1016-00007 · Client 1016 · OFAC Filing

vsd-cover-letter-ofac.docx DOCUMENT M&A / Corporate

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CALDERWOOD & HARKNESS LLP 400 Park Avenue, 28th Floor New York, NY 10022 Tel: (212) 555-0100

Fax: (212) 555-0199

www.calderwoodharkness.com

October 6, 2023

VIA Severin Partners LLC AND ELECTRONIC SUBMISSION (OFAC PORTAL)

Office of Foreign Assets Control Compliance & Enforcement Division U.S. Department of the Treasury 1500 Pennsylvania Avenue, NW Washington, DC 20220

Re: Voluntary Self-Disclosure Pursuant to 31 C.F.R. § 501.806 Reporting Party: Dunmore Energy Holdings Ltd. / Dunmore Trading International Ltd.

Dear Sir or Madam:

Calderwood & Harkness LLP respectfully submits this voluntary self-disclosure ("VSD") on behalf of its clients Dunmore Energy Holdings Ltd. ("DEH"), a Cayman Islands exempted company limited by shares, and its wholly owned subsidiary Dunmore Trading International Ltd. ("DTI"), a private company limited by shares registered in England and Wales (Companies House No. 12849371). This VSD is filed pursuant to the procedures set forth in 31 C.F.R. § 501.806 and concerns apparent violations of the sanctions programs administered by the Office of Foreign Assets Control ("OFAC"). As set forth in detail below, the apparent violations involve five fuel oil sale transactions executed by DTI with a counterparty that, unbeknownst to DEH or DTI at the time, was owned or controlled by a person designated as a Specially Designated National ("SDN") under Executive Order 14024. DEH and DTI submit this disclosure voluntarily, in good faith, and in the interest of full transparency, and they are committed to cooperating fully with OFAC in connection with any review or investigation of these matters.

I. SUMMARY OF APPARENT VIOLATIONS

Between September 12, 2022 and January 23, 2023, DTI, a physical commodities trading subsidiary of DEH, executed five (5) fuel oil sale transactions involving low-sulfur fuel oil ("LSFO"), 380 CST grade, with Caspian Star Commodities DMCC ("Caspian Star"), a company organized under the laws of the Dubai Multi Commodities Centre ("DMCC") in the United Arab Emirates. The aggregate transaction value of these five sales was approximately $4,726,500. All five transactions were settled in U.S. dollars via wire transfers that were processed through Ridgeline National Bank, N.A. ("Ridgeline"), a U.S. financial institution headquartered in Houston, Texas.

At the time of these transactions, Caspian Star was owned or controlled by Timur R. Kadyrov (date of birth: September 7, 1971), a Russian national who was designated by OFAC as a Specially Designated National on March 18, 2022. Mr. Kadyrov's SDN Entry ID is 47218, and he was designated under the RUSSIA-EO14024 sanctions program pursuant to Executive Order 14024 of April 15, 2021, as amended ("E.O. 14024"). The stated basis for Mr. Kadyrov's designation was his role in operating in the technology sector of the Russian Federation economy and his involvement in sanctions evasion networks.

Because Caspian Star was beneficially owned by Mr. Kadyrov — a blocked person under E.O. 14024 — at the time of the subject transactions, Caspian Star itself was blocked under OFAC's 50 Percent Rule, as codified at 31 C.F.R. § 587.309. Under the 50 Percent Rule, any entity owned 50 percent or more, directly or indirectly, by one or more blocked persons is itself considered blocked, regardless of whether the entity is separately identified on the SDN List. Accordingly, the five transactions described herein appear to have violated E.O. 14024 and the regulations set forth at 31 C.F.R. Part 587 by involving dealings with, and the processing of payments through U.S. financial institutions in connection with property in which a blocked person — namely Caspian Star, as an entity owned or controlled by a designated SDN — had an interest.

Neither DEH nor DTI had actual knowledge of Mr. Kadyrov's beneficial ownership of Caspian Star at the time the transactions were executed. The specific circumstances giving rise to these apparent violations, including the limitations in publicly available beneficial ownership information and the timing of OFAC's public identification of the Kadyrov-Caspian Star ownership link, are described in detail in Section III below.

