1016-00009 · Dunmore Energy Holdings · OFAC Voluntary Self-Disclosure

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PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT VOLUNTARY SELF-DISCLOSURE

CALDERWOOD & HARKNESS LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Telephone: (202) 448-7200 Facsimile: (202) 448-7201 www.calderwoodharkness.com

June 1, 2023

Calderwood & Harkness Matter No.: 1016-00009

Via Severin Partners LLC Overnight and Electronic Submission via OFAC's Online Portal

Office of Foreign Assets Control Compliance and Enforcement Division U.S. Department of the Treasury 1500 Pennsylvania Avenue NW Freedman's Bank Building Washington, DC 20220

Attention: Ms. Erin Matsuda, OFAC Compliance Analyst Attention: Director, Office of Foreign Assets Control

Re: Voluntary Self-Disclosure by Dunmore Energy Holdings Ltd. (Cayman Islands Exempted Company, Registration No. MC-334821) — Apparent Violations of OFAC-Administered Sanctions Programs (Executive Order 14024; Directive 2 under Executive Order 13662; 31 C.F.R. Part 589)

Dear Sir or Madam:

I. Introduction and Purpose

I am Victoria Chambers, a partner in the White Collar & Investigations practice at Calderwood & Harkness LLP in our Washington, D.C. office. I write on behalf of the firm's client, Dunmore Energy Holdings Ltd. ("Dunmore" or "DEH"), in connection with the enclosed Initial Voluntary Self-Disclosure ("VSD") being transmitted herewith to the Office of Foreign Assets Control ("OFAC") of the U.S. Department of the Treasury.

Calderwood & Harkness LLP was retained by Dunmore on April 14, 2022, in connection with an inquiry by the U.S. Department of Justice ("DOJ") into potential violations of U.S. sanctions laws and export control regulations involving certain of Dunmore's subsidiaries and their counterparties. Since that time, our firm has conducted a comprehensive internal investigation into the facts and circumstances underlying the potential violations described in this letter and in the enclosed VSD narrative.

The purpose of this letter is to transmit to OFAC, on behalf of Dunmore, the enclosed Initial Voluntary Self-Disclosure, together with supporting appendices and documentary materials, pursuant to OFAC's Economic Sanctions Enforcement Guidelines, codified at 31 C.F.R. Part 501, Appendix A, and related guidance published by OFAC regarding the procedures and expectations applicable to voluntary self-disclosures. This filing is made in accordance with 31 C.F.R. § 501.601 and the OFAC Enforcement Guidelines, which provide that voluntary self-disclosures constitute a mitigating factor in the determination of appropriate enforcement responses.

Dunmore is making this voluntary self-disclosure in good faith, voluntarily, and without any prior OFAC inquiry, investigation, or enforcement action directed at Dunmore or any of its subsidiaries. As of the date of this letter, Dunmore is not aware of any pending OFAC investigation or review involving Dunmore or its affiliated entities. Dunmore has not received any subpoena, administrative citation, pre-penalty notice, or other formal or informal communication from OFAC regarding the transactions described herein.

We note, however, that the DOJ National Security Division, Counterintelligence and Export Control Section, has an open inquiry into this matter. Specifically, a federal grand jury subpoena, bearing reference number GJ No. 22-418, was issued on April 19, 2022, by the U.S. District Court for the District of Columbia, Grand Jury 22-2, directed to Dunmore Energy Holdings Ltd. This VSD is being filed in coordination with, and with the full knowledge of, the DOJ. As discussed further in Section X below, the DOJ attorneys assigned to this matter are aware of, and do not object to, Dunmore's submission of this voluntary self-disclosure to OFAC.

Dunmore wishes to express, at the outset, its unequivocal commitment to full cooperation with OFAC throughout the review of this voluntary self-disclosure and any subsequent enforcement proceedings. Dunmore stands ready to provide any additional documentation, information, or testimony that OFAC may require, and to meet with OFAC staff at any time at OFAC's convenience.

II. Identification of the Disclosing Party

The disclosing party in this voluntary self-disclosure is Dunmore Energy Holdings Ltd., the particulars of which are set forth below:

Full Legal Name: Dunmore Energy Holdings Ltd.

Entity Type: Exempted company incorporated with limited liability under the laws of the Cayman Islands.

Cayman Islands Company Registration Number: MC-334821.

Registered Office: Harbour Place, 4th Floor, 103 South Church Street, George Town, Grand Cayman KY1-1002, Cayman Islands.

Operational Headquarters: 1200 McKinney Street, Suite 3400, Houston, Texas 77010, United States of America. Dunmore maintains its principal executive offices and the majority of its management functions at this location, and substantially all operational decisions relating to strategy, capital allocation, and compliance are made from or coordinated through this Houston headquarters.

Industry: Dunmore is engaged in oil and gas exploration, production, and trading, as well as renewable energy development. Dunmore and its subsidiaries operate across multiple jurisdictions, including the United States, the United Arab Emirates, the Cayman Islands, Germany, Nigeria, and the United Kingdom.

Annual Revenue (Fiscal Year 2021): Approximately $4.87 billion (consolidated).

Employees: Approximately 3,200 employees globally, distributed across Dunmore's operational subsidiaries.

Key Subsidiary at Issue:

Dunmore Trading International Ltd. ("DTI") — a limited company licensed in the Dubai International Financial Centre ("DIFC"), License No. CL-4827. DTI's principal office is located at Level 14, Gate Building 3, Dubai International Financial Centre, P.O. Box 506774, Dubai, United Arab Emirates. DTI serves as Dunmore's primary commodity trading arm and is the entity through which the transactions at issue in this VSD were conducted. DTI's operations include the buying, selling, and swapping of crude oil and refined petroleum products, as well as certain logistics and supply chain management activities.

