PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006, USA
MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT This memorandum was prepared by counsel at Calderwood & Harkness LLP in connection with the provision of legal advice to Dunmore Energy Holdings Ltd. and its affiliates. It is protected by the attorney-client privilege, the attorney work product doctrine, and any applicable common interest privileges. Distribution is restricted to the internal Calderwood & Harkness investigation team and authorized client representatives under the common interest agreement dated April 20, 2022. This memorandum should not be disclosed to any third party without the prior written consent of the undersigned or the Responsible Partner.
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I. Executive Summary
The purpose of this memorandum is to trace the complete designation history of Volkhov Industrial Group JSC ("Volkhov" or "VIG"), a Russian Joint Stock Company headquartered at 12 Kutuzovsky Prospekt, Moscow 121248, Russia, and chaired by Arkady Volkhov, under the sanctions programs administered by the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC"). This memorandum further applies the OFAC 50% Rule to assess the sanctions status of Petronova Trading FZE ("Petronova"), a Free Zone Establishment registered in the Jebel Ali Free Zone Authority, United Arab Emirates, managed by Sergei Volkov, a Russian national and UAE resident, with a registered address at Office 1407, Al Shafar Tower, Dubai Internet City, Dubai, UAE. The analysis has direct bearing on the pending inquiry by the U.S. Department of Justice ("DOJ") into the activities of Dunmore Energy Holdings Ltd. ("DEH") and its affiliates.
Volkhov's sanctions history proceeds in two distinct phases. First, on November 15, 2019, OFAC designated Volkhov under Directive 2 of Executive Order 13662, placing it on the Sectoral Sanctions Identifications ("SSI") List and subjecting it to sectoral sanctions targeting the energy sector of the Russian Federation. This designation imposed narrower restrictions than full blocking — principally prohibiting U.S. persons from transacting in, providing financing for, or otherwise dealing in new debt of longer than 90 days' maturity or new equity of entities identified on the SSI List. Second, on April 6, 2022, OFAC escalated the designation by adding Volkhov to the Specially Designated Nationals and blocked Persons List ("SDN List") pursuant to Executive Order 14024, imposing a comprehensive asset freeze and prohibiting all transactions and dealings by U.S. persons with Volkhov and any entities owned 50% or more by Volkhov.
The central analytical question in this memorandum is whether Petronova Trading FZE is deemed blocked or subject to sectoral restrictions by virtue of Volkhov's ownership or control, as assessed under OFAC's 50% Rule (codified at 31 C.F.R. Part 589 and set forth in OFAC's Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property Are blocked). As set forth in detail below, and in coordination with the parallel beneficial ownership memorandum prepared by Liam Donahue, dated June 15, 2022 (Doc. 33), the forensic ownership analysis and documentary evidence collected during this investigation support a determination that Petronova is 50%-or-more owned, directly or indirectly, by Volkhov Industrial Group JSC — and likely 100% beneficially owned by Volkhov and/or its chairman, Arkady Volkhov — through nominee arrangements involving Sergei Volkov.
This determination has significant implications for Dunmore Trading International Ltd. ("DTI," DIFC License No. CL-4827), Dunmore Energy Holdings Ltd. ("DEH," a Cayman Islands exempted company, Registration No. MC-334821), and the 14 crude oil swap transactions totaling approximately $218.7 million in notional value executed through Petronova and Zenith Petroleum DMCC between June 2020 and February 2022. Of these 14 transactions, Ridgeline Advisory Group LLC has determined that at least 9 transactions ($156.3 million in notional value) involved crude oil ultimately sourced from or destined for Volkhov-controlled entities. Under the 50% Rule:
• During the pre-April 6, 2022 period (Directive 2 sectoral sanctions): Petronova, as an entity 50%-or-more owned by Volkhov (an SSI-listed entity under Directive 2 since November 15, 2019), was itself subject to the Directive 2 sectoral sanctions restrictions throughout the entire period of the suspect transactions.
• Post-April 6, 2022 (full SDN blocking): Petronova became automatically blocked upon Volkhov's addition to the SDN List, regardless of the absence of a separate Petronova listing.
The analysis contained herein provides the foundational legal framework for the investigation's factual findings and the remediation and cooperation strategy pursued by Dunmore and this firm. It should be read in conjunction with the Petronova beneficial ownership analysis (Doc. 33), the broader OFAC sanctions framework memorandum (Doc. 30, Conrad Reeves, April 27, 2022), and the U.S. person nexus memorandum prepared by Jasmine Thornton (May 10, 2022).
II. Background
A. The DOJ Inquiry and This Memorandum's Role
On April 19, 2022, the National Security Division of the U.S. Department of Justice, through its Counterintelligence and Export Control Section ("CES"), formally opened an inquiry into the activities of Dunmore Energy Holdings Ltd. and its affiliates. On the same date, grand jury subpoena GJ No. 22-418 was issued by the U.S. District Court for the District of Columbia (Grand Jury 22-2), commanding the production of documents and records relating to, among other things, all transactions between DTI and Petronova Trading FZE, all transactions between DTI and Zenith Petroleum DMCC, and all records relating to Dunmore's sanctions compliance screening, counterparty due diligence, and know-your-customer procedures.
The DOJ investigation is led by three prosecutors within CES: Assistant United States Attorney Meredith Calloway, Trial Attorney Samuel Kovacs, and Trial Attorney Diana Pressman. Their inquiry focuses on potential violations of the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. §§ 1701–1706, arising from transactions involving sanctioned Russian entities, as well as potential violations of the Export Administration Regulations ("EAR") in connection with certain oilfield equipment exports.
Calderwood & Harkness LLP was retained by Dunmore Energy Holdings Ltd. on April 14, 2022 — five days prior to the formal opening of the DOJ inquiry and issuance of the grand jury subpoena — upon the recommendation of DEH's outside securities counsel following an initial internal alert by Gerald Fisk, then-Chief Compliance Officer of DEH. Victoria Chambers serves as the Responsible Partner for the engagement, leading the firm's internal investigation and defense strategy.