II. PARTIES

A. Reporting Parties

Dunmore Energy Holdings Ltd. ("DEH")

DEH is an exempted company limited by shares organized under the laws of the Cayman Islands. DEH's registered address is 4th Floor, Harbour Place, 103 South Church Street, George Town, Grand Cayman KY1-1002, Cayman Islands. DEH holds a U.S. Employer Identification Number (EIN: 98-1347562) and maintains its principal U.S. office at 1200 Travis Street, Suite 3400, Houston, TX 77002.

DEH operates in the oil and gas exploration and production sector, with additional business activities in renewable energy development. For fiscal year 2022, DEH reported annual revenues of approximately $2.14 billion. The company employs approximately 3,800 personnel worldwide across its various subsidiaries and operating affiliates.

DEH is majority-owned by Grandview Capital Partners LLC, which holds a 68.4% equity interest through Grandview Energy Fund IV, LP, a Delaware limited partnership. The remaining equity interests are held by minority institutional investors and management.

The following individuals hold relevant leadership positions at DEH:

• General Counsel: Marcus Whitfield, Senior Vice President & General Counsel

• Chief Financial Officer: Janet Sorensen

• Chief Compliance Officer: Derek Huang

Dunmore Trading International Ltd. ("DTI")

DTI is a private company limited by shares incorporated and registered in England and Wales under Companies House No. 12849371. DTI's registered address is 25 Finsbury Square, London EC2A 1PQ, United Kingdom. DTI is a wholly owned subsidiary of DEH.

DTI's principal business activity is the physical trading of crude oil and refined petroleum products in international markets. DTI operates trading desks in London, Dubai, and Singapore, and regularly executes transactions denominated in U.S. dollars that are settled through U.S. correspondent banking channels. DTI's Managing Director is Gregor Albrecht.

DTI is the entity that directly executed the five subject transactions with Caspian Star that are the subject of this disclosure.

B. Sanctioned Counterparty

Caspian Star Commodities DMCC ("Caspian Star")

Caspian Star is a DMCC Free Zone Company organized under the laws of the Dubai Multi Commodities Centre in the United Arab Emirates. Caspian Star's registered address is Unit 4412, Jumeirah Business Centre 1, Cluster G, Jumeirah Lakes Towers, Dubai, UAE. Caspian Star's nominal Managing Director at the time of the subject transactions was Farid Mammadov.

The beneficial owner of Caspian Star at the time of the subject transactions was Timur R. Kadyrov, a Russian national (date of birth: September 7, 1971). Mr. Kadyrov was designated by OFAC as a Specially Designated National on March 18, 2022, under SDN Entry ID 47218, within the RUSSIA-EO14024 sanctions program. The designation was made pursuant to E.O. 14024 on the basis that Mr. Kadyrov was operating in the technology sector of the Russian Federation economy and was involved in sanctions evasion networks.

The know-your-customer ("KYC") documentation collected by DTI at the time of Caspian Star's onboarding as a counterparty (July 2021) listed Mr. Mammadov as the sole director and 100% owner of Caspian Star. A beneficial ownership declaration signed by Mr. Mammadov on July 6, 2021 represented that Mr. Mammadov was the sole ultimate beneficial owner of Caspian Star. At no point during the course of the business relationship did Caspian Star or Mr. Mammadov disclose Mr. Kadyrov's beneficial ownership interest, nor did any KYC documentation or corporate registry extract obtained by DTI reflect Mr. Kadyrov's involvement.

OFAC's original March 18, 2022 SDN entry for Mr. Kadyrov identified his personal identifying information but did not, at that time, expressly identify Caspian Star Commodities DMCC as an entity owned or controlled by Mr. Kadyrov. It was not until OFAC issued a supplemental update to the SDN List on May 12, 2023 that Caspian Star was publicly identified as an entity within Mr. Kadyrov's ownership network. This supplemental information was not reflected in Caspian Star's own corporate records or in widely available commercial databases prior to that date.