Other Relevant Subsidiaries:

• Dunmore upstream Americas LLC — organized under the laws of the State of Delaware, with its principal office at 1200 McKinney Street, Suite 3400, Houston, Texas 77010, United States of America. Employer Identification Number ("EIN"): 84-2937561. This subsidiary is responsible for Dunmore's upstream oil and gas exploration and production activities in the Americas.

• Dunmore Renewables GmbH — organized under the laws of the Federal Republic of Germany, with its principal office in Hamburg, Germany. This subsidiary oversees Dunmore's renewable energy development portfolio in Europe.

• Dunmore Exploration West Africa Ltd. — organized under the laws of the Federal Republic of Nigeria, with its principal office in Lagos, Nigeria. This subsidiary manages Dunmore's upstream exploration activities in West Africa.

General Counsel: Marcus Wellbourne, Esq., who serves as Dunmore's General Counsel and is based at Dunmore's Houston headquarters.

Chief Compliance Officer: Priya Nayar, who was appointed as Dunmore's Chief Compliance Officer effective August 1, 2022, replacing Gerald Fisk, who departed Dunmore on June 10, 2022. Ms. Nayar reports directly to the General Counsel and has a dotted-line reporting relationship to the Audit and Compliance Committee of Dunmore's Board of Directors.

Ownership Structure: Dunmore's equity ownership is held as follows:

• Greystone Capital Partners Fund IV, L.P. — 62.5% equity interest. Greystone Capital Partners is a private equity firm headquartered in New York, New York.

• Dunmore Management — 22.5% equity interest, held by members of Dunmore's senior management team through a management equity participation plan.

• Thornbury Infrastructure Fund II, L.P. — 15.0% equity interest. Thornbury Infrastructure Fund II is an infrastructure-focused investment fund domiciled in the Cayman Islands.

III. Summary of Apparent Violations

Based on Calderwood & Harkness's comprehensive internal investigation, which is described in greater detail in Section IV below and in the enclosed VSD narrative, Dunmore has identified the following categories of apparent violations of OFAC-administered sanctions programs. Dunmore reports these matters to OFAC in the interest of full transparency and in furtherance of its commitment to compliance with U.S. sanctions laws.

Between approximately March 2020 and April 2022, DTI's Dubai-based trading desk, operating under the supervision of Derek Hargrave (then-President of DTI) and with the direct involvement of Natasha Sorokin (then-Senior Trader at DTI), engaged in a series of transactions involving counterparties with undisclosed ties to Volkhov Industrial Group JSC ("Volkhov" or "VIG"), a Russian industrial conglomerate with significant operations in the energy sector of the Russian Federation. The apparent violations are summarized below by category.

A. OFAC Designations of Volkhov Industrial Group JSC

Volkhov Industrial Group JSC is a joint stock company organized under the laws of the Russian Federation, with operations spanning oil and gas production, petrochemicals, and industrial manufacturing. Volkhov's sanctions history under OFAC-administered programs is as follows:

1. Directive 2 Designation (Sectoral Sanctions). On November 15, 2019, OFAC designated Volkhov under Directive 2 issued pursuant to Executive Order 13662 of March 20, 2014, which imposed sectoral sanctions on the energy sector of the Russian Federation. Directive 2 prohibits transactions by U.S. persons, or within the United States, involving new debt of longer than 90 days maturity or new equity of persons identified on the Sectoral Sanctions Identifications ("SSI") List as operating in the energy sector of the Russian Federation. Volkhov was added to the SSI List effective November 15, 2019.

2. SDN List Designation (Full blocking Sanctions). On April 6, 2022, OFAC designated Volkhov under Executive Order 14024 of April 15, 2021, and added Volkhov to the Specially Designated Nationals and blocked Persons List ("SDN List"), thereby imposing full blocking sanctions. This designation prohibits all transactions by U.S. persons with Volkhov and requires the blocking of all property and interests in property of Volkhov that are within the United States or within the possession or control of U.S. persons.

The relevant OFAC sanctions program governing these prohibitions is set forth at 31 C.F.R. Part 589 (Ukraine-/Russia-Related Sanctions Regulations).

B. Crude Oil Swap Transactions

Between June 2020 and February 2022, DTI executed fourteen (14) crude oil swap transactions with a total notional value of approximately $218.7 million. These transactions were conducted with two Dubai-based counterparties:

• Petronova Trading FZE — a Free Zone Establishment registered with the Jebel Ali Free Zone Authority ("JAFZA") in Dubai, United Arab Emirates, managed by Sergei Volkov, a Russian national resident in the United Arab Emirates.

• Zenith Petroleum DMCC — a company registered with the Dubai Multi Commodities Centre ("DMCC") in Dubai, United Arab Emirates, managed by Farhan Qureshi, a Pakistani national resident in the United Arab Emirates.

In the course of Calderwood & Harkness's internal investigation, the firm retained Ridgeline Advisory Group LLC ("Ridgeline"), a forensic accounting and investigative firm based in Washington, D.C., to conduct a comprehensive forensic analysis of the transactions at issue. Ridgeline was retained on May 2, 2022, under Engagement No. RAG-2022-0319. The forensic investigation was led by Dr. Margaret Liu, CPA, CFE, a managing director at Ridgeline with extensive experience in sanctions-related forensic matters.

Ridgeline's forensic analysis determined that at least nine (9) of the fourteen (14) crude oil swap transactions, with an aggregate 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. These nine transactions constitute apparent violations of Directive 2 under Executive Order 13662, which imposes sectoral sanctions prohibiting certain transactions in the energy sector involving designated persons identified on the SSI List. The forensic evidence supporting these conclusions, including payment flow analyses, vessel tracking data, and corporate registry information, is set forth in detail in the enclosed VSD narrative and in Appendix B.

The remaining five (5) transactions, while involving the same counterparties, have not been conclusively linked to Volkhov-controlled entities based on the evidence gathered to date. However, Dunmore reports these transactions to OFAC in the interest of full transparency and out of an abundance of caution.