This memorandum is a component of the internal investigation workstream being conducted under the direction of the Responsible Partner. It has been prepared to provide legal analysis of Volkhov's OFAC designation history and to apply the 50% Rule to Petronova Trading FZE, thereby establishing the legal predicate for the investigation's factual analysis of the 14 suspect transactions. This memorandum complements and should be read together with the following work product:
• The Petronova Trading FZE beneficial ownership analysis (Doc. 33, Liam Donahue, June 15, 2022), which provides the detailed documentary and forensic basis for the ownership determination applied in this memorandum;
• The broader OFAC sanctions framework memorandum (Doc. 30, Conrad Reeves, April 27, 2022), which addresses the full scope of the OFAC regulatory regime applicable to the Dunmore transactions; and
• The U.S. person nexus and jurisdictional analysis memorandum (Doc. 37, Jasmine Thornton, May 10, 2022), which addresses the threshold jurisdictional question of whether DTI and its personnel qualify as "U.S. persons" under IEEPA and OFAC regulations.
B. Volkhov Industrial Group JSC — Corporate Profile
Volkhov Industrial Group JSC is a Joint Stock Company organized under the laws of the Russian Federation, with its principal executive offices located at 12 Kutuzovsky Prospekt, Moscow 121248, Russia. The company is chaired by Arkady Volkhov, who also serves as its controlling shareholder. VIG operates as a diversified Russian industrial conglomerate, with business operations spanning the energy sector (including upstream oil and gas exploration and production, midstream transportation, and downstream refining), heavy industry, metals production and processing, and infrastructure development and construction. The company maintains operations across the Russian Federation and, through a network of subsidiaries, joint ventures, and affiliated entities, has historically maintained a significant international presence in the Middle East, Central Asia, and Europe.
Volkhov Industrial Group JSC is of central significance to this investigation because it served as the ultimate beneficial counterparty — through intermediaries, including Petronova Trading FZE — to the crude oil swap transactions executed by Dunmore's Dubai-based trading desk at DTI. As set forth in greater detail in Part V below, the available evidence indicates that Petronova functioned as a front entity or conduit for Volkhov's commodity trading operations in the Middle East, with Sergei Volkov acting as a nominee shareholder and director on behalf of Volkhov and/or Arkady Volkhov.
C. Petronova Trading FZE — Corporate Profile
Petronova Trading FZE is a Free Zone Establishment ("FZE") registered with the Jebel Ali Free Zone Authority ("JAFZA") in the United Arab Emirates. Its registered address is Office 1407, Al Shafar Tower, Dubai Internet City, Dubai, UAE. The entity's Managing Director is Sergei Volkov, a Russian national and resident of the United Arab Emirates. Under the UAE's free zone regulatory framework, an FZE is a single-shareholder entity, and publicly available JAFZA records identify Sergei Volkov as the sole shareholder and managing director of Petronova.
Petronova's stated business activities include the trading of crude oil, refined petroleum products, petrochemicals, and related commodities. In the course of the Dunmore internal investigation, Petronova has been identified as a key intermediary through which DTI conducted a series of crude oil swap transactions between June 2020 and February 2022. The central allegation — supported by documentary evidence and witness statements reviewed in this investigation — is that Petronova functioned as a front for Volkhov Industrial Group JSC, with Sergei Volkov serving as a nominee or agent acting on behalf of Volkhov and/or Arkady Volkhov. This allegation is the predicate for the 50% Rule analysis set forth in Part V below.
D. Transactions at Issue — Summary
Between June 2020 and February 2022, Dunmore Trading International Ltd. ("DTI"), operating from its Dubai International Financial Centre ("DIFC") office under the supervision of its President, Derek Hargrave, and with the direct involvement of Senior Trader Natasha Sorokin, executed 14 crude oil swap transactions with Petronova Trading FZE and Zenith Petroleum DMCC. These transactions had a combined notional value of approximately $218.7 million.
Ridgeline Advisory Group LLC ("Ridgeline"), a forensic accounting and financial advisory firm engaged by Calderwood & Harkness under Engagement No. RAG-2022-0319 and led by Dr. Margaret Liu, CPA, CFE, conducted a comprehensive review of the transactional documentation, payment flows, and commodity sourcing records associated with these 14 transactions. Ridgeline's analysis, the results of which have been summarized in its preliminary report dated June 8, 2022, determined that at least 9 of the 14 transactions — representing approximately $156.3 million in notional value — involved crude oil that was ultimately sourced from or destined for entities controlled by Volkhov Industrial Group JSC. These 9 transactions form the core of the potential sanctions exposure identified in this investigation.
In addition to the crude oil swap transactions, the investigation has identified approximately $34.2 million in payments across 127 individual transactions that were routed through intermediary accounts maintained at Crescent Commercial Bank PJSC in Dubai between March 2020 and March 2022. The relationship manager for these accounts was Khalid Mansour. Ridgeline's preliminary analysis indicates that these payment flows were structured to obscure the beneficial ownership of the entities receiving and transmitting funds, and that a significant portion of these payments can be traced to or from Volkhov-connected entities. The structuring of payments through intermediary banking channels is a significant aggravating factor in the sanctions analysis, as it may support an inference of willfulness under IEEPA.
The investigation has also identified a related but distinct exposure involving oilfield equipment exports valued at approximately $12.4 million that were facilitated through Caspian Logistik GmbH, a German limited liability company (GmbH) based in Hamburg (Managing Director: Klaus Weidemann; registered at Mönckebergstraße 22, 20095 Hamburg, Germany). These exports implicate the Export Administration Regulations ("EAR"), specifically EAR § 746.5, and involve items classified under Export Control Classification Numbers ("ECCN") 2B350 and 2B999. The export controls analysis is addressed in a separate memorandum prepared by the undersigned, dated May 5, 2022, and is not the primary focus of this memorandum. However, any Volkhov ownership interest in Caspian Logistik would have additional sanctions implications under the 50% Rule, as discussed briefly in Part VIII below.
III. OFAC Designation History of Volkhov Industrial Group JSC
This Part traces the two-phase designation history of Volkhov Industrial Group JSC under OFAC-administered sanctions programs, from the initial sectoral sanctions designation in November 2019 through the full SDN blocking designation in April 2022.
A. Phase 1: Sectoral Sanctions Designation under Directive 2 of E.O. 13662 (November 15, 2019)
1. The Designation
On November 15, 2019, the Office of Foreign Assets Control designated Volkhov Industrial Group JSC under Directive 2 of Executive Order 13662, adding the entity to OFAC's Sectoral Sanctions Identifications ("SSI") List. This designation identified Volkhov as an entity operating in the energy sector of the Russian Federation and subjected it to the specific transactional prohibitions set forth in Directive 2.