C. U.S. Financial Institution

Ridgeline National Bank, N.A. ("Ridgeline")

Ridgeline National Bank, N.A. is a national banking association organized under the laws of the United States, with its principal office located at 700 Louisiana Street, Suite 4800, Houston, TX 77002. Ridgeline served as the correspondent bank through which all five U.S. dollar-denominated wire transfers for the subject transactions were processed, with all payment processing occurring through Ridgeline's Houston operations center.

The payment flow for each of the five transactions followed an identical pattern: funds were transferred from Caspian Star's account at Emirates Gulf Commercial Bank in Dubai through Ridgeline's correspondent banking operations in Houston, Texas, to DTI's U.S. dollar-denominated account held at Ridgeline. The involvement of Ridgeline, a U.S. financial institution, in processing these payments establishes U.S.-person jurisdiction and the requisite U.S. nexus for the application of OFAC's sanctions regulations under 31 C.F.R. Part 587.

III. DETAILED NARRATIVE OF FACTS

A. Counterparty Onboarding

Caspian Star was first onboarded as a counterparty of DTI on July 8, 2021. The onboarding process was conducted in accordance with DTI's then-applicable counterparty due diligence procedures and included both KYC verification and sanctions screening.

The KYC review and sanctions screening were performed between July 8 and July 12, 2021 by DTI's London-based compliance team. The compliance team was supported in this process by Ashworth & Kline LLP, DTI's then-outside trade compliance counsel, headquartered at 10 Aldermanbury, London EC2V 7HR, and led by partner Nigel Ashworth. Ashworth & Kline provided advisory guidance on the scope and adequacy of the screening protocols applied during the onboarding process.

Sanctions screening was conducted using the HCS ScreenPro platform, an automated screening tool provided by Harborview Compliance Solutions Inc. ("HCS"), located at 2300 Clarendon Boulevard, Suite 700, Arlington, VA 22201. The HCS ScreenPro platform screened the counterparty against multiple sanctions lists, including the OFAC Specially Designated Nationals and blocked Persons List (the "SDN List"), the European Union Consolidated Sanctions List, and the United Kingdom Office of Financial Sanctions Implementation ("OFSI") Consolidated List. The screening was conducted using both the entity name "Caspian Star Commodities DMCC" and the name of the identified beneficial owner and director, "Farid Mammadov." No matches were returned for either name on any of the screened sanctions lists.

During the onboarding process, DTI collected the following KYC documentation from Caspian Star:

(i) DMCC commercial license for Caspian Star Commodities DMCC;

(ii) A copy of Mr. Mammadov's United Arab Emirates resident visa;

(iii) Two trade references from unrelated commodities trading firms;

(iv) A completed KYC questionnaire in DTI's standard format;

(v) Corporate registry extracts from the DMCC;

(vi) A beneficial ownership declaration, signed by Mr. Mammadov on July 6, 2021, representing that Mr. Mammadov was the sole ultimate beneficial owner (100%) of Caspian Star.

Based on the results of the screening and the documentation collected, Caspian Star was assigned a "Standard Risk" rating under DTI's counterparty risk classification framework. No elevated risk indicators were identified, and the counterparty was cleared for trading activity.

It is critical to note that, at the time of Caspian Star's onboarding in July 2021, Mr. Kadyrov had not yet been designated by OFAC. Mr. Kadyrov's designation did not occur until March 18, 2022 — approximately eight months after Caspian Star's onboarding was completed. Accordingly, even a perfectly executed screening at the time of onboarding could not have identified a sanctions risk associated with Mr. Kadyrov, because no such designation existed at that time.

B. OFAC Designation of Kadyrov

On March 18, 2022, OFAC designated Timur R. Kadyrov as a Specially Designated National pursuant to E.O. 14024. The designation was published under SDN Entry ID 47218 within the RUSSIA-EO14024 sanctions program. The stated grounds for the designation were that Mr. Kadyrov was operating in the technology sector of the Russian Federation economy and was involved in sanctions evasion networks.