C. Payment Structuring

Ridgeline Advisory Group's forensic analysis further identified approximately $34.2 million in payments routed through intermediary accounts held at Crescent Commercial Bank PJSC, a commercial bank headquartered in Dubai, United Arab Emirates. These payments were structured across one hundred twenty-seven (127) individual wire transactions conducted between March 2020 and March 2022. The structuring of these payments across numerous individual transfers, often in amounts calibrated to fall below internal compliance review thresholds, appears to have been designed to obscure the ultimate beneficial ownership of the Volkhov-connected entities receiving the funds. Detailed payment flow charts, transaction-level data, and beneficiary analyses are included in Appendix B to the enclosed VSD narrative.

D. Oilfield Equipment Exports (Cross-Reference to Export Control Violations)

In addition to the crude oil swap transactions described above, the internal investigation revealed that between August 2020 and January 2022, DTI facilitated the export of oilfield drilling equipment and components, classified under the Export Administration Regulations ("EAR") at Export Control Classification Numbers ("ECCN") 2B350 and 2B999, with an aggregate value of approximately $12.4 million. These items were shipped to end users in the Russian Federation through Caspian Logistik GmbH, a logistics and freight forwarding company organized under the laws of the Federal Republic of Germany, with its principal office at Mönckebergstraße 22, 20095 Hamburg, Germany, and managed by Klaus Weidemann, a German national.

While these shipments primarily implicate the Export Administration Regulations, specifically 15 C.F.R. § 746.5 (Russia/Belarus sanctions), they may also involve OFAC prohibitions to the extent that they benefited Volkhov-controlled entities or otherwise involved blocked persons or persons identified on the SSI List. Full details of these shipments, including end-user information, shipping documentation, and Ridgeline's analysis of the supply chain, are included in the enclosed VSD narrative and in Appendix D. Dunmore has separately addressed these potential EAR violations in filings with the Bureau of Industry and Security ("BIS") of the U.S. Department of Commerce.

E. Intermediary Entities

The internal investigation identified the following intermediary entities as relevant to the apparent violations described in this VSD:

1. Petronova Trading FZE. Office 1407, Al Shafar Tower, Dubai Internet City, Dubai, United Arab Emirates. Petronova is alleged to be a front entity operating on behalf of Volkhov Industrial Group JSC. The entity is managed by Sergei Volkov, a Russian national and UAE resident. Calderwood & Harkness's analysis, applying OFAC's 50 Percent Rule as set forth in OFAC's Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property Are blocked (August 13, 2014), indicates that Volkhov Industrial Group JSC holds or controls, directly or indirectly, a fifty percent (50%) or greater ownership interest in Petronova Trading FZE. The detailed beneficial ownership analysis supporting this conclusion is set forth in Appendix C to the enclosed VSD narrative.

2. Zenith Petroleum DMCC. Unit 2201, Jumeirah Bay Tower X2, Cluster X, Jumeirah Lakes Towers, Dubai, United Arab Emirates. Zenith is managed by Farhan Qureshi, a Pakistani national and UAE resident. Zenith was involved as a named counterparty in two of the nine flagged transactions. The evidence gathered to date suggests that Zenith may have served as an additional intermediary for Volkhov-connected transactions, although the ownership links are less direct than those identified with respect to Petronova. Additional details are provided in the enclosed VSD narrative.

3. Caspian Logistik GmbH. Mönckebergstraße 22, 20095 Hamburg, Germany. Managed by Klaus Weidemann, a German national. Caspian Logistik served as a logistics and freight forwarding facilitator for the oilfield equipment shipments described in Section III.D above. Ridgeline's investigation identified documentation suggesting that Caspian Logistik coordinated directly with Volkhov-affiliated entities regarding the delivery of equipment to end users in the Russian Federation.

IV. Summary of Internal Investigation and Cooperation with DOJ

Dunmore's internal investigation was initiated promptly upon the identification of potential sanctions exposure and has been comprehensive in scope. The key milestones and parameters of the investigation are as follows:

Identification of Potential Exposure. Upon the April 6, 2022 addition of Volkhov Industrial Group JSC to the SDN List under Executive Order 14024, Dunmore's then-Chief Compliance Officer, Gerald Fisk, conducted a routine OFAC screening refresh on April 11, 2022, utilizing Dunmore's sanctions screening software. This refresh identified potential historical exposure through Petronova Trading FZE based on an association between Sergei Volkov (Petronova's managing director) and Volkhov Industrial Group. Mr. Fisk immediately notified General Counsel Marcus Wellbourne of the potential exposure on the same day, April 11, 2022.

Retention of Outside Counsel. On April 14, 2022, Dunmore retained Calderwood & Harkness LLP to conduct an independent internal investigation into the potential sanctions violations and to advise Dunmore regarding its obligations under applicable law, including with respect to voluntary self-disclosure to OFAC and cooperation with the DOJ.

DOJ Grand Jury Subpoena. On April 19, 2022, the DOJ National Security Division, Counterintelligence and Export Control Section, issued grand jury subpoena GJ No. 22-418, directed to Dunmore Energy Holdings Ltd., through the U.S. District Court for the District of Columbia, Grand Jury 22-2. The subpoena required the production of documents relating to, among other things, DTI's trading relationships with Petronova Trading FZE and Zenith Petroleum DMCC, as well as oilfield equipment shipments through Caspian Logistik GmbH.

Scope of Document Collection and Review. Calderwood & Harkness, in coordination with Nexagen Analytics Inc. ("Nexagen"), a litigation technology and e-discovery services provider based in New York, New York (Project No. NX-DEH-2204), undertook a comprehensive document collection and review effort spanning six jurisdictions: the Cayman Islands, the United Arab Emirates, the United States, Germany, Nigeria, and the United Kingdom. A total of 2,347,812 documents were collected from custodial and non-custodial sources, including email, instant messaging platforms, shared network drives, cloud-based storage systems, and physical files. Following de-duplication, filtering, and technology-assisted review, 438,916 documents were deemed responsive to the matters under investigation. Of this total, 12,847 documents were withheld on the basis of attorney-client privilege and/or work product protection; privilege logs were prepared and submitted to the DOJ in accordance with the applicable grand jury procedures.