2. Executive Order 13662 — Background
Executive Order 13662, titled "Blocking Property of Additional Persons Contributing to the Situation in Ukraine," was issued on March 20, 2014, as part of the U.S. government's response to the Russian Federation's actions in and relating to Ukraine. E.O. 13662 authorized the Secretary of the Treasury, in consultation with the Secretary of State, to impose sanctions on persons determined to operate in specified sectors of the Russian Federation economy, including the financial services, energy, metals and mining, engineering, and defense and related materiel sectors. Unlike Executive Order 13661 (which provided for SDN blocking of specific individuals), E.O. 13662 authorized a more calibrated, sector-specific approach — the so-called "sectoral sanctions" — designed to impose costs on Russia's key economic sectors while allowing certain other transactions to continue.
The sectoral sanctions are implemented through a series of Directives issued by OFAC, each of which prescribes the specific prohibitions applicable to entities identified in the relevant sector. Entities designated under E.O. 13662 are placed on the SSI List, rather than the SDN List, reflecting the narrower scope of the restrictions.
3. Directive 2 — Specific Prohibitions
Directive 2 under Executive Order 13662, as amended on September 29, 2017, applies to entities determined by the Secretary of the Treasury to be operating in the energy sector of the Russian Federation. Directive 2 prohibits U.S. persons from the following activities with respect to SSI-listed entities:
(a) Transacting in, providing financing for, or otherwise dealing in new debt of longer than 90 days' maturity of persons determined to be subject to Directive 2 or their property or interests in property; and
(b) Transacting in, providing financing for, or otherwise dealing in new equity of such persons or their property or interests in property.
It is critical to understand the scope — and the limitations — of the Directive 2 prohibitions. Directive 2 does not constitute a full asset freeze or blocking action. Unlike an SDN designation, which prohibits virtually all transactions and dealings with the designated person and requires blocking of all property and interests in property of that person within U.S. jurisdiction, Directive 2 imposes a narrower prohibition focused on capital markets and debt/equity transactions. Transactions in goods, services, and commodity trading with SSI-listed entities are not per se prohibited under Directive 2 alone. However, such transactions may be captured by Directive 2's prohibitions if they include a debt or equity component falling within the Directive's parameters (e.g., deferred payment arrangements exceeding 90 days, trade financing structures involving new debt issuance, or transactions involving equity interests in the SSI-listed entity).
4. Relevance to the Dunmore Transactions
The sectoral sanctions designation of Volkhov under Directive 2, effective November 15, 2019, did not categorically prohibit crude oil swap transactions between DTI and Volkhov-owned entities. Rather, the question of whether any of the 14 flagged transactions violated Directive 2 turns on the specific financial structure of each transaction — in particular, whether any component of the crude oil swap transactions constituted "dealing in new debt" of longer than 90 days' maturity or "new equity" within the meaning of Directive 2.
This is a nuanced and fact-intensive inquiry. Crude oil swap transactions may or may not involve debt or equity components, depending on their specific terms and conditions. Where a swap transaction includes deferred payment terms exceeding 90 days, for example, the payment obligation may constitute "new debt" within the scope of Directive 2. The transactional analysis of each of the 14 flagged swap transactions is addressed in the broader OFAC sanctions framework memorandum (Doc. 30, Conrad Reeves, April 27, 2022), and is not duplicated here. For purposes of this memorandum, the relevant point is that the Directive 2 restrictions were in effect for Volkhov from November 15, 2019 — and, as set forth in Part IV below, the 50% Rule extended those same restrictions to Petronova Trading FZE as a Volkhov-owned entity.
5. The 50% Rule Under Directive 2
A critical point, discussed in greater detail in Part IV.C below, is that OFAC's 50% Rule applies to sectoral sanctions designations. OFAC guidance expressly provides that entities owned 50% or more by an SSI-listed entity are themselves subject to the same sectoral sanctions restrictions applicable to the SSI-listed parent, even if the owned entity is not separately identified on the SSI List. This extension of Directive 2 restrictions to owned entities has direct application to the analysis of Petronova Trading FZE.
B. Phase 2: Full SDN blocking Designation under E.O. 14024 (April 6, 2022)
1. The Designation
On April 6, 2022, OFAC added Volkhov Industrial Group JSC to the Specially Designated Nationals and blocked Persons List ("SDN List") pursuant to Executive Order 14024. This action represented a significant escalation of the sanctions targeting Volkhov, elevating the entity from sectoral sanctions (which impose limited, transaction-specific prohibitions) to full blocking sanctions (which impose a comprehensive asset freeze and transaction prohibition).
2. Executive Order 14024 — Background
Executive Order 14024, titled "Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation," was issued on April 15, 2021, and has been amended on multiple occasions. E.O. 14024 authorizes the Secretary of the Treasury, in consultation with the Secretary of State, to impose blocking sanctions on any person determined, among other things, to:
(a) Operate or have operated in any sector of the Russian Federation economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State;
(b) Be responsible for or complicit in, or have directly or indirectly engaged or attempted to engage in, actions or policies that undermine democratic processes or institutions in the United States or abroad;
(c) Be responsible for or complicit in, or have directly or indirectly engaged or attempted to engage in, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of the United States, its allies, or its partners; or
(d) Be owned or controlled by, or have acted or purported to act for or on behalf of, any person whose property and interests in property are blocked pursuant to the order.
E.O. 14024 provides broad authority for designations targeting the Russian economy and Russian government-connected persons. Its scope is considerably broader than the sector-specific approach of E.O. 13662 and Directive 2, and its consequences — full SDN blocking — are significantly more severe.
3. Consequences of SDN Listing
The designation of Volkhov Industrial Group JSC on the SDN List under E.O. 14024 carries the following consequences:
(a) Asset Freeze: All property and interests in property of Volkhov Industrial Group JSC that are in the United States, or that hereafter come within the United States, or that are or hereafter come within the possession or control of any U.S. person, are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in.
(b) Transaction Prohibition: U.S. persons are prohibited from engaging in any transactions or dealings with Volkhov Industrial Group JSC, including but not limited to the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of the blocked entity.