The SDN entry published on March 18, 2022 contained Mr. Kadyrov's personal identifying information, including his full name, date of birth (September 7, 1971), nationality (Russian Federation), and other identifying data. However, the SDN entry as published at that time did not expressly identify Caspian Star Commodities DMCC as an entity owned or controlled by Mr. Kadyrov. Nor did the entry list any other corporate entities associated with Mr. Kadyrov's sanctions evasion network.

Under OFAC's 50 Percent Rule, as codified at 31 C.F.R. § 587.309 and as set forth in OFAC's Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property Are blocked (August 13, 2014), any entity that is owned, directly or indirectly, 50 percent or more by one or more blocked persons is itself considered blocked property, regardless of whether such entity has been expressly identified on the SDN List or any other OFAC list. The practical effect of this rule is that compliance with OFAC sanctions requires knowledge of the beneficial ownership structures of counterparties, even where the entity itself is not named on the SDN List.

However, identifying entities subject to the 50 Percent Rule requires access to accurate and current beneficial ownership information — information that, in this case, was not available to DTI through the commercial databases and screening platforms it employed. Mr. Kadyrov's ownership of Caspian Star was effectuated through a network of nominee shareholders, and this ownership structure was not reflected in Caspian Star's publicly available corporate records, in the DMCC corporate registry, or in widely available commercial databases at any point prior to OFAC's supplemental SDN List update on May 12, 2023.

C. The Subject Transactions

The five transactions at issue involved the physical sale by DTI of low-sulfur fuel oil ("LSFO"), 380 CST grade, to Caspian Star. All five transactions were executed as physical commodity sales with delivery on FOB (Free on Board) terms at Fujairah, United Arab Emirates. The transactions were documented under standard form sale confirmations. The details of the five transactions are as follows:

All five payments were received in U.S. dollars via wire transfer. The payment flow for each transaction followed the same path: funds were transferred from Caspian Star's account at Emirates Gulf Commercial Bank in Dubai through Ridgeline National Bank, N.A.'s correspondent banking operations in Houston, Texas, and credited to DTI's U.S. dollar-denominated account at Ridgeline. In total, three outgoing and two incoming USD wire transfers were processed by Ridgeline's Houston operations center in connection with these transactions.

The processing of these U.S. dollar-denominated wire transfers through Ridgeline, a U.S. financial institution, establishes the requisite U.S. nexus for the exercise of OFAC jurisdiction under 31 C.F.R. Part 587, which implements E.O. 14024. Specifically, the transactions involved the processing by a U.S. person of transfers of funds to or from a blocked person's interest, thereby implicating the prohibitions set forth in the Russian Harmful Foreign Activities Sanctions Regulations.

D. Re-Screening Failure

DTI's Global Sanctions Compliance Policy (Version 3.2, effective January 1, 2022) (the "Compliance Policy") required annual re-screening of all active counterparties against applicable sanctions lists. The Compliance Policy specified that re-screening was to be conducted on or before the anniversary date of each counterparty's initial onboarding.

In the case of Caspian Star, the annual re-screening was due by July 8, 2022 — one year from the date of Caspian Star's onboarding on July 8, 2021. However, the re-screening was not completed on schedule. Due to compliance staffing shortages and a vacancy in DTI's London compliance team during the second and third quarters of 2022, the re-screening for Caspian Star was delayed until October 2022.

When the re-screening was ultimately conducted in October 2022, it was performed through the same HCS ScreenPro platform. The re-screening returned no hits for Caspian Star Commodities DMCC or Farid Mammadov. This result was attributable to two factors:

(i) The SDN List entry for Mr. Kadyrov, as published at that time, did not reference or identify Caspian Star Commodities DMCC as an entity owned or controlled by Mr. Kadyrov. Accordingly, a name-based screen of "Caspian Star Commodities DMCC" against the SDN List would not have returned a match; and

(ii) The HCS ScreenPro platform's beneficial ownership screening module relied upon corporate registry data feeds that still reflected Mr. Mammadov as the 100% owner of Caspian Star. The platform's underlying beneficial ownership data, sourced from public corporate registries and commercial data providers, did not include the Kadyrov-Caspian Star ownership link. This gap in the data feed meant that even the beneficial ownership screening functionality of HCS ScreenPro was unable to identify the sanctions risk.

