Contract analysis

I. EXECUTIVE SUMMARY OF DUNMORE'S CONDUCT AND THE INVESTIGATION A. Background on Dunmore Energy Holdings Ltd. Dunmore Energy Holdings Ltd. is an exempted company incorporated with limited liability under the laws of the Cayman Islands, bearing Registration No. MC-334821. While domiciled in the Cayman Islands for corporate organizational purposes, Dunmore maintains its operational headquarters in Houston, Texas, where

1. Crude Oil Swap Transactions. Between March 2020 and March 2022, DTI executed fourteen (14) crude oil swap transactions with aggregate notional values totaling approximately $218.7 million. These transactions were executed with two Dubai-based counterparties: Petronova Trading FZE and Zenith Petroleum DMCC. Forensic analysis conducted by Ridgeline Advisory Group LLC, retained by Calderwood & Harkness for this purpo

2. Oilfield Equipment Exports. During the same period, DTI facilitated the export of approximately $12.4 million in oilfield drilling equipment and components classified under Export Control Classification Numbers ("ECCNs") 2B350 and 2B999 to end users located in Russia. These shipments were routed through Caspian Logistik GmbH, a Hamburg-based freight forwarding company. The internal investigation identified evidenc

3. Payment Structuring. Between March 2020 and March 2022, approximately $34.2 million was routed through 127 intermediary transactions at Crescent Commercial Bank PJSC in Dubai. The forensic accounting analysis revealed that these transactions were structured in a manner designed to obscure the beneficial ownership interest of Volkhov in the funds flowing through the trading relationships described above. The layeri

II. APPLICATION OF THE DOJ CORPORATE ENFORCEMENT POLICY The Department's Corporate Enforcement Policy, as updated in September 2022, establishes a clear framework for evaluating corporate conduct in the wake of potential criminal violations. The Policy provides that a company may receive a declination of prosecution where it has: (1) voluntarily self-disclosed the misconduct to the Department; (2) fully cooperated wi

III. VOLUNTARY SELF-DISCLOSURE AND PROACTIVE ENGAGEMENT A. Internal discovery and Immediate Retention of Counsel As described above, Dunmore's path to disclosure began within days of the catalyst event. When OFAC designated Volkhov to the SDN List on April 6, 2022, Dunmore's then-CCO Gerald Fisk conducted a routine screening refresh and, on April 11, 2022, identified potential historical exposure through Petronova Tr

IV. FULL AND PROACTIVE COOPERATION A. Scope of the Internal Investigation Calderwood & Harkness conducted a comprehensive internal investigation on behalf of Dunmore spanning from April 2022 through early 2024. The investigation was designed to identify the full scope of the potentially problematic transactions, to determine the individuals responsible for the conduct, to assess the compliance failures that allowed t

V. TIMELY AND APPROPRIATE REMEDIATION A. Personnel Actions Dunmore acted swiftly and decisively to remove from the organization the individuals primarily responsible for the conduct under investigation. • Natasha Sorokin was placed on administrative leave on May 16, 2022, within approximately five weeks of the commencement of the internal investigation, as the early findings implicated her direct involvement in the c

1. Strengthened OFAC Screening Protocols. Dunmore has implemented a real-time, automated screening system that continuously screens all counterparties, transaction parties, and intermediaries against the OFAC SDN List, the Sectoral Sanctions Identifications List, the Consolidated Screening List maintained by the U.S. Department of Commerce Bureau of Industry and Security, the EU Consolidated List of Sanctions, and th

2. Enhanced Counterparty and Third-Party Due Diligence. All new counterparties, and all existing counterparties on a rolling basis, are now subject to enhanced due diligence procedures that include verification of beneficial ownership through independent registry searches, adverse media screening, assessment of jurisdictional risk, and evaluation of the counterparty's own compliance program. No trading relationship m

3. Revised Export Control Classification Procedures. Dunmore has implemented mandatory ECCN classification review procedures for all transactions involving oilfield equipment and components. All such transactions are now subject to review by a dedicated export controls analyst within the compliance department, who evaluates the classification of the goods, the applicable licensing requirements, the identity and locat

4. Mandatory Escalation Mechanisms and Board-Level Reporting. The Enhanced Program establishes clear and mandatory escalation pathways for compliance concerns. Any employee who identifies a potential sanctions or export control issue is required to report it through a dedicated compliance hotline or directly to the compliance department. The Chief Compliance Officer reports directly to the Audit Committee of the Boar

5. Comprehensive Employee Training. All Dunmore employees globally — not only those in trading and compliance functions — are required to complete annual training on sanctions and export control compliance. Employees in elevated-risk functions, including trading, operations, finance, and logistics, are required to complete additional specialized training modules. The training program was developed in consultation wit