(c) Extension to Owned Entities (50% Rule): The prohibitions described above extend to any entity that is owned, directly or indirectly, 50% or more by Volkhov Industrial Group JSC, whether or not such entity is separately identified on the SDN List. This is the automatic application of the OFAC 50% Rule, discussed in detail in Part IV below.
(d) Secondary Sanctions Risk: In addition to the primary sanctions applicable to U.S. persons, non-U.S. persons that engage in significant transactions with SDN-listed entities may be exposed to secondary sanctions risk, including the potential for their own designation on the SDN List.
4. Timing and Significance
The SDN designation of Volkhov became effective on April 6, 2022. This date is significant for the following reasons:
All 14 of the suspect crude oil swap transactions between DTI and Petronova/Zenith Petroleum were executed between June 2020 and February 2022. Every one of these transactions therefore predated the full SDN blocking designation. However, the pre-existing sectoral sanctions under Directive 2 (in effect since November 15, 2019) applied to Volkhov — and, by extension under the 50% Rule, to Petronova — throughout the entire period of the suspect transactions.
The SDN designation is nevertheless of critical importance for several reasons. First, it triggered the automatic blocking of all Volkhov-owned entities (including Petronova) under the 50% Rule, effective April 6, 2022, with prospective application. Second, the SDN designation intensified DOJ scrutiny of historical transactions with Volkhov and Volkhov-connected entities, as the transition from sectoral sanctions to full blocking underscored the U.S. government's assessment of Volkhov as a significant sanctions target. Third, the timing of the designation — just days before the opening of the DOJ inquiry — provides important context for understanding the investigative posture of the CES prosecutors.
5. Internal Detection
On April 11, 2022 — five days after the SDN designation — Gerald Fisk, then serving as Chief Compliance Officer of Dunmore Energy Holdings Ltd. and based at the company's Houston, Texas headquarters, conducted a routine OFAC screening refresh of Dunmore's counterparty database. During this screening, Fisk identified potential historical exposure to Volkhov Industrial Group JSC through Petronova Trading FZE. Specifically, Fisk noted that Volkhov's newly announced SDN designation, combined with previously available information regarding Petronova's apparent connections to Russian industrial interests, raised concerns about the nature of DTI's trading relationship with Petronova.
Fisk notified DEH General Counsel Marcus Wellbourne the same day, April 11, 2022. Wellbourne subsequently engaged outside securities counsel, who recommended the retention of Calderwood & Harkness LLP. The firm was formally retained on April 14, 2022, three days before the DOJ inquiry was formally opened.
C. Regulatory Citations
The following regulatory authorities are relevant to the designation history analyzed in this Part:
• Executive Order 13662, "Blocking Property of Additional Persons Contributing to the Situation in Ukraine" (March 20, 2014, as amended);
• Directive 2 under Executive Order 13662 (as amended September 29, 2017);
• Executive Order 14024, "Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation" (April 15, 2021, as amended);
• 31 C.F.R. Part 589 — Ukraine-/Russia-Related Sanctions Regulations;
• International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. §§ 1701–1706.
IV. The OFAC 50% Rule — Legal Framework
The 50% Rule is the analytical linchpin of the sanctions analysis in this memorandum. If Petronova Trading FZE is owned 50% or more, directly or indirectly, by Volkhov Industrial Group JSC (and/or by Arkady Volkhov), then Petronova is deemed subject to the same sanctions restrictions as Volkhov — regardless of whether Petronova is separately identified on any OFAC sanctions list. This Part sets forth the legal framework governing the 50% Rule, including its origin and codification, its application to both SDN blocking sanctions and sectoral sanctions under Directive 2, the aggregation principles applicable to multiple blocked persons, and the alternative theory of control.
A. Origin and Codification
OFAC's 50% Rule was formally articulated in OFAC's "Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property Are blocked," originally issued on August 13, 2014 (the "Revised Guidance"). The Revised Guidance was issued to clarify and update OFAC's longstanding position that the property blocking requirements of its sanctions programs extend not only to specifically designated persons but also to entities in which designated persons hold significant ownership interests.
Prior to the issuance of the Revised Guidance, OFAC had applied varying ownership thresholds in different contexts. The Revised Guidance standardized the ownership threshold at 50%, providing a clear, bright-line rule that has since been applied consistently across all OFAC blocking programs. The 50% threshold has been periodically reaffirmed through updated OFAC guidance documents, Frequently Asked Questions ("FAQs"), and enforcement actions.
The 50% Rule is codified in the Russia-related sanctions context in 31 C.F.R. Part 589 (the Ukraine-/Russia-Related Sanctions Regulations), which implements the sanctions authorities contained in Executive Orders 13660, 13661, 13662, and 13685, among others, and which has been updated to reflect the authorities contained in Executive Order 14024. The regulatory provisions of Part 589 incorporate the 50% ownership principle and provide that any entity in which a blocked person holds a 50%-or-greater ownership interest, individually or in the aggregate with other blocked persons, is itself deemed blocked by operation of law.
The core principle of the 50% Rule may be summarized as follows: Any entity that is owned, directly or indirectly, 50% or more by one or more blocked persons is itself considered blocked, regardless of whether it is separately identified on the SDN List or any other OFAC sanctions list. The rule operates automatically upon the designation of the parent or controlling blocked person; no separate OFAC action is required to designate the owned entity.
B. Application to SDN blocking Sanctions
When a person or entity is placed on the SDN List, the 50% Rule operates to extend the full scope of blocking sanctions to any entity in which the SDN-listed person holds a 50%-or-greater ownership interest. This means that all property and interests in property of the owned entity that are in the United States or in the possession or control of U.S. persons are blocked, and U.S. persons are prohibited from engaging in any transactions or dealings with the owned entity, in the same manner and to the same extent as if the owned entity itself had been designated on the SDN List.
Several important features of the 50% Rule as applied to SDN blocking sanctions warrant emphasis:
Direct and Indirect Ownership. The 50% Rule applies to both direct and indirect ownership. "Direct" ownership refers to situations where the blocked person holds shares or equity interests directly in the entity in question. "Indirect" ownership refers to situations where the blocked person's ownership interest is held through one or more intermediary entities. OFAC has made clear that it will trace ownership through multi-tiered corporate structures, including chains of intermediary holding companies, trusts, and other vehicles, to determine whether the 50% threshold is met at any level of the ownership chain.