The delayed re-screening — while a departure from the Compliance Policy's prescribed timeline — did not, in this instance, contribute to the failure to identify the sanctions nexus. Even if the re-screening had been conducted on time in July 2022, the same limitations in the SDN List and the HCS ScreenPro data feeds would have produced the same result: no match. The sanctions risk associated with Caspian Star was simply not identifiable through the tools and data available to DTI at that time. Nonetheless, DEH acknowledges the delay as a compliance deficiency and has taken remedial steps to ensure adherence to re-screening timelines going forward, as described in Section IV below.

E. Discovery and Remediation

The chain of events leading to the discovery of the Kadyrov-Caspian Star ownership link and the apparent violations proceeded as follows:

January 30, 2023: Borwick & Thatcher LLP, DEH's external auditors (located at 1 More London Place, London SE1 2AF), issued a management letter to DEH's Board of Directors in connection with the FY 2022 financial audit. In that management letter, Borwick & Thatcher included Caspian Star in a list of "high-risk counterparties." The flagging of Caspian Star was related to counterparty credit risk — specifically, the fact that Caspian Star had not provided audited financial statements — rather than to any identified sanctions compliance concern. Borwick & Thatcher did not, at that time, identify any sanctions-related risk associated with Caspian Star.

March 6, 2023: Derek Huang, DEH's Chief Compliance Officer, initiated an enhanced compliance review of Caspian Star in response to the Borwick & Thatcher flag. Mr. Huang determined that the counterparty credit risk concerns warranted a broader review of the Caspian Star relationship, including a refresh of KYC documentation and a supplemental sanctions screening. This enhanced review was conducted over the following months.

May 12, 2023: OFAC updated the SDN List supplemental information to expressly identify Caspian Star Commodities DMCC as an entity owned or controlled by Timur R. Kadyrov. This was the first time that Caspian Star was publicly identified by OFAC as being within Mr. Kadyrov's ownership network.

June 2, 2023: In the course of the enhanced review initiated in March 2023, Mr. Huang manually accessed OFAC's publicly available website and reviewed the current SDN List and supplemental information. During this review, Mr. Huang discovered the updated SDN annotation linking Caspian Star to Mr. Kadyrov. Mr. Huang immediately recognized the implications of this finding and reported it the same day to Marcus Whitfield, DEH's Senior Vice President and General Counsel. Mr. Huang's email report to Mr. Whitfield, dated June 2, 2023, is enclosed as Appendix G to this submission.

June 5, 2023: Within three business days of the discovery, DTI formally blocked Caspian Star as a counterparty in all of DTI's trading and compliance systems and froze all pending transactions with Caspian Star. At the time of the block, no transactions with Caspian Star were pending, as the last transaction (Invoice CS-DTI-0115) had been completed on January 23, 2023 — more than four months earlier. An internal memorandum documenting the account block action, dated June 5, 2023, is enclosed as Appendix H.

No further transactions of any kind have been executed by DTI with Caspian Star since January 23, 2023, and no further transactions will be executed absent authorization from OFAC. DEH and DTI promptly engaged Calderwood & Harkness LLP to conduct a thorough internal investigation and to prepare this voluntary self-disclosure.

F. Root Cause Summary

Based on the internal investigation conducted by Calderwood & Harkness LLP at the direction of DEH's General Counsel, the apparent violations resulted from three principal contributing factors:

1. Timing Gap in Public Information: A gap of approximately 14 months existed between Mr. Kadyrov's designation as an SDN (March 18, 2022) and OFAC's public identification of Caspian Star as an entity owned or controlled by Mr. Kadyrov through the SDN List supplemental update (May 12, 2023). During this 14-month period, no publicly available source — including the SDN List, the DMCC corporate registry, or widely used commercial databases — reflected the Kadyrov-Caspian Star ownership link.

