to OFAC, and OFAC credited these enhancements as a

1. Screening Technology Upgrade DTI migrated from HCS ScreenPro Version 4.2.3 to Version 5.0, the latest version of the Harborview Compliance Solutions screening platform. Version 5.0 includes a significantly enhanced beneficial ownership module that incorporates third-party corporate intelligence data feeds from Meridian Corporate intelligence Ltd. ("Meridian"), a London-based corporate intelligence firm, for indepe

2. Third-Party Manual Review DTI engaged Omnivael Global Advisors LLC ("Overwatch"), located in Arlington, Virginia, to conduct quarterly manual reviews of all counterparties rated "Elevated Risk" or higher under DTI's counterparty risk classification framework. Overwatch's scope of work includes independent verification of beneficial ownership, adverse media screening, and cross-referencing of counterparty informati

3. Dedicated Sanctions Compliance Officer DTI hired Kira Petrossian as its dedicated Sanctions Compliance Officer, based in the London office. Ms. Petrossian has extensive experience in sanctions compliance, having previously served in senior compliance roles at two major international commodity trading firms. Ms. Petrossian reports directly to both the DTI Managing Director (Gregor Albrecht) and the DEH Chief Compli

4. Policy Updates DTI updated its Global Sanctions Compliance Policy from Version 3.2 to Version 4.0, which became effective on November 1, 2023. The updated policy incorporates the following key enhancements: (a) Quarterly Re-Screening: The counterparty re-screening interval has been reduced from annual to quarterly, ensuring that all active counterparties are rescreened against updated sanctions lists at least four

5. Training. Mandatory sanctions compliance training was completed for all DTI trading desk personnel, compliance staff, and senior management — a total of fifty-six (56) employees — between August 14 and October 31, 2023. The training program was developed in consultation with Calderwood & Harkness and covered the following topics: (a) Overview of OFAC sanctions programs, with particular emphasis on the RUSSIA-EO140

6. Centralized Recordkeeping DTI initiated the implementation of a centralized compliance recordkeeping system for all counterparty onboarding files, screening results, re-screening logs, escalation records, and training certifications. The system is designed to consolidate compliance documentation that was previously maintained across multiple platforms and filing systems, enabling efficient retrieval and comprehens

VI. TRANSACTION SUMMARY TABLE The following table summarizes the five subject transactions between DTI and Caspian Star Commodities DMCC: All five payments were settled in United States dollars via wire transfer through Ridgeline National Bank, N.A. (Houston, Texas) to DTI's USD-denominated account (Account No. XXXX-XXXX-7831) from Caspian Star's account at Emirates Gulf Commercial Bank, Dubai. In each case, Ridgelin

VII. FEES AND COSTS Calderwood & Harkness LLP's fees and costs for this engagement are summarized below. Engagement Letter: Executed August 14, 2023. Fee Structure: Hourly rates as set forth in the engagement letter: • Partner: $1,250 per hour • Associate: $725 per hour • Paraprofessionals: $350 per hour Original Estimated Budget: $350,000 – $450,000 Summary of Fees and Costs: Disbursements included OFAC compliance d

VIII. RECORD RETENTION Calderwood & Harkness recommends that the Company retain all documents related to this matter for a minimum of five (5) years from the date of the cautionary letter, i.e., until at least February 21, 2029. This recommendation is consistent with OFAC's recordkeeping requirements under 31 C.F.R. § 501.601, which requires that persons subject to OFAC's jurisdiction maintain full and accurate recor

IX. CONTINUING OBLIGATIONS The Company's attention is directed to the following continuing obligations and considerations arising from the resolution of this matter: OFAC Enforcement Record. The cautionary letter dated February 21, 2024 is part of DEH's OFAC enforcement record. While the cautionary letter does not constitute a finding of violation and carries no monetary penalty, it could be considered as an aggravat

X. CONFIRMATION OF MATTER CLOSURE This matter is now closed. Calderwood & Harkness LLP has completed all work within the scope of its engagement in connection with OFAC Case No. VS-1014-00001 (C&H Matter No. 1016-00007). The VSD has been resolved by OFAC through the issuance of a cautionary letter with no civil monetary penalty. All invoices for professional fees and costs have been submitted, and the final invoice (