For example, if blocked Person A owns 100% of Entity B, and Entity B owns 60% of Entity C, then blocked Person A is deemed to indirectly own 60% of Entity C — exceeding the 50% threshold — and Entity C is blocked by operation of the 50% Rule. This "look-through" principle is of direct relevance to the analysis of Petronova's ownership, where the evidence indicates that Volkhov's ownership interest flows through the nominee shareholding of Sergei Volkov.
Legal and Beneficial Ownership. OFAC has stated unequivocally that it looks to both legal and beneficial ownership in applying the 50% Rule. Where legal ownership structures — such as nominee arrangements, trust structures, or other intermediary vehicles — are used to obscure the beneficial ownership of an entity, OFAC will look through such arrangements to identify the true beneficial owner. The Revised Guidance emphasizes that "the 50 percent rule applies regardless of how ownership is structured," and that OFAC will apply the rule based on its assessment of beneficial ownership where legal ownership structures do not reflect the economic reality of the ownership arrangement.
This principle is of critical importance in the present matter, where the legal ownership of Petronova is vested in Sergei Volkov as the sole shareholder of the FZE, but the evidence supports a determination that Volkov holds his interest as a nominee or beneficial holder on behalf of Volkhov Industrial Group JSC and/or Arkady Volkhov.
Automatic Application. The blocking of an entity under the 50% Rule occurs automatically upon the designation of the parent or controlling blocked person. There is no requirement that OFAC separately designate or list the owned entity. The obligation to identify and comply with the 50% Rule falls on U.S. persons and their compliance programs. This places a significant burden on financial institutions, trading companies, and other market participants to conduct thorough beneficial ownership due diligence with respect to their counterparties.
C. Application to Sectoral Sanctions (Directive 2) Designations
OFAC guidance expressly extends the 50% Rule to sectoral sanctions designations under Executive Order 13662. An entity that is owned 50% or more by a person identified on the SSI List under any Directive of E.O. 13662 is subject to the same sectoral sanctions restrictions applicable to the SSI-listed parent entity, even if the owned entity is not itself separately identified on the SSI List.
This extension is critical for the pre-April 6, 2022 period in this matter. Volkhov Industrial Group JSC was designated under Directive 2 of E.O. 13662 on November 15, 2019, and remained subject to Directive 2 restrictions until April 6, 2022, when it was elevated to full SDN blocking status. If Petronova is owned 50% or more by Volkhov, then Petronova was itself subject to the Directive 2 sectoral sanctions restrictions — specifically, the prohibitions on dealing in new debt of longer than 90 days' maturity or new equity — for the entire period from November 15, 2019 through April 5, 2022. This period encompasses all 14 of the suspect crude oil swap transactions executed by DTI between June 2020 and February 2022.
The application of the 50% Rule to sectoral sanctions designations means that even during the period before full SDN blocking, transactions with Petronova involving debt or equity components within the scope of Directive 2 would have constituted violations of the OFAC-administered sanctions program — not because Petronova was itself listed, but because it was owned by a listed entity.
D. Aggregation of Ownership
The 50% Rule incorporates an aggregation principle. Where multiple blocked persons (or multiple SSI-listed persons, in the sectoral sanctions context) each hold an ownership interest of less than 50% in an entity, but their combined ownership interests reach or exceed the 50% threshold, the entity is deemed blocked (or subject to sectoral restrictions, as applicable).
This aggregation principle is relevant in the present matter if Arkady Volkhov (as an individual, who may be separately blocked or subject to sanctions in his own right) and Volkhov Industrial Group JSC (as an entity) hold separate ownership interests in Petronova that, when combined, aggregate to 50% or more. The available evidence indicates that Volkhov (the entity) and Arkady Volkhov (the individual chairman) are the true beneficial owners of Petronova, acting through the nominee shareholding of Sergei Volkov. The totality of the evidence suggests that the combined beneficial ownership interest of Volkhov and Arkady Volkhov in Petronova approaches or reaches 100%, far exceeding the 50% threshold.
Even if Arkady Volkhov were not independently subject to OFAC sanctions in his own right during the Directive 2 period, the aggregation principle would apply to combine his ownership interest (if any, held separately from the corporate entity) with the corporate entity's ownership interest for purposes of determining whether the 50% threshold is met. In practice, the evidence in this matter strongly supports a determination that Petronova is beneficially owned at or near 100% by Volkhov interests, rendering the aggregation analysis somewhat academic — but the principle is set forth here for completeness and to anticipate any argument that the ownership interest of the corporate entity alone does not reach the 50% threshold.
E. Control as an Alternative Basis
OFAC guidance recognizes that, in addition to the 50% ownership threshold, a blocked person's control over an entity may provide an alternative basis for sanctions exposure. However, the legal consequences of "control" differ from those of 50%-or-more ownership.
The 50% Rule is a bright-line test: if the ownership threshold is met, the entity is deemed blocked (or subject to sectoral restrictions) by operation of law, automatically and without the need for a separate OFAC determination. "Control," by contrast, does not automatically trigger the same blocking consequence. Rather, OFAC has indicated that where a blocked person exercises control over an entity — for example, through board control, management authority, voting power, or contractual arrangements — that entity may be separately designated by OFAC, or OFAC may issue guidance or enforcement actions treating transactions with the controlled entity as sanctionable. But the automatic, self-executing nature of the 50% ownership-based blocking does not apply to control alone.
In this matter, the evidence strongly supports a finding that Volkhov Industrial Group JSC exercised de facto control over Petronova's operations, regardless of the ownership determination. Pricing instructions flowed from Volkhov personnel to Petronova; Volkhov provided Petronova's operating capital; and Sergei Volkov functioned as a Volkhov-directed agent. These indicia of control reinforce the ownership determination and provide an alternative theory of sanctions exposure in the event that any question is raised regarding the 50% ownership analysis. The control analysis is addressed in greater detail in Part V.C below.
It bears emphasis, however, that the primary analysis in this memorandum is ownership-based. The evidence supports a determination that the 50% ownership threshold is met — and, indeed, far exceeded — rendering the control analysis a secondary or alternative theory rather than the primary basis for the sanctions determination.