2. Screening Platform Data Limitations: The HCS ScreenPro beneficial ownership data feed, which DTI relied upon for automated counterparty screening, did not incorporate the Kadyrov-Caspian Star ownership link at any point prior to OFAC's May 2023 supplemental update. The platform's beneficial ownership module relied on data sourced from public corporate registries and commercial data providers, which reflected Mr. Mammadov — not Mr. Kadyrov — as Caspian Star's sole beneficial owner. This data gap was a systemic limitation of the screening platform and its underlying data sources, not the result of any failure by DTI to implement or properly configure the screening tool.

3. Delayed Re-Screening Cycle: The annual re-screening of Caspian Star, which was scheduled for completion by July 8, 2022 under DTI's Compliance Policy, was not completed until October 2022 due to compliance staffing shortages. While this delay constituted a departure from DTI's internal policy, the delayed re-screening would not have yielded a different result even if conducted on time. The sanctions risk associated with Caspian Star was not identifiable through any available screening tool or database at any point prior to OFAC's May 2023 supplemental update. Nonetheless, the delay represents a compliance process deficiency that DEH has addressed through the remedial measures described below.

IV. MITIGATING FACTORS

DEH and DTI respectfully submit that the following mitigating factors are relevant to OFAC's evaluation of the appropriate enforcement response in this matter, consistent with the factors set forth in OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. Part 501, Appendix A:

1. Voluntary Self-Disclosure. This disclosure is made voluntarily pursuant to 31 C.F.R. § 501.806 and prior to any indication that OFAC has independently identified the subject transactions or initiated any inquiry, investigation, or enforcement action with respect thereto. DEH is submitting this VSD of its own volition and before receiving any request for information, administrative subpoena, or other governmental inquiry. OFAC's Enforcement Guidelines recognize that a voluntary self-disclosure is a significant mitigating factor in determining an appropriate enforcement response, as it reflects a willingness by the reporting party to bring potential violations to OFAC's attention and to cooperate in their resolution.

2. No Actual Knowledge. Neither DEH nor DTI had actual knowledge of Mr. Kadyrov's beneficial ownership of Caspian Star at the time of the subject transactions. The ownership link between Mr. Kadyrov and Caspian Star was concealed through a network of nominee shareholders and was not reflected in Caspian Star's corporate records, in the DMCC registry, or in widely available commercial databases. The Kadyrov-Caspian Star connection was not publicly discoverable through any commercially available screening tool or database until OFAC's supplemental SDN List update on May 12, 2023 — nearly four months after the last of the subject transactions was completed. DEH and DTI reasonably relied on KYC documentation provided by Caspian Star and on the results of automated sanctions screening through the HCS ScreenPro platform.

3. Inadvertent Conduct. The five transactions at issue were routine physical commodity trades in low-sulfur fuel oil executed in the ordinary course of DTI's business operations. There is no evidence, and no reason to believe, that any officer, director, employee, or agent of DEH or DTI intended to evade or circumvent U.S. sanctions. There are no indicia of willful sanctions evasion, including no evidence of efforts to structure transactions to avoid detection, no use of shell companies or intermediaries to obscure the identity of the ultimate counterparty (beyond Caspian Star's own use of nominee shareholders, which was not known to DTI), and no evidence of communications with or on behalf of Mr. Kadyrov.

4. Prompt Remediation. Upon discovering the Kadyrov-Caspian Star ownership link on June 2, 2023, DTI acted swiftly and decisively. Within three business days — on June 5, 2023 — DTI blocked Caspian Star as a counterparty in all trading and compliance systems and froze all pending transactions. At the time of the block, no transactions were pending, as the last transaction had been completed on January 23, 2023. No further transactions have been executed with Caspian Star. DEH promptly engaged Calderwood & Harkness LLP to conduct a thorough investigation and to prepare this disclosure.

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, UAE. No evidence has been identified during the internal investigation indicating that Mr. Kadyrov personally received, directed, or benefited from the funds paid by DTI in connection with these transactions. While DEH acknowledges that Caspian Star, as an entity owned or controlled by Mr. Kadyrov, constituted blocked property under the 50 Percent Rule, the payments were made to the corporate entity in the ordinary course of a commercial fuel oil trading relationship and were not directed to Mr. Kadyrov personally.