6. Ongoing Monitoring, Testing, and Annual Audits. The Enhanced Program includes a robust ongoing monitoring and testing regime. The compliance department conducts quarterly transaction sampling and review, semi-annual testing of screening system effectiveness, and annual comprehensive compliance program audits. The results of these monitoring and testing activities are documented and reported to the Audit Committee

VI. VOLUNTARY DISGORGEMENT On November 30, 2023, Dunmore made a voluntary disgorgement payment of $8,750,000 to the United States Treasury. This payment represents the estimated net profits derived from the nine (9) crude oil swap transactions that the internal investigation determined involved Volkhov-connected entities. The disgorgement amount was calculated as follows: the nine tainted transactions had an aggregat

VII. OFAC CAUTIONARY LETTER As noted above, on April 15, 2024, OFAC issued a Cautionary Letter (Ref. OCA-2024-11587) to Dunmore, concluding the agency's review of the apparent violations disclosed in the company's voluntary self-disclosure filed on June 1, 2023. A Cautionary Letter is the most favorable enforcement outcome available to OFAC in matters involving apparent violations of the sanctions programs it adminis

VIII. APPLICABLE LEGAL STANDARDS AND POLICY CONSIDERATIONS A. DOJ Corporate Enforcement Policy The Corporate Enforcement Policy, as updated in September 2022, provides the governing framework for the Department's evaluation of corporate conduct in cases involving potential criminal liability. The Policy establishes that a company may receive a declination of prosecution where it has satisfied four criteria: (1) volun

IX. SUMMARY OF FACTORS SUPPORTING DECLINATION In the interest of clarity, we present a consolidated summary of the factors that, individually and collectively, support the issuance of a declination of prosecution for Dunmore Energy Holdings Ltd.:

1. Voluntary Self-Disclosure. Dunmore proactively identified the potential violations within five days of the catalyst event (the Volkhov SDN designation) and engaged outside counsel on April 14, 2022 — before the Department issued the grand jury subpoena on April 19, 2022. On June 1, 2023, Dunmore filed a comprehensive voluntary self-disclosure with OFAC's Compliance & Enforcement Division, disclosing the full scope

2. Full Cooperation. Dunmore conducted a comprehensive internal investigation involving 47 witness interviews across three rounds, the collection of 2,347,812 documents from six jurisdictions (with 438,916 deemed responsive and produced to the Department), the engagement of Ridgeline Advisory Group LLC for forensic accounting analysis, and the submission of a 176-page internal investigation report to the Department.

3. Timely Remediation. Dunmore separated the culpable employees — Natasha Sorokin (separated September 15, 2022), Derek Hargrave (separated October 1, 2022), and Gerald Fisk (departed June 10, 2022) — within months of the investigation's commencement. The company appointed Priya Nayar as Chief Compliance Officer on August 1, 2022, bringing deep expertise in sanctions compliance to the organization. Dunmore retained P

4. Voluntary Disgorgement. On November 30, 2023, Dunmore made a voluntary disgorgement payment of $8,750,000 to the U.S. Treasury, representing the estimated net profits derived from the nine tainted crude oil swap transactions. The payment was made entirely voluntarily, in advance of any government demand, and the calculation methodology was shared with and reviewed by the Department.

5. OFAC Disposition. On April 15, 2024, OFAC issued a Cautionary Letter (Ref. OCA-2024-11587) — the most favorable enforcement outcome available for matters involving apparent violations — without imposing any civil monetary penalty. OFAC cited Dunmore's voluntary self-disclosure, cooperation, remediation, and disgorgement as mitigating factors supporting this disposition.

6. Good Corporate Citizenship. Dunmore is a privately held company with approximately 3,200 employees worldwide whose livelihoods and economic well-being would be adversely and materially affected by a criminal prosecution. The company has invested over $31 million (gross) in investigating and remediating this matter, reflecting its deep commitment to accountability and compliance. After recovery under the company's

7. Individual Accountability. Dunmore has not sought to shield the individuals primarily responsible for the misconduct from accountability. The company permitted Hargrave, Sorokin, and Fisk to retain separate counsel and advanced their defense costs totaling approximately $3.4 million without conditioning advancement on cooperation with any particular narrative. The Department retains full discretion to pursue indiv

X. REQUEST FOR FORMAL DECLINATION Based on the foregoing, Dunmore Energy Holdings Ltd. respectfully and formally requests that the Department of Justice issue a written declination of prosecution in connection with the investigation referenced above, including grand jury subpoena GJ No. 22-418. Dunmore submits that the totality of its conduct — encompassing voluntary self-disclosure, full and proactive cooperation, t

1. OFAC Cautionary Letter (Ref. OCA-2024-11587), dated April 15, 2024

2. Supplemental Remediation Report, dated January 15, 2024

3. Confirmation of U.S. Treasury Disgorgement Payment ($8,750,000), dated November 30, 2023