Contract analysis

I. EXECUTIVE SUMMARY A. Purpose of This Report This Supplemental Remediation Report — Implementation Summary (this "Report") is submitted by Calderwood & Harkness LLP ("Calderwood & Harkness" or "outside counsel") on behalf of Dunmore Energy Holdings Ltd. ("Dunmore" or "DEH") to the United States Department of Justice, National Security Division, Counterintelligence and Export Control Section ("CES" or the "Governmen

1. Appointment of New Chief Compliance Officer. Effective August 1, 2022, Dunmore appointed Priya Nayar as Chief Compliance Officer ("CCO"), replacing Gerald Fisk, who departed the company on June 10, 2022. Ms. Nayar brought more than fifteen years of sanctions and export controls compliance experience, including prior service at a Fortune 100 energy company and a leading global financial institution. Critically, Ms.

2. Retention of Pemberton Investors Solutions LLC. On December 15, 2022, Calderwood & Harkness, on behalf of Dunmore, retained Pemberton Investors Solutions LLC ("Marlowe Asset Management"), led by Dr. Anton Bremer, to conduct a comprehensive assessment of Dunmore's existing sanctions and export controls compliance program and to design a remediation program addressing all identified deficiencies. Marlowe Asset Manag

3. Delivery of Marlowe Asset Management's Remediation Report. On September 15, 2023, Marlowe Asset Management delivered its remediation report and the framework for the Enhanced Sanctions & Export Controls Compliance Program. The Marlowe Asset Management report incorporated the findings of Calderwood & Harkness's own compliance program assessment and was informed by the forensic findings documented in the Investigati

4. Board Adoption of the Enhanced Program. On October 1, 2023, the Board of Directors of Dunmore Energy Holdings Ltd. formally adopted the Enhanced Sanctions & Export Controls Compliance Program by unanimous resolution. The Board Resolution authorized CCO Priya Nayar to implement all elements of the Enhanced Program and established the Compliance Committee of the Board.

5. Voluntary Disgorgement Payment. On November 30, 2023, Dunmore made a voluntary disgorgement payment of $8,750,000 to the United States Treasury, representing the estimated net profits derived from the nine tainted crude oil swap transactions identified in the Investigation Report. This payment was made voluntarily and in advance of any enforcement action by the Government or OFAC.

6. Completion of All Major Remediation Workstreams. As detailed in Section V of this Report, all major components of the Enhanced Program have been fully implemented, including enhanced OFAC screening protocols, export control compliance enhancements, a comprehensive third-party due diligence program, transaction monitoring and payment controls, a global training program, updated policies and procedures, whistleblowe

II. BACKGROUND AND CONTEXT A. The Underlying Conduct The internal investigation conducted by Calderwood & Harkness, the findings of which were detailed in the Investigation Report submitted to the Government on May 15, 2023, identified three categories of sanctionable conduct occurring between approximately March 2020 and April 2022. The Tainted Crude Oil Swap Transactions. During the relevant period, Dunmore Trading

III. ASSESSMENT OF PRE-EXISTING COMPLIANCE PROGRAM DEFICIENCIES A. Summary of Calderwood & Harkness's Assessment (November 15, 2022) On November 15, 2022, Conrad Reeves and Jasmine Thornton of Calderwood & Harkness delivered a detailed memorandum to the Board of Directors of Dunmore assessing the state of Dunmore's pre-existing sanctions and export controls compliance program as of April 2022 (the "Compliance Assessm

1. OFAC Screening Protocols The pre-existing OFAC screening protocols at Dunmore were fundamentally inadequate in multiple respects. First, OFAC screening was conducted only at the point of counterparty onboarding. Once a counterparty was initially screened and cleared, no periodic re-screening was performed. This meant that if a counterparty or its beneficial owners were subsequently designated by OFAC, Dunmore woul

2. Export Control Classification and Compliance Dunmore lacked any systematic process for classifying goods under the Export Administration Regulations ("EAR") prior to export. There was no centralized database of product classifications, and trading and logistics personnel were not trained to identify items that might be subject to EAR jurisdiction or require a license for export. The oilfield drilling equipment and

3. Third-Party Due Diligence Dunmore's pre-existing counterparty due diligence procedures were inadequate in several critical respects. The company conducted only minimal know-your-customer ("KYC") and due diligence on intermediaries and trading counterparties. For the counterparties at issue—Petronova Trading FZE, Zenith Petroleum DMCC, and Caspian Logistik GmbH—Dunmore's due diligence files contained little more th

4. Escalation and Reporting The pre-existing compliance program lacked any formal escalation protocol for sanctions-related red flags. There was no documented procedure specifying the circumstances under which a potential sanctions concern should be escalated, to whom it should be escalated, or the timeline within which escalation should occur. Of particular concern, the former CCO Gerald Fisk did not have an indepen