6. Existing Compliance Program. At the time of the subject transactions, DEH and DTI maintained a sanctions compliance program that included the following elements: (a) automated sanctions screening of counterparties using the HCS ScreenPro platform; (b) annual re-screening of all active counterparties against applicable sanctions lists; (c) designated compliance personnel, including Chief Compliance Officer Derek Huang; (d) a written Global Sanctions Compliance Policy (Version 3.2, effective January 1, 2022); and (e) engagement of outside trade compliance counsel (Ashworth & Kline LLP) to support compliance functions. While the compliance program did not succeed in identifying the sanctions risk in this instance — due primarily to the limitations in publicly available beneficial ownership information — the existence of the program reflects DEH's commitment to sanctions compliance and demonstrates that the apparent violations were not the result of a wholesale disregard of sanctions obligations.

7. Comprehensive Remedial Enhancements. Since the discovery of the apparent violations, DEH has implemented significant and comprehensive remedial measures to strengthen its sanctions compliance program and to prevent the recurrence of similar violations. These measures include:

(a) Upgraded Screening Platform: DTI has upgraded to HCS ScreenPro Version 5.0, which includes an enhanced beneficial ownership screening module incorporating third-party corporate intelligence data feeds from multiple independent sources. This upgraded platform is designed to identify beneficial ownership connections that may not be reflected in public corporate registries. The upgrade became effective on August 1, 2023.

(b) Independent Counterparty Reviews: DEH has engaged Omnivael Global Advisors LLC, an independent risk advisory firm, to conduct quarterly manual reviews of all DTI counterparties against current sanctions lists, adverse media, and corporate intelligence databases. This engagement became effective on September 15, 2023.

(c) Dedicated Sanctions Compliance Officer: DEH has hired Kira Petrossian as a dedicated Sanctions Compliance Officer for DTI. Ms. Petrossian brings over ten years of experience in sanctions compliance in the energy trading sector and reports directly to DEH's Chief Compliance Officer, Derek Huang. Ms. Petrossian commenced her role on October 2, 2023.

(d) Increased Re-Screening Frequency: DTI has reduced its counterparty re-screening intervals from annual to quarterly, ensuring that all active counterparties are screened against current sanctions lists no less than four times per year.

(e) Updated Compliance Policy: DTI's Global Sanctions Compliance Policy has been updated to Version 4.0, with an effective date of November 1, 2023. The updated policy includes mandatory escalation protocols requiring immediate reporting to the Chief Compliance Officer and General Counsel upon identification of any potential sanctions concern, as well as Board-level reporting of all sanctions-related issues on a quarterly basis.

(f) Ongoing Outside Counsel Advisory: DEH has engaged Calderwood & Harkness LLP for ongoing sanctions compliance advisory support, including periodic reviews of DTI's compliance policies, procedures, and screening capabilities.

(g) Mandatory Training: DEH has completed mandatory sanctions compliance training for all 56 DTI trading and compliance personnel. The training covered OFAC sanctions requirements, the 50 Percent Rule, beneficial ownership screening obligations, and procedures for identifying and escalating potential sanctions concerns.

A detailed summary of all remedial measures implemented is enclosed as Appendix I to this submission.

8. Full Cooperation. DEH and DTI are committed to cooperating fully and transparently with OFAC's review of this matter. DEH and DTI will promptly produce all relevant documentation responsive to any request from OFAC and will respond promptly to any supplemental information requests. DEH and DTI will make their officers, employees, and agents available for interviews as OFAC may require, and will provide any additional information or clarification that may assist OFAC in its evaluation of this matter.

V. SUPPORTING DOCUMENTATION

The following supporting documentation is enclosed with this voluntary self-disclosure as appendices:

Appendix A: DTI Counterparty Onboarding File for Caspian Star Commodities DMCC (July 2021), including the KYC questionnaire completed by Caspian Star, corporate registry extracts from the DMCC, copies of Mr. Mammadov's UAE resident visa, two trade references from unrelated commodities trading firms, and the beneficial ownership declaration signed by Farid Mammadov on July 6, 2021 representing himself as the sole ultimate beneficial owner (100%) of Caspian Star.

