Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze the compliance failures and supervisory deficiencies attributable to Gerald Fisk, former Chief Compliance Officer of Dunmore Energy Holdings Ltd. ("Dunmore" or "DEH"), during the period relevant to the Department of Justice inquiry — specifically, from March 2020 through Fisk's departure from the company on June 10, 2022. Fisk served as CCO based at Du

II. Background — Gerald Fisk's Tenure and Responsibilities A. Role and Reporting Structure Gerald Fisk served as Chief Compliance Officer of Dunmore Energy Holdings Ltd. from approximately 2017 through June 10, 2022. Throughout his tenure, Fisk was based in Houston, Texas, at Dunmore's operational headquarters located at 1200 McKinney Street, Suite 3400. Fisk reported directly to General Counsel Marcus Wellbourne and

III. Identified Compliance Failures The investigation has identified five principal categories of compliance failures attributable to Fisk's tenure as CCO: (A) inadequate OFAC screening protocols; (B) failure to conduct adequate counterparty due diligence; (C) failure to escalate known red flags; (D) inadequate export control compliance; and (E) deficient compliance infrastructure and resources. Each is discussed in

1. Screening System Deficiencies The investigation has determined that Dunmore's OFAC screening system under Fisk's oversight was fundamentally inadequate. The system was limited to a single automated name-matching tool that was applied only at the point of counterparty onboarding — that is, at the time a new counterparty was first entered into Dunmore's trading and counterparty management systems. No periodic re-scr

2. Failure to Screen Intermediaries and Sub-Counterparties The deficiencies in Dunmore's screening protocols extended beyond the screening tool itself to the scope of parties subject to screening. Screening was applied only to direct contractual counterparties — that is, the entities with which DTI entered into trade confirmations or master agreements. No procedures existed for screening intermediaries, end users, or

3. Absence of Transaction-Level Screening No sanctions screening was conducted on individual transactions, payment flows, or shipping documentation. The compliance function did not review individual trade confirmations, wire transfer instructions, bills of lading, shipping manifests, or end-user certificates for sanctions compliance purposes. This meant that the 127 wire transfers totaling $34.2 million routed throug

1. Onboarding of Petronova Trading FZE Petronova Trading FZE (Office 1407, Al Shafar Tower, Dubai Internet City, Dubai, UAE) was onboarded by DTI as a trading counterparty in approximately early 2020. The onboarding process consisted of the collection of basic Know Your Customer ("KYC") documentation — specifically, a copy of Petronova's trade license, a passport copy for managing director Sergei Volkov, and a standa

2. Onboarding of Zenith Petroleum DMCC Zenith Petroleum DMCC (Unit 2201, Jumeirah Bay Tower X2, Cluster X, Jumeirah Lakes Towers, Dubai, UAE) was similarly onboarded with minimal due diligence. The onboarding file for Zenith Petroleum, as produced during the document review, contains only the basic KYC documentation — a trade license, a passport copy for managing director Farhan Qureshi, and a counterparty onboarding

3. Onboarding of Caspian Logistik GmbH Caspian Logistik GmbH (Mönckebergstraße 22, 20095 Hamburg, Germany), managed by Klaus Weidemann, was engaged by DTI as a logistics and shipping intermediary for oilfield drilling equipment and components. Caspian Logistik was onboarded without any export control compliance review whatsoever, despite its role in facilitating shipments of items that were later identified as classi

1. Known Red Flags Not Escalated The document review conducted by Nexagen Analytics revealed that Fisk's compliance team received at least three internal inquiries or flagged items between mid-2020 and late 2021 regarding the nature of DTI's counterparty relationships and unusual payment patterns associated with the transactions at issue. In each instance, the flagged item was either dismissed, disregarded, or addres

2. Failure to Respond to Regulatory Developments Fisk's compliance failures extended beyond the failure to act on specific red flags to a broader failure to monitor and respond to regulatory developments relevant to DTI's business. Two examples are particularly significant: Executive Order 14024 (April 15, 2021). When E.O. 14024 was issued on April 15, 2021, it represented a significant expansion of the U.S. sanction