Witness Interviews. Calderwood & Harkness conducted interviews of forty-seven (47) current and former employees of Dunmore and its subsidiaries, conducted across three rounds of interviews between May 2022 and March 2023. The first round consisted of twenty-two (22) interviews conducted between May and August 2022, focusing on DTI's trading operations, counterparty onboarding procedures, and compliance functions. The second round consisted of fifteen (15) interviews conducted between September and December 2022, focusing on the specific transactions at issue and the roles of key individuals, including Derek Hargrave, Natasha Sorokin, and Gerald Fisk. The third round consisted of ten (10) supplemental interviews conducted between January and March 2023, addressing outstanding factual questions and topics identified during the forensic accounting analysis.

Forensic Accounting Analysis. Calderwood & Harkness retained Ridgeline Advisory Group LLC on May 2, 2022, under Engagement No. RAG-2022-0319, to conduct a comprehensive forensic accounting analysis of the financial transactions associated with DTI's dealings with Petronova Trading FZE, Zenith Petroleum DMCC, and related entities. The forensic investigation was led by Dr. Margaret Liu, CPA, CFE. Ridgeline's analysis encompassed bank records, wire transfer documentation, trade confirmations, vessel tracking data, bills of lading, corporate registry filings, and beneficial ownership records across multiple jurisdictions. Ridgeline's final forensic report was delivered to Calderwood & Harkness on April 1, 2023, and the key findings are incorporated in the enclosed VSD narrative and summarized in Appendix B.

Document Productions to DOJ. Dunmore, through Calderwood & Harkness, has made two substantial document productions to the DOJ in response to grand jury subpoena GJ No. 22-418:

• First Production (November 1, 2022): 287,412 documents, Bates-stamped DEH-DOJ-000001 through DEH-DOJ-287412.

• Second Production (January 30, 2023): 151,504 documents, Bates-stamped DEH-DOJ-287413 through DEH-DOJ-438916.

Internal Investigation Report to DOJ. On May 15, 2023, Calderwood & Harkness submitted a comprehensive internal investigation report to the DOJ, totaling 176 pages, which sets forth the factual findings, legal analysis, and conclusions of the internal investigation. This report forms the basis for the enclosed VSD narrative submitted to OFAC.

Proffers to DOJ. Calderwood & Harkness conducted an initial proffer session with Assistant United States Attorney ("AUSA") Meredith Calloway of the DOJ National Security Division on July 15, 2022, at which Calderwood & Harkness provided an initial overview of the facts and circumstances identified through the early stages of the investigation. A supplemental proffer was conducted on November 20, 2022, at which Calderwood & Harkness provided updated findings from the ongoing investigation, including preliminary forensic accounting results.

Dunmore has cooperated fully and voluntarily with the DOJ throughout the course of this inquiry, including by producing documents beyond the scope of the grand jury subpoena where relevant, facilitating the availability of current employees for interviews, and providing timely and candid communications regarding the progress and findings of the internal investigation.

V. Personnel Actions Taken

Dunmore has taken prompt and decisive personnel actions with respect to the individuals most closely associated with the apparent violations described in this VSD:

1. Natasha Sorokin (then-Senior Trader, DTI). Ms. Sorokin was placed on administrative leave on May 16, 2022, immediately upon the identification of evidence indicating her direct involvement in the transactions at issue. Ms. Sorokin was formally separated from Dunmore effective September 15, 2022. Ms. Sorokin is represented by Philip Keane of Wexford Keane LLP, Washington, D.C.

2. Derek Hargrave (then-President, DTI). Mr. Hargrave was placed on administrative leave on July 1, 2022, following the conclusion of the first round of witness interviews and the identification of evidence indicating that Mr. Hargrave supervised and approved the transactions at issue. Mr. Hargrave was formally separated from Dunmore effective October 1, 2022. Mr. Hargrave is represented by James Overstreet of Overstreet & McClain PLLC, Dallas, Texas.

3. Gerald Fisk (former Chief Compliance Officer, DEH). Mr. Fisk departed Dunmore on June 10, 2022. Although Mr. Fisk was the individual who first identified the potential exposure on April 11, 2022, the internal investigation identified concerns regarding the adequacy of the compliance screening procedures in place during Mr. Fisk's tenure as CCO. Mr. Fisk is represented by Catherine Blackthorn of Blackthorn & Associates LLP, Houston, Texas.

4. Priya Nayar (new Chief Compliance Officer, DEH). Ms. Nayar was appointed as Dunmore's Chief Compliance Officer effective August 1, 2022, replacing Mr. Fisk. Ms. Nayar is a seasoned compliance professional with extensive experience in sanctions and export control compliance, and she reports directly to General Counsel Marcus Wellbourne with a dotted-line reporting relationship to the Audit and Compliance Committee of the Board of Directors.

VI. Remediation Measures Undertaken and Planned

Dunmore has undertaken, and continues to undertake, significant remediation measures to address the compliance deficiencies identified through the internal investigation and to strengthen its sanctions and export controls compliance program going forward.

On December 15, 2022, Calderwood & Harkness retained Pemberton Investors Solutions LLC ("Marlowe Asset Management"), a compliance consulting firm based in Washington, D.C., to design and implement a comprehensive Enhanced Sanctions & Export Controls Compliance Program for Dunmore and its subsidiaries. The engagement is led by Dr. Anton Bremer, a former senior OFAC official and recognized expert in sanctions compliance program design. Marlowe Asset Management's remediation report, which will set forth the recommended program architecture, policies, procedures, and implementation timeline, is expected to be completed on or before September 15, 2023. As of the date of this letter, Marlowe Asset Management's engagement is actively underway.