V. Application of the 50% Rule to Petronova Trading FZE
This Part applies the legal framework set forth in Part IV to the specific facts regarding Petronova Trading FZE, drawing on the detailed beneficial ownership analysis prepared by Liam Donahue (Doc. 33, June 15, 2022) and the documentary and testimonial evidence collected during the investigation.
A. Ownership Structure of Petronova
1. Legal Ownership
The legal ownership structure of Petronova Trading FZE is straightforward on its face. As a Free Zone Establishment registered with JAFZA, Petronova is a single-shareholder entity. Available corporate records obtained from JAFZA identify Sergei Volkov as the sole shareholder and Managing Director of Petronova. No other shareholders or equity holders are identified in the publicly available formation documents, annual filings, or trade license records maintained by JAFZA.
On the basis of legal ownership records alone, Petronova would not appear to be owned by Volkhov Industrial Group JSC or by any sanctioned person. This is consistent with the general pattern observed in sanctions evasion schemes: entities are structured to obscure beneficial ownership through the use of nominee shareholders, front companies, and jurisdictions with limited corporate transparency requirements. The UAE's free zone regulatory framework, which permits the formation of single-shareholder FZEs with minimal public disclosure of beneficial ownership information, is particularly susceptible to such arrangements.
2. Beneficial Ownership — Documentary and Forensic Evidence
The beneficial ownership analysis prepared by Liam Donahue (Doc. 33, June 15, 2022) sets forth in detail the documentary and forensic evidence supporting the determination that Sergei Volkov holds his 100% legal interest in Petronova as a nominee or beneficial holder on behalf of Volkhov Industrial Group JSC and/or Arkady Volkhov. The key categories of evidence are summarized below; for the full analysis, including source document references and evidentiary assessments, the reader is directed to Doc. 33.
Wire Transfer and Financial Records. Ridgeline Advisory Group's forensic financial analysis traced the source of Petronova's operating capital to accounts controlled by Volkhov Industrial Group JSC and entities within the Volkhov corporate group. Specifically, Ridgeline identified wire transfers from accounts held at two Russian financial institutions — one of which is itself subject to OFAC sectoral sanctions — to accounts held by Petronova at Crescent Commercial Bank PJSC in Dubai. The total value of these capital infusions, which occurred between approximately February 2019 and December 2021, exceeds $27 million. The funds were transferred through a series of intermediary accounts that appear to have been designed to obscure the ultimate origin of the funds, but Ridgeline's tracing analysis — conducted in accordance with forensic accounting best practices and utilizing bank records obtained through legal process and voluntary production — identified the originating accounts as belonging to Volkhov-controlled entities. This pattern of capital provision is consistent with a nominee ownership arrangement in which the entity's true beneficial owner provides the operating funds while the nominal shareholder holds legal title on the owner's behalf.
Internal DTI Communications. Among the 2,347,812 documents collected by Nexagen Analytics Inc. (Project No. NX-DEH-2204) as part of the electronic document collection and review process, the investigation team identified numerous internal DTI communications that reveal DTI personnel's understanding of Petronova's connection to Volkhov. The most significant of these communications include:
(a) An email dated September 14, 2020, from Senior Trader Natasha Sorokin to Derek Hargrave, in which Sorokin referred to Petronova as "Arkady's vehicle" and stated: "Pricing on this one needs to go through V's people first. Sergei is just the front."
(b) A series of Vireo Software messages between Sorokin and a contact identified as a Volkhov employee (using the Westmark Services Inc. handle associated with a Volkhov Moscow office terminal), in which pricing and delivery terms for crude oil swap transactions were discussed and instructions were transmitted to Sorokin for relay to Petronova.
(c) An email chain dated November 3, 2021, between Sorokin and Hargrave, discussing the need to "keep the Volkhov connection clean" in DTI's compliance records and to ensure that counterparty documentation reflected Sergei Volkov as the principal rather than "the parent."
These communications, which are subject to ongoing privilege review and are being sequenced for potential production in response to the grand jury subpoena, provide compelling evidence that DTI personnel were aware of the Volkhov-Petronova connection and that Petronova was understood internally to be an instrumentality of Volkhov.
Cooperating Witness Statements. Omar Al-Rashidi, Head of Middle East Operations at DTI and a cooperating witness in the investigation, provided a detailed statement during his June 14, 2022 interview with Calderwood & Harkness counsel (attended by Victoria Chambers and Jasmine Thornton). Al-Rashidi stated that Derek Hargrave, President of DTI, had acknowledged Petronova's affiliation with Volkhov Industrial Group during internal meetings on multiple occasions. According to Al-Rashidi, Hargrave described Petronova as "Volkhov's Dubai arm" and indicated that the trading relationship with Petronova was structured to provide Volkhov with access to international commodity markets while insulating the transactions from direct association with the Volkhov name. Al-Rashidi further stated that he personally interacted with Sergei Volkov on numerous occasions in connection with the crude oil swap transactions, and that Volkov frequently deferred commercial decisions to "Moscow" — a reference that Al-Rashidi understood to mean Volkhov's headquarters on Kutuzovsky Prospekt.
Surname Analysis. The investigation team noted the phonetic similarity between the surnames "Volkov" (Sergei Volkov, Petronova's Managing Director) and "Volkhov" (Arkady Volkhov, VIG's chairman). While the surnames are distinct and the investigation has not confirmed a familial relationship between Sergei Volkov and Arkady Volkhov, the investigation has confirmed a longstanding business relationship between the two individuals predating the formation of Petronova. Ridgeline's analysis identified Sergei Volkov as a former employee of a Volkhov subsidiary in the early 2010s, and Al-Rashidi's statements indicate that Volkov was widely understood within DTI to be "Arkady's man in Dubai." The absence of a confirmed familial relationship does not diminish the significance of the nominee arrangement; nominee shareholders are frequently unrelated individuals selected for their willingness to serve as front persons.
B. Determination: 50% Ownership Threshold Met
Based on the totality of the evidence summarized above and set forth in detail in the Petronova beneficial ownership memorandum (Doc. 33), it is our assessment that Petronova Trading FZE is beneficially owned 50% or more — and, in all likelihood, 100% — by Volkhov Industrial Group JSC and/or Arkady Volkhov, acting through nominee arrangements involving Sergei Volkov.