1. Absence of Export Classification Procedures Under Fisk's oversight, Dunmore had no formal procedure for classifying goods, technology, or software under the Export Administration Regulations. Oilfield drilling equipment and components exported by DTI through Caspian Logistik GmbH were never classified against the Commerce Control List ("CCL"), as codified in Supplement No. 1 to Part 774 of the EAR. No personnel wi

2. No End-User Verification End-user certificates provided by Caspian Logistik GmbH in connection with the oilfield equipment shipments were not independently verified by Dunmore. No procedures existed for confirming the identity or legitimacy of stated end users, for conducting site visits or independent inquiries regarding the end users, or for checking end users against the Entity List (Supplement No. 4 to Part 74

3. No Export Control Training No export control training of any kind was provided to DTI personnel during the relevant period. This includes Yves Leclerc, who served as Director of Logistics & Shipping and oversaw the physical shipment of oilfield equipment, as well as the trading desk staff, including Natasha Sorokin, who authorized the commercial terms of equipment transactions. The absence of training meant that t

1. Staffing and Budget Fisk operated Dunmore's global compliance function with a team of only four full-time compliance professionals (including himself) for an organization with approximately 3,200 employees, approximately $4.87 billion in annual revenue (FY 2021), and trading and operational activities spanning multiple high-risk jurisdictions, including the UAE, Nigeria, Germany, and the United States. By any reas

2. Written Policies and Procedures The compliance manual in effect under Fisk's tenure — the "Dunmore Energy Holdings Ltd. Global Compliance Manual" — had not been materially updated since its initial adoption in approximately 2018. As of the commencement of the investigation in April 2022, the manual did not address any of the following topics: (a) The OFAC 50% Rule and its implications for counterparty screening an

3. Compliance Training Under Fisk's leadership, sanctions compliance training was conducted on an ad hoc basis, approximately once per year, via a pre-recorded online training module. The training module was a generic sanctions awareness presentation that did not address the specific sanctions risks relevant to Dunmore's business, the particular sanctions programs applicable to Russian-nexus transactions, or the prac

IV. Fisk's Knowledge and State of Mind A. Summary of June 8, 2022 Interview On June 8, 2022, Gerald Fisk was interviewed by Victoria Chambers at Calderwood & Harkness LLP's Houston office. Catherine Blackthorn of Blackthorn & Associates LLP was present as Fisk's personal counsel. The interview was conducted pursuant to an Upjohn warning advising Fisk that Calderwood & Harkness represented Dunmore (not Fisk individual

V. Comparison to Compliance Program Standards A. DOJ Evaluation of Corporate Compliance Programs The Department of Justice's "Evaluation of Corporate Compliance Programs" — the guidance document used by DOJ prosecutors to assess the adequacy of a company's compliance program in connection with corporate criminal enforcement actions — identifies a series of topics and inquiries that prosecutors should consider in eval

VI. Implications for the Investigation and DOJ Engagement A. Relevance to DOJ Corporate Enforcement Policy Fisk's compliance failures are directly relevant to the DOJ's assessment under the Corporate Enforcement Policy (formerly the FCPA Corporate Enforcement Policy, now extended to other areas of white collar enforcement) regarding whether Dunmore had an effective compliance program at the time of the misconduct. Th

VII. Recommendations Based on the analysis set forth in this memorandum, the following recommendations are made:

1. Include Fisk's failures prominently in the internal investigation report. Fisk's compliance failures and supervisory deficiencies should be presented in detail in the comprehensive internal investigation report submitted to the DOJ. Transparent and candid disclosure of the compliance deficiencies is essential to maintaining credibility with the DOJ investigation team — AUSA Meredith Calloway and Trial Attorneys Sa

2. Ensure the compliance remediation program directly addresses each identified deficiency. The Enhanced Sanctions & Export Controls Compliance Program adopted on October 1, 2023, should incorporate, at a minimum, the following remedial measures, each of which directly corresponds to a deficiency identified in this memorandum: (a) Periodic OFAC re-screening with 50% Rule analysis. All existing counterparties, interme