The remediation measures undertaken to date, and those planned for implementation upon completion of Marlowe Asset Management's recommendations, include the following:

• Enhanced OFAC Screening Protocols. Dunmore has implemented enhanced sanctions screening protocols, including more frequent screening refreshes (daily rather than weekly), and the adoption of a risk-based approach to counterparty screening that incorporates fuzzy matching algorithms and multi-jurisdictional watchlist checks.

• Automated Sanctions Screening Integrated into Trade Execution Systems. Dunmore is in the process of integrating automated, real-time sanctions screening directly into DTI's trade execution and booking systems, such that no trade can be confirmed or settled without clearance through the automated screening module.

• Enhanced Counterparty Due Diligence Procedures. Dunmore has revised its counterparty onboarding and ongoing due diligence procedures to include, among other things, enhanced beneficial ownership verification, adverse media screening, and periodic re-verification of counterparty information at intervals no greater than twelve months.

• Export Control Classification Review Processes. Dunmore is implementing formalized export control classification review processes for all goods and technology transacted or shipped by DTI and other Dunmore subsidiaries, to ensure that items subject to EAR controls are properly classified and that appropriate licenses or license exceptions are obtained prior to export.

• Escalation Mechanisms. Dunmore has established formalized escalation mechanisms requiring that any potential sanctions or export control compliance issue identified by front-line personnel be immediately escalated to the Chief Compliance Officer and, as appropriate, to the General Counsel and outside counsel.

• Comprehensive Employee Training Program. Dunmore is developing and implementing a comprehensive sanctions and export controls compliance training program for all relevant personnel, including mandatory annual training for all DTI trading desk personnel, annual certification requirements, and tailored training modules for senior management and compliance staff.

The Dunmore Board of Directors is expected to formally adopt the Enhanced Sanctions & Export Controls Compliance Program upon completion of Marlowe Asset Management's remediation design work and finalization of the recommended policies and procedures. Dunmore is committed to providing OFAC with supplemental information regarding the progress and outcomes of its remediation efforts as they continue.

VII. Voluntary Disgorgement

Dunmore recognizes the seriousness of the apparent violations described in this VSD and is prepared to make a voluntary disgorgement payment to the U.S. Department of the Treasury representing the estimated net profits derived from the nine tainted crude oil swap transactions identified in Section III.B above.

The estimated disgorgement amount has been calculated as follows:

• Aggregate notional value of the 9 tainted transactions: approximately $156.3 million.

• Estimated net margin on the tainted transactions: approximately 5.6%, based on Ridgeline Advisory Group's forensic analysis of DTI's historical trading margins on comparable crude oil swap transactions.

• Estimated net profit: approximately $8,752,800 (rounded to approximately $8.75 million).

Dunmore intends to coordinate the timing and mechanism of the disgorgement payment with both the DOJ and OFAC, in order to ensure that any payments made are appropriately credited across the relevant enforcement proceedings. As of the date of this letter, Dunmore is expressing its intent to make such a payment and will work with OFAC and the DOJ to finalize the payment arrangements.

VIII. Mitigating Factors

Dunmore respectfully submits that the following mitigating factors, as set forth in OFAC's Economic Sanctions Enforcement Guidelines (31 C.F.R. Part 501, Appendix A), are applicable to this voluntary self-disclosure and should be considered by OFAC in determining the appropriate enforcement response:

1. Voluntary Self-Disclosure. Dunmore is making this disclosure to OFAC voluntarily, prior to any OFAC inquiry, investigation, or enforcement action directed at Dunmore or any of its subsidiaries. Under OFAC's Enforcement Guidelines, a voluntary self-disclosure is a significant mitigating factor that may result in a reduction of up to fifty percent (50%) of the applicable base penalty amount for non-egregious cases.

2. Full Cooperation. Dunmore has cooperated fully and voluntarily with the DOJ throughout the course of the government's inquiry and is committed to providing the same level of cooperation to OFAC. Dunmore has produced extensive documentation, made current and former employees available for interviews, and provided timely and transparent communications regarding the findings of the internal investigation.

3. Comprehensive Remediation. Dunmore has taken swift and decisive remediation measures, including the separation of the individuals primarily responsible for the apparent violations, the appointment of a new Chief Compliance Officer, and the engagement of a leading compliance consulting firm to design and implement an enhanced compliance program. These remediation efforts demonstrate Dunmore's genuine commitment to preventing the recurrence of similar violations.

4. Conduct Not Directed by Senior Management at the Parent Level. The evidence gathered through the internal investigation indicates that the conduct giving rise to the apparent violations was primarily attributable to individuals operating at the DTI trading desk level — specifically, Derek Hargrave (then-President of DTI) and Natasha Sorokin (then-Senior Trader at DTI). There is no evidence that senior management at the Dunmore parent level directed, authorized, or had knowledge of the sanctionable aspects of the transactions at issue.

5. No Prior OFAC Enforcement History. Neither Dunmore nor any of its subsidiaries has been the subject of any prior OFAC enforcement action, civil penalty, finding of violation, cautionary letter, or other adverse enforcement determination. Dunmore has no history of sanctions violations.

Dunmore respectfully requests that OFAC give appropriate weight to these mitigating factors in its evaluation of this matter, consistent with the framework set forth in the Enforcement Guidelines.

IX. Enclosed Materials

The following materials are enclosed with this letter and are being submitted to OFAC as part of this voluntary self-disclosure:

1. Voluntary Self-Disclosure Narrative. Comprehensive filing document setting forth the factual background, detailed transaction analysis, legal analysis, and conclusions of Dunmore's internal investigation, as prepared by Conrad Reeves, Senior Counsel, Export Controls & Sanctions, and Jasmine Thornton, Lead Associate, Calderwood & Harkness LLP.

2. Appendix A: Transaction Summary Schedule — All 14 Crude Oil Swap Transactions (June 2020 – February 2022). This schedule summarizes all fourteen crude oil swap transactions with an aggregate notional value of $218.7 million, and identifies the nine transactions ($156.3 million in aggregate notional value) determined to involve Volkhov-controlled entities.