The evidence supporting this determination includes: (i) the documented flow of operating capital from Volkhov-controlled accounts to Petronova; (ii) the internal DTI communications explicitly identifying Petronova as "Arkady's vehicle" and Sergei Volkov as "the front"; (iii) the cooperating witness testimony of Omar Al-Rashidi confirming Derek Hargrave's acknowledgment of the Volkhov-Petronova affiliation; and (iv) the longstanding business relationship between Sergei Volkov and the Volkhov organization. While the investigation has not obtained a copy of any written nominee agreement or other formal documentation expressly memorializing the nominee arrangement — such agreements, if they exist, would presumably be in the possession of Volkhov and/or Volkov and have not been produced — the circumstantial and documentary evidence is more than sufficient to support the beneficial ownership determination for purposes of this analysis.
Applying the OFAC 50% Rule to this ownership determination produces the following conclusions:
Pre-April 6, 2022 (Directive 2 Period). During the period from November 15, 2019 (the date of Volkhov's Directive 2 designation) through April 5, 2022 (the day before Volkhov's SDN designation), Petronova Trading FZE — as an entity 50%-or-more owned by Volkhov, an SSI-listed entity under Directive 2 of E.O. 13662 — was itself subject to the Directive 2 sectoral sanctions restrictions. This means that U.S. persons were prohibited from transacting in, providing financing for, or otherwise dealing in new debt of longer than 90 days' maturity or new equity of Petronova, in the same manner and to the same extent as if Petronova itself had been listed on the SSI List. All 14 of the suspect DTI crude oil swap transactions (executed between June 2020 and February 2022) fall within this period. To the extent that any of these transactions included debt or equity components within the scope of Directive 2 — a question addressed in the broader sanctions framework memorandum (Doc. 30) — they would constitute potential violations of OFAC-administered sanctions programs.
Post-April 6, 2022 (SDN blocking Period). Upon Volkhov's addition to the SDN List on April 6, 2022, Petronova Trading FZE became automatically blocked by operation of the 50% Rule. All property and interests in property of Petronova that are in the United States or in the possession or control of any U.S. person are blocked, and U.S. persons are prohibited from engaging in any transactions or dealings with Petronova. This blocking status continues in effect as of the date of this memorandum and will remain in effect unless and until Volkhov is removed from the SDN List, OFAC issues a specific license authorizing transactions with Petronova, or the ownership structure changes such that the 50% threshold is no longer met. Although no new DTI transactions with Petronova have been identified after February 2022, the automatic blocking of Petronova creates ongoing obligations for Dunmore and its affiliates to ensure that no new dealings with Petronova occur and that any blocked property is reported to OFAC in accordance with regulatory requirements.
C. Control Analysis (Alternative Theory)
As discussed in Part IV.E above, OFAC guidance recognizes that a blocked person's control over an entity may provide an alternative basis for sanctions exposure, even where the 50% ownership threshold is not met or is subject to challenge. In this matter, the evidence supports a robust finding that Volkhov Industrial Group JSC exercised de facto control over Petronova's operations, trading decisions, and financial flows, independent of the ownership determination.
The key indicia of Volkhov's control over Petronova include:
(a) Pricing Instructions. Internal DTI communications and Vireo Software messages demonstrate that pricing and commercial terms for crude oil swap transactions were communicated from Volkhov personnel (located in Moscow) to Petronova and/or to DTI personnel acting as Petronova's counterparts. Sergei Volkov did not exercise independent commercial judgment on pricing matters; rather, he implemented instructions received from the Volkhov organization.
(b) Operating Capital. As documented by Ridgeline's forensic analysis, Petronova's operating capital was provided by Volkhov-controlled entities, flowing from Russian bank accounts through intermediary accounts to Petronova's accounts in Dubai. The financial dependence of Petronova on Volkhov is a strong indicator of control.
(c) Agent-Principal Relationship. The totality of the evidence indicates that Sergei Volkov functioned as an agent or directed representative of Volkhov in managing Petronova's operations. Volkov's deference to "Moscow" on commercial decisions, his historical employment relationship with a Volkhov subsidiary, and his role as a nominee shareholder all support the characterization of Volkov as a Volkhov-directed agent rather than an independent entrepreneur.
While "control" alone does not trigger the automatic, self-executing blocking consequence of the 50% Rule, the evidence of control strengthens the argument that DOJ and OFAC would view transactions with Petronova as transactions with a Volkhov-connected entity for enforcement purposes. In the event that any challenge were raised to the 50% ownership determination — for example, based on the absence of a formal nominee agreement or the fact that legal title to Petronova's shares is vested in Volkov rather than Volkhov — the control evidence provides a separate and independent basis for concluding that Petronova was effectively a Volkhov instrumentality.
The control analysis also reinforces the potential willfulness argument. If DOJ concludes that Dunmore personnel knew or had reason to know that Petronova was controlled by Volkhov — which the internal DTI communications strongly suggest — the control relationship provides additional evidence that the transactions were conducted with knowledge of the Volkhov connection, even if the formal ownership analysis was not undertaken at the time of the transactions.
VI. Implications for the Dunmore Transactions
A. The 9 Tainted Crude Oil Swap Transactions
Of the 14 crude oil swap transactions totaling approximately $218.7 million in notional value, Ridgeline Advisory Group's forensic analysis determined that at least 9 transactions — with a combined notional value of approximately $156.3 million — involved crude oil that was ultimately sourced from or destined for entities controlled by Volkhov Industrial Group JSC, routed through Petronova Trading FZE. These 9 transactions constitute the core of the potential sanctions exposure identified in this investigation and form the basis for the voluntary disgorgement calculation discussed in Part VI.D below.
All 9 of the tainted crude oil swap transactions were executed between June 2020 and February 2022, falling entirely within the Directive 2 sectoral sanctions period. None of these transactions occurred after Volkhov's SDN designation on April 6, 2022. Under the 50% Rule analysis set forth in Part V.B above, Petronova was deemed to be a Volkhov-owned entity throughout this period, and was therefore subject to the Directive 2 sectoral sanctions restrictions applicable to Volkhov itself.
