Contract analysis

I. Executive Summary This memorandum analyzes the application of the Export Administration Regulations (EAR), 15 C.F.R. Parts 730–774, to oilfield drilling equipment and components exported by Dunmore Trading International Ltd. ("DTI"), DIFC License No. CL-4827, through Caspian Logistik GmbH ("Caspian Logistik"), a Hamburg-based logistics intermediary, to end users in the Russian Federation between approximately Augu

II. Background A. The DOJ Inquiry and Grand Jury Subpoena On April 19, 2022, the U.S. Department of Justice National Security Division, Counterintelligence and Export Control Section (CES), issued grand jury subpoena GJ No. 22-418 from the U.S. District Court for the District of Columbia (Grand Jury 22-2). The subpoena was served on Dunmore Energy Holdings Ltd. ("DEH") through its registered agent for service of proc

III. Applicable Regulatory Framework A. Export Control Reform Act of 2018 (ECRA) The Export Control Reform Act of 2018 (ECRA), codified at 50 U.S.C. §§ 4801–4852, is the primary authorizing statute for the Export Administration Regulations. ECRA was enacted as part of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Pub. L. 115-232) and replaced the now-expired Export Administration Act of

Section 746.5 of the EAR, codified at 15 C.F.R. §746.5, imposes license requirements on exports, reexports, and transfers (in-country) of items subject to the EAR to Russia and Belarus. This section has undergone significant expansion and amendment, particularly in February and March 2022, following Russia's invasion of Ukraine. The regulatory history of §746.5 is important to understanding its application to the con

IV. Analysis of DTI's Oilfield Equipment Shipments A. Shipment Inventory and Classification Based on our preliminary review of shipping documents, invoices, bills of lading, and related records collected from DTI's Dubai office and Dunmore Renewables GmbH's Hamburg office, we have identified the following: The total value of shipments across multiple consignments during the period from August 2020 to January 2022 is

V. Potential Violations Identified A. EAR §746.5 Violations — Unlicensed Exports/Reexports to Russia Based on the analysis set forth above, each shipment of items classified under ECCN 2B350 or ECCN 2B999 to Russia without a BIS license constitutes a separate violation of EAR §746.5. No person may export or reexport items subject to the EAR and classified under these ECCNs to Russia without first obtaining a license

VI. Individual Exposure Assessment A. Derek Hargrave Derek Hargrave served as President of DTI during the entire conduct period and exercised supervisory authority over the DTI trading desk. As President, Hargrave had both the authority and the responsibility to approve major transactions, including the oilfield equipment shipments at issue. Preliminary evidence suggests that Hargrave was aware that the equipment shi