Appendix B: HCS ScreenPro Screening Results for Caspian Star Commodities DMCC, including the initial screening conducted July 8–12, 2021 and the annual re-screening conducted in October 2022. Both screening reports reflect no matches against the OFAC SDN List, the EU Consolidated Sanctions List, or the UK OFSI Consolidated List.

Appendix C: Five Sale Contracts (ISDA-form Confirmations) for low-sulfur fuel oil (LSFO), 380 CST grade, with delivery FOB Fujairah, UAE, corresponding to Invoice Nos. CS-DTI-0091, CS-DTI-0094, CS-DTI-0101, CS-DTI-0108, and CS-DTI-0115.

Appendix D: Five Commercial Invoices issued by DTI to Caspian Star (Invoice Nos. CS-DTI-0091, CS-DTI-0094, CS-DTI-0101, CS-DTI-0108, and CS-DTI-0115), reflecting the transaction dates and amounts set forth in Section III.C above.

Appendix E: Wire Transfer Records from Ridgeline National Bank, N.A. for the five U.S. dollar-denominated payments associated with the subject transactions, including MT103 SWIFT messages for each transfer.

Appendix F: DTI Global Sanctions Compliance Policy, Version 3.2 (effective January 1, 2022), which was the operative compliance policy at the time of the subject transactions.

Appendix G: Email from Derek Huang, DEH Chief Compliance Officer, to Marcus Whitfield, DEH Senior Vice President and General Counsel, dated June 2, 2023, reporting the discovery of the SDN List annotation linking Caspian Star to Timur R. Kadyrov.

Appendix H: DTI Caspian Star Account Block Memorandum, dated June 5, 2023, documenting the blocking of Caspian Star as a counterparty and the freezing of all pending transactions in DTI's trading and compliance systems.

Appendix I: DEH Compliance Enhancement Summary, detailing all remedial measures implemented following the discovery of the apparent violations, including the HCS ScreenPro upgrade, the Omnivael Global Advisors engagement, the hiring of Kira Petrossian, the updated Compliance Policy (Version 4.0), and the completion of mandatory sanctions compliance training.

VI. CONCLUSION

DEH and DTI deeply regret these apparent violations and take seriously their obligations under the sanctions programs administered by OFAC. The apparent violations were inadvertent and resulted from circumstances in which the beneficial ownership link between a designated SDN and a DTI counterparty was not publicly discoverable through the screening tools and data sources reasonably available to DTI during the period in which the transactions occurred.

DEH and DTI are fully committed to ensuring that transactions of this nature do not recur. As set forth in detail above, DEH has already implemented comprehensive remedial enhancements to its sanctions compliance program, including an upgraded screening platform with enhanced beneficial ownership capabilities, quarterly counterparty re-screening, the engagement of an independent risk advisory firm, the hiring of a dedicated Sanctions Compliance Officer for DTI, and the completion of mandatory sanctions compliance training for all relevant personnel.

DEH and DTI respectfully request that OFAC take into account the voluntary nature of this disclosure, the inadvertent nature of the conduct, the absence of actual knowledge or willful intent, the prompt remedial action taken upon discovery, and the comprehensive remedial measures that have been implemented. In light of these mitigating factors, DEH and DTI respectfully request that OFAC resolve this matter without the imposition of a civil monetary penalty, or alternatively, that OFAC exercise its discretion to issue a Finding of Violation or a Cautionary Letter, as may be appropriate under the circumstances.

DEH and DTI remain available to provide any additional information, documentation, or clarification that OFAC may require in connection with its review of this matter. All communications regarding this disclosure should be directed to:

Priya Anand Calderwood & Harkness LLP 400 Park Avenue, 28th Floor New York, NY 10022 Tel: (212) 555-0147

Email: p.anand@calderwoodharkness.com

We appreciate OFAC's consideration of this voluntary self-disclosure and look forward to working cooperatively with OFAC to bring this matter to a prompt and appropriate resolution.

Respectfully submitted,