The question of whether these crude oil swap transactions constituted violations of Directive 2 depends on the specific financial structure of each transaction — in particular, whether any component of the swap arrangement constituted "dealing in new debt" of longer than 90 days' maturity or "new equity" within the meaning of Directive 2. This transactional analysis is addressed in the broader OFAC sanctions framework memorandum (Doc. 30, Conrad Reeves, April 27, 2022). Preliminary analysis indicates that at least some of the swap transactions included deferred payment terms and financing components that may fall within the scope of Directive 2's debt prohibition. The investigation team continues to work with Ridgeline to confirm the transactional details and assess the scope of Directive 2 exposure.
Regardless of the Directive 2 analysis, the transactions present significant sanctions compliance concerns. The fact that DTI — through its senior personnel — appears to have been aware of Petronova's connection to Volkhov, yet failed to conduct adequate counterparty due diligence or escalate the matter through compliance channels, represents a significant compliance failure with potential implications under IEEPA's willfulness standard.
B. Payment Structuring Through Crescent Commercial Bank PJSC
In addition to the crude oil swap transactions, the investigation identified approximately $34.2 million in payments across 127 individual transactions routed through intermediary accounts maintained at Crescent Commercial Bank PJSC in Dubai between March 2020 and March 2022. The relationship manager for the relevant accounts was Khalid Mansour. Ridgeline's forensic analysis indicates that these payments were structured to obscure the beneficial ownership of the entities receiving and transmitting funds, with multiple intermediary layers interposed between the originating Volkhov-controlled accounts and the ultimate recipients.
The structuring of payments through intermediary banking channels to obscure the involvement of sanctioned entities is a significant aggravating factor in the sanctions analysis. Under OFAC's Economic Sanctions Enforcement Guidelines, the use of deceptive practices, including the structuring of transactions to conceal the involvement of blocked or restricted parties, is treated as a significant aggravating factor in the determination of enforcement outcomes. Moreover, the deliberate structuring of payments to avoid detection by sanctions compliance screening systems may support an inference of willfulness under IEEPA (50 U.S.C. §§ 1701–1706), which is the predicate for criminal prosecution under the statute.
The payment structuring evidence is addressed in greater detail in Ridgeline's forensic financial analysis and in the parallel memoranda addressing the corporate structure of the transaction flows. For purposes of this memorandum, the key point is that the use of intermediary accounts to route payments between Volkhov-connected entities and DTI reinforces the conclusion that Petronova was a Volkhov instrumentality and that the transaction structure was designed to evade sanctions detection.
C. U.S. Person Nexus
The threshold question of whether DTI and its employees qualify as "U.S. persons" under IEEPA and OFAC regulations is addressed in the corporate structure and jurisdictional nexus memorandum prepared by Jasmine Thornton (May 10, 2022). The 50% Rule and the underlying sanctions prohibitions of Directive 2 and E.O. 14024 apply to "U.S. persons," a term defined broadly under IEEPA and OFAC regulations to include U.S. citizens, permanent resident aliens, entities organized under U.S. law, and any person in the United States.
The key jurisdictional nexus points identified in the investigation include:
(a) Dunmore Energy Holdings Ltd. — While DEH is a Cayman Islands exempted company (Registration No. MC-334821), it maintains its principal operational headquarters at 1200 McKinney Street, Suite 3400, Houston, TX 77010. The Houston office serves as the center of Dunmore's executive management, strategic decision-making, and compliance functions.
(b) Dunmore upstream Americas LLC — A Delaware limited liability company (EIN 84-2937561) and wholly-owned subsidiary of DEH, incorporated and operating in the United States.
(c) USD-Denominated Transactions — The crude oil swap transactions with Petronova were denominated in U.S. dollars and, in the ordinary course, cleared through U.S. correspondent banking channels. The use of U.S. dollar clearing creates a nexus to the United States and implicates U.S. sanctions jurisdiction.
(d) Natasha Sorokin — Senior Trader at DTI and a key participant in the suspect transactions. Sorokin is a Russian-American dual national and, as a U.S. citizen, is a "U.S. person" under OFAC regulations regardless of her physical location. Her involvement in the transactions conducted from DTI's Dubai office establishes a U.S. person nexus independent of any corporate jurisdictional analysis.
The U.S. person nexus analysis is detailed and fact-intensive, and the reader is directed to Jasmine Thornton's memorandum for the full analysis. For purposes of this memorandum, the existence of multiple and significant U.S. person nexus points supports the conclusion that OFAC and DOJ jurisdiction extends to the suspect transactions.
D. Implications for Voluntary Disgorgement Calculation
The voluntary disgorgement payment of $8.75 million to the U.S. Treasury, paid on November 30, 2023, was calculated based on the 9 tainted crude oil swap transactions identified through Ridgeline's forensic analysis. The calculation methodology was as follows:
$156.3 million (aggregate notional value of 9 tainted transactions) × 5.6% (estimated net margin on the transactions) = approximately $8.75 million.
The estimated net margin of 5.6% was derived from Ridgeline's analysis of DTI's internal profit and loss records for the relevant transactions, taking into account brokerage commissions, hedging costs, operational expenses, and related deductions from gross trading revenue. The voluntary disgorgement was designed to disgorge the full economic benefit derived by Dunmore from the tainted transactions, consistent with the DOJ's Corporate Enforcement Policy and OFAC's Economic Sanctions Enforcement Guidelines.
The 50% Rule analysis set forth in this memorandum provides the legal foundation for identifying these 9 transactions as "tainted" — that is, involving an entity (Petronova) that was deemed to be Volkhov-owned under the 50% Rule and therefore subject to OFAC sanctions restrictions. Without the 50% Rule analysis, the transactions would not have been identifiable as sanctions-related on the basis of publicly available counterparty information alone, since Petronova is not itself listed on any OFAC sanctions list. The 50% Rule is therefore the analytical bridge connecting the unlisted counterparty (Petronova) to the listed parent (Volkhov) and establishing the sanctions nexus.
VII. Implications for Zenith Petroleum DMCC
Zenith Petroleum DMCC is a company registered with the Dubai Multi Commodities Centre ("DMCC"), with a registered office at Unit 2201, Jumeirah Bay Tower X2, Cluster X, Jumeirah Lakes Towers, Dubai, UAE. Its Managing Director is Farhan Qureshi, a Pakistani national and UAE resident. Zenith Petroleum was involved in two of the 14 flagged crude oil swap transactions executed by DTI during the June 202