3. Appendix B: Summary of Ridgeline Advisory Group Forensic Findings. This appendix presents the key findings of Ridgeline Advisory Group's forensic accounting analysis, including payment flow analysis documenting $34.2 million in payments across 127 transactions routed through intermediary accounts at Crescent Commercial Bank PJSC (Dubai, UAE).

4. Appendix C: Beneficial Ownership Analysis — Petronova Trading FZE and 50% Rule Assessment. This appendix sets forth Calderwood & Harkness's analysis of the beneficial ownership structure of Petronova Trading FZE and the application of OFAC's 50 Percent Rule to the determination that Petronova is owned or controlled by Volkhov Industrial Group JSC.

5. Appendix D: Oilfield Equipment Export Shipment Summary. This appendix summarizes the oilfield equipment shipments valued at approximately $12.4 million facilitated by DTI through Caspian Logistik GmbH, including ECCN classifications (2B350 and 2B999), shipment dates, consignees, and end-user information.

6. Appendix E: Organizational Chart — Dunmore Energy Holdings Ltd. and Relevant Subsidiaries. This appendix provides a graphical organizational chart depicting the corporate structure of Dunmore Energy Holdings Ltd. and its relevant subsidiaries, including DTI.

7. Appendix F: Timeline of Key Events. This appendix provides a chronological timeline of the key events relevant to this voluntary self-disclosure, including the dates of the transactions at issue, the identification of potential exposure, the retention of counsel, the DOJ subpoena, and the milestones of the internal investigation.

X. Coordination with DOJ

Dunmore wishes to confirm that the DOJ attorneys assigned to this matter are aware of, and have been informed regarding, the filing of this voluntary self-disclosure with OFAC. Specifically, AUSA Meredith Calloway, together with Trial Attorneys Samuel Kovacs and Diana Pressman of the DOJ National Security Division, Counterintelligence and Export Control Section, have been notified that Dunmore is submitting this VSD to OFAC concurrently with the ongoing DOJ inquiry.

As noted in Section IV above, Calderwood & Harkness submitted its comprehensive internal investigation report, totaling 176 pages, to the DOJ on May 15, 2023. That report addresses the same underlying facts and transactions that are the subject of this voluntary self-disclosure.

Dunmore hereby consents to coordination and information sharing between OFAC and the DOJ with respect to this matter, to the extent permissible under applicable law and regulations. Dunmore recognizes that interagency coordination is appropriate in cases involving potential violations of both OFAC-administered sanctions programs and other federal laws, and Dunmore waives no rights or privileges by consenting to such coordination.

XI. Point of Contact and Request for Acknowledgment

The primary point of contact for OFAC regarding this voluntary self-disclosure and all related matters is:

Victoria Chambers Partner, White Collar & Investigations Calderwood & Harkness LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Telephone: (202) 448-7215

Email: vchambers@calderwoodharkness.com

Additional contacts authorized to communicate with OFAC on behalf of Dunmore regarding this matter include:

Conrad Reeves Senior Counsel, Export Controls & Sanctions Calderwood & Harkness LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Telephone: (202) 448-7238

Email: creeves@calderwoodharkness.com

Jasmine Thornton Lead Associate Calderwood & Harkness LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Telephone: (202) 448-7244

Email: jthornton@calderwoodharkness.com

We respectfully request that OFAC provide written acknowledgment of its receipt of this voluntary self-disclosure at its earliest convenience, and that such acknowledgment be directed to Victoria Chambers at the address, telephone number, or email address set forth above.

Dunmore and Calderwood & Harkness are available to provide any additional information, documentation, or clarification that OFAC may require in connection with its review of this voluntary self-disclosure. We are prepared to meet with OFAC staff at OFAC's convenience to discuss the contents of this filing and to answer any questions that may arise. Dunmore will continue to provide supplemental information to OFAC as the investigation and remediation efforts described herein progress.

Closing

Dunmore Energy Holdings Ltd. wishes to express its unequivocal commitment to full compliance with all OFAC-administered sanctions programs going forward. Dunmore takes its obligations under U.S. sanctions laws with the utmost seriousness and has invested, and will continue to invest, substantial resources to ensure that its operations, and those of its subsidiaries worldwide, are conducted in accordance with all applicable legal requirements.

We thank the Office of Foreign Assets Control for its consideration of this voluntary self-disclosure and look forward to working cooperatively with OFAC throughout the review process.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Victoria Chambers Partner, White Collar & Investigations Calderwood & Harkness LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Telephone: (202) 448-7215

Email: vchambers@calderwoodharkness.com

cc: (via email)

Marcus Wellbourne, Esq., General Counsel, Dunmore Energy Holdings Ltd. Priya Nayar, Chief Compliance Officer, Dunmore Energy Holdings Ltd. Howard Quinn, Billing Partner, Calderwood & Harkness LLP Conrad Reeves, Senior Counsel, Calderwood & Harkness LLP Jasmine Thornton, Lead Associate, Calderwood & Harkness LLP

Enclosures:

1. Voluntary Self-Disclosure Narrative

2. Appendix A: Transaction Summary Schedule — All 14 Crude Oil Swap Transactions (June 2020 – February 2022)

3. Appendix B: Summary of Ridgeline Advisory Group Forensic Findings

4. Appendix C: Beneficial Ownership Analysis — Petronova Trading FZE and 50% Rule Assessment

5. Appendix D: Oilfield Equipment Export Shipment Summary

6. Appendix E: Organizational Chart — Dunmore Energy Holdings Ltd. and Relevant Subsidiaries

7. Appendix F: Timeline of Key Events

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT VOLUNTARY SELF-DISCLOSURE
CALDERWOOD & HARKNESS LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Telephone: (202) 448-7200 Facsimile: (202) 448-7201 www.calderwoodharkness.com
June 1, 2023
Calderwood & Harkness Matter No.: 1016-00009
Via Severin Partners LLC Overnight and Electronic Submission via OFAC's Online Portal
Office of Foreign Assets Control Compliance and Enforcement Division U.S. Department of the Treasury 1500 Pennsylvania Avenue NW Freedman's Bank Building Washington, DC 20220
Attention: Ms. Erin Matsuda, OFAC Compliance Analyst Attention: Director, Office of Foreign Assets Control
Re: Voluntary Self-Disclosure by Dunmore Energy Holdings Ltd. (Cayman Islands Exempted Company, Registration No. MC-334821) — Apparent Violations of OFAC-Administered Sanctions Programs (Executive Order 14024; Directive 2 under Executive Order 13662; 31 C.F.R. Part 589)
Dear Sir or Madam:
I. Introduction and Purpose
I am Victoria Chambers, a partner in the White Collar & Investigations practice at Calderwood & Harkness LLP in our Washington, D.C. office. I write on behalf of the firm's client, Dunmore Energy Holdings Ltd. ("Dunmore" or "DEH"), in connection with the enclosed Initial Voluntary Self-Disclosure ("VSD") being transmitted herewith to the Office of Foreign Assets Control ("OFAC") of the U.S. Department of the Treasury.
Calderwood & Harkness LLP was retained by Dunmore on April 14, 2022, in connection with an inquiry by the U.S. Department of Justice ("DOJ") into potential violations of U.S. sanctions laws and export control regulations involving certain of Dunmore's subsidiaries and their counterparties. Since that time, our firm has conducted a comprehensive internal investigation into the facts and circumstances underlying the potential violations described in this letter and in the enclosed VSD narrative.
The purpose of this letter is to transmit to OFAC, on behalf of Dunmore, the enclosed Initial Voluntary Self-Disclosure, together with supporting appendices and documentary materials, pursuant to OFAC's Economic Sanctions Enforcement Guidelines, codified at 31 C.F.R. Part 501, Appendix A, and related guidance published by OFAC regarding the procedures and expectations applicable to voluntary self-disclosures. This filing is made in accordance with 31 C.F.R. § 501.601 and the OFAC Enforcement Guidelines, which provide that voluntary self-disclosures constitute a mitigating factor in the determination of appropriate enforcement responses.
Dunmore is making this voluntary self-disclosure in good faith, voluntarily, and without any prior OFAC inquiry, investigation, or enforcement action directed at Dunmore or any of its subsidiaries. As of the date of this letter, Dunmore is not aware of any pending OFAC investigation or review involving Dunmore or its affiliated entities. Dunmore has not received any subpoena, administrative citation, pre-penalty notice, or other formal or informal communication from OFAC regarding the transactions described herein.
We note, however, that the DOJ National Security Division, Counterintelligence and Export Control Section, has an open inquiry into this matter. Specifically, a federal grand jury subpoena, bearing reference number GJ No. 22-418, was issued on April 19, 2022, by the U.S. District Court for the District of Columbia, Grand Jury 22-2, directed to Dunmore Energy Holdings Ltd. This VSD is being filed in coordination with, and with the full knowledge of, the DOJ. As discussed further in Section X below, the DOJ attorneys assigned to this matter are aware of, and do not object to, Dunmore's submission of this voluntary self-disclosure to OFAC.
Dunmore wishes to express, at the outset, its unequivocal commitment to full cooperation with OFAC throughout the review of this voluntary self-disclosure and any subsequent enforcement proceedings. Dunmore stands ready to provide any additional documentation, information, or testimony that OFAC may require, and to meet with OFAC staff at any time at OFAC's convenience.
II. Identification of the Disclosing Party
The disclosing party in this voluntary self-disclosure is Dunmore Energy Holdings Ltd., the particulars of which are set forth below:
Full Legal Name: Dunmore Energy Holdings Ltd.
Entity Type: Exempted company incorporated with limited liability under the laws of the Cayman Islands.
Cayman Islands Company Registration Number: MC-334821.
Registered Office: Harbour Place, 4th Floor, 103 South Church Street, George Town, Grand Cayman KY1-1002, Cayman Islands.
Operational Headquarters: 1200 McKinney Street, Suite 3400, Houston, Texas 77010, United States of America. Dunmore maintains its principal executive offices and the majority of its management functions at this location, and substantially all operational decisions relating to strategy, capital allocation, and compliance are made from or coordinated through this Houston headquarters.
Industry: Dunmore is engaged in oil and gas exploration, production, and trading, as well as renewable energy development. Dunmore and its subsidiaries operate across multiple jurisdictions, including the United States, the United Arab Emirates, the Cayman Islands, Germany, Nigeria, and the United Kingdom.
Annual Revenue (Fiscal Year 2021): Approximately $4.87 billion (consolidated).
Employees: Approximately 3,200 employees globally, distributed across Dunmore's operational subsidiaries.
Key Subsidiary at Issue:
Dunmore Trading International Ltd. ("DTI") — a limited company licensed in the Dubai International Financial Centre ("DIFC"), License No. CL-4827. DTI's principal office is located at Level 14, Gate Building 3, Dubai International Financial Centre, P.O. Box 506774, Dubai, United Arab Emirates. DTI serves as Dunmore's primary commodity trading arm and is the entity through which the transactions at issue in this VSD were conducted. DTI's operations include the buying, selling, and swapping of crude oil and refined petroleum products, as well as certain logistics and supply chain management activities.
Other Relevant Subsidiaries:
• Dunmore upstream Americas LLC — organized under the laws of the State of Delaware, with its principal office at 1200 McKinney Street, Suite 3400, Houston, Texas 77010, United States of America. Employer Identification Number ("EIN"): 84-2937561. This subsidiary is responsible for Dunmore's upstream oil and gas exploration and production activities in the Americas.