5. Training. Dunmore had no dedicated sanctions or export controls training program for any category of employee. The company's existing general compliance training program—a single annual online module—did not cover OFAC-administered sanctions programs, the SDN List, Directive 2 of Executive Order 13662, the 50 Percent Rule, EAR requirements, export classification, license determination procedures, or any of the oth

6. Tone at the Top The culture at DTI's Dubai trading desk, as documented in the Investigation Report, was one in which revenue generation was prioritized over compliance. Derek Hargrave, as President of DTI, set a tone that emphasized deal execution and trading profits and marginalized the role of the compliance function. Natasha Sorokin, as Senior Trader, operated with minimal compliance oversight and, as the inves

IV. DESIGN OF THE ENHANCED PROGRAM A. Engagement of Pemberton Investors Solutions LLC On December 15, 2022, Calderwood & Harkness, on behalf of Dunmore, retained Pemberton Investors Solutions LLC ("Marlowe Asset Management") to serve as an independent compliance consultant for the purpose of conducting a comprehensive assessment of Dunmore's sanctions and export controls compliance program and designing a remediation

V. IMPLEMENTATION OF ENHANCED PROGRAM — COMPONENT-BY-COMPONENT This Section provides a detailed, component-by-component description of the implementation of the Enhanced Sanctions & Export Controls Compliance Program. For each component, we describe the design of the measure, the implementation steps taken, the current operational status, and the relationship to the specific deficiency or deficiencies the measure is

1. Chief Compliance Officer — Priya Nayar As noted in Section I.B.1, Priya Nayar was appointed as Dunmore's Chief Compliance Officer effective August 1, 2022. Ms. Nayar was selected following an extensive search conducted with the assistance of an executive search firm. She brought to Dunmore more than fifteen years of experience in sanctions and export controls compliance, including senior compliance roles at a Fort

2. Compliance Committee of the Board The Compliance Committee of the Board was established by the Board Resolution of October 1, 2023. The Committee comprises three independent directors—Margaret Atherton (Chair), Robert Nakamura, and Patricia Delacroix—and CEO Callum Renshaw, who serves in an ex officio capacity. None of the independent directors has any involvement in Dunmore's day-to-day trading or operational act

3. Reporting Lines The restructured reporting lines are a foundational element of the Enhanced Program. The organizational design ensures that compliance considerations are embedded at every level of the organization and that information flows freely between the compliance function, senior management, and the Board. At the corporate level, CCO Priya Nayar reports directly to the Board Compliance Committee for all com

1. Automated Screening System The implementation of an automated sanctions screening platform represents one of the most significant technological upgrades undertaken as part of the Enhanced Program. The prior manual screening process—which relied on compliance staff manually searching outdated databases against counterparty legal names—has been entirely replaced by an automated, enterprise-wide screening solution. T

2. Beneficial Ownership and 50% Rule Screening Addressing one of the most critical deficiencies identified in the pre-existing program, the Enhanced Program requires all counterparties to provide certified beneficial ownership information at the time of onboarding and to recertify such information on an annual basis. The beneficial ownership certification requires disclosure of all natural persons who, directly or in

3. Periodic Re-Screening Under the Enhanced Program, all active counterparties are re-screened against updated sanctions and restricted party lists on a quarterly basis, at minimum. This quarterly re-screening is performed automatically by the screening platform and does not require manual initiation by compliance personnel. In addition to the scheduled quarterly re-screening, the Enhanced Program provides for event-

4. Escalation Protocol for Screening Hits The Enhanced Program includes a formal, documented escalation protocol for the adjudication of sanctions screening alerts. The protocol operates on a three-tier escalation framework: Tier 1 — Initial Review by Compliance Analyst. All screening alerts generated by the automated platform are initially reviewed by a compliance analyst, who conducts a preliminary assessment to de

1. Export Classification Review As part of the Enhanced Program, Dunmore conducted a comprehensive review and classification of all products, equipment, and technology traded or exported by Dunmore entities under the EAR Commerce Control List. This review was performed by Pemberton Investors Solutions LLC in coordination with Conrad Reeves and the compliance team, and was informed by the product specifications, techn

2. License Determination Procedures Under the Enhanced Program, a mandatory license determination must be completed prior to any export, re-export, or in-country transfer of any controlled item by any Dunmore entity. The license determination process requires the following steps: (a) Classification Verification. The item to be exported is classified under the EAR Commerce Control List using the centralized classifica

3. End-User Verification The Enhanced Program includes a substantially strengthened end-user verification process, designed to address the specific failure that allowed the false end-user certificates provided by Caspian Logistik GmbH to go undetected. Under the new procedures, end-user verification requires independent corroboration of the end-user's identity and stated end-use. The compliance team is required to: (

4. Red Flag Indicators A comprehensive list of red flag indicators for