• Dunmore Renewables GmbH — organized under the laws of the Federal Republic of Germany, with its principal office in Hamburg, Germany. This subsidiary oversees Dunmore's renewable energy development portfolio in Europe.
• Dunmore Exploration West Africa Ltd. — organized under the laws of the Federal Republic of Nigeria, with its principal office in Lagos, Nigeria. This subsidiary manages Dunmore's upstream exploration activities in West Africa.
General Counsel: Marcus Wellbourne, Esq., who serves as Dunmore's General Counsel and is based at Dunmore's Houston headquarters.
Chief Compliance Officer: Priya Nayar, who was appointed as Dunmore's Chief Compliance Officer effective August 1, 2022, replacing Gerald Fisk, who departed Dunmore on June 10, 2022. Ms. Nayar reports directly to the General Counsel and has a dotted-line reporting relationship to the Audit and Compliance Committee of Dunmore's Board of Directors.
Ownership Structure: Dunmore's equity ownership is held as follows:
• Greystone Capital Partners Fund IV, L.P. — 62.5% equity interest. Greystone Capital Partners is a private equity firm headquartered in New York, New York.
• Dunmore Management — 22.5% equity interest, held by members of Dunmore's senior management team through a management equity participation plan.
• Thornbury Infrastructure Fund II, L.P. — 15.0% equity interest. Thornbury Infrastructure Fund II is an infrastructure-focused investment fund domiciled in the Cayman Islands.
III. Summary of Apparent Violations
Based on Calderwood & Harkness's comprehensive internal investigation, which is described in greater detail in Section IV below and in the enclosed VSD narrative, Dunmore has identified the following categories of apparent violations of OFAC-administered sanctions programs. Dunmore reports these matters to OFAC in the interest of full transparency and in furtherance of its commitment to compliance with U.S. sanctions laws.
Between approximately March 2020 and April 2022, DTI's Dubai-based trading desk, operating under the supervision of Derek Hargrave (then-President of DTI) and with the direct involvement of Natasha Sorokin (then-Senior Trader at DTI), engaged in a series of transactions involving counterparties with undisclosed ties to Volkhov Industrial Group JSC ("Volkhov" or "VIG"), a Russian industrial conglomerate with significant operations in the energy sector of the Russian Federation. The apparent violations are summarized below by category.
A. OFAC Designations of Volkhov Industrial Group JSC
Volkhov Industrial Group JSC is a joint stock company organized under the laws of the Russian Federation, with operations spanning oil and gas production, petrochemicals, and industrial manufacturing. Volkhov's sanctions history under OFAC-administered programs is as follows:
1. Directive 2 Designation (Sectoral Sanctions). On November 15, 2019, OFAC designated Volkhov under Directive 2 issued pursuant to Executive Order 13662 of March 20, 2014, which imposed sectoral sanctions on the energy sector of the Russian Federation. Directive 2 prohibits transactions by U.S. persons, or within the United States, involving new debt of longer than 90 days maturity or new equity of persons identified on the Sectoral Sanctions Identifications ("SSI") List as operating in the energy sector of the Russian Federation. Volkhov was added to the SSI List effective November 15, 2019.
2. SDN List Designation (Full blocking Sanctions). On April 6, 2022, OFAC designated Volkhov under Executive Order 14024 of April 15, 2021, and added Volkhov to the Specially Designated Nationals and blocked Persons List ("SDN List"), thereby imposing full blocking sanctions. This designation prohibits all transactions by U.S. persons with Volkhov and requires the blocking of all property and interests in property of Volkhov that are within the United States or within the possession or control of U.S. persons.
The relevant OFAC sanctions program governing these prohibitions is set forth at 31 C.F.R. Part 589 (Ukraine-/Russia-Related Sanctions Regulations).
B. Crude Oil Swap Transactions
Between June 2020 and February 2022, DTI executed fourteen (14) crude oil swap transactions with a total notional value of approximately $218.7 million. These transactions were conducted with two Dubai-based counterparties:
• Petronova Trading FZE — a Free Zone Establishment registered with the Jebel Ali Free Zone Authority ("JAFZA") in Dubai, United Arab Emirates, managed by Sergei Volkov, a Russian national resident in the United Arab Emirates.
• Zenith Petroleum DMCC — a company registered with the Dubai Multi Commodities Centre ("DMCC") in Dubai, United Arab Emirates, managed by Farhan Qureshi, a Pakistani national resident in the United Arab Emirates.
In the course of Calderwood & Harkness's internal investigation, the firm retained Ridgeline Advisory Group LLC ("Ridgeline"), a forensic accounting and investigative firm based in Washington, D.C., to conduct a comprehensive forensic analysis of the transactions at issue. Ridgeline was retained on May 2, 2022, under Engagement No. RAG-2022-0319. The forensic investigation was led by Dr. Margaret Liu, CPA, CFE, a managing director at Ridgeline with extensive experience in sanctions-related forensic matters.
Ridgeline's forensic analysis determined that at least nine (9) of the fourteen (14) crude oil swap transactions, with an aggregate 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. These nine transactions constitute apparent violations of Directive 2 under Executive Order 13662, which imposes sectoral sanctions prohibiting certain transactions in the energy sector involving designated persons identified on the SSI List. The forensic evidence supporting these conclusions, including payment flow analyses, vessel tracking data, and corporate registry information, is set forth in detail in the enclosed VSD narrative and in Appendix B.
The remaining five (5) transactions, while involving the same counterparties, have not been conclusively linked to Volkhov-controlled entities based on the evidence gathered to date. However, Dunmore reports these transactions to OFAC in the interest of full transparency and out of an abundance of caution.
C. Payment Structuring
Ridgeline Advisory Group's forensic analysis further identified approximately $34.2 million in payments routed through intermediary accounts held at Crescent Commercial Bank PJSC, a commercial bank headquartered in Dubai, United Arab Emirates. These payments were structured across one hundred twenty-seven (127) individual wire transactions conducted between March 2020 and March 2022. The structuring of these payments across numerous individual transfers, often in amounts calibrated to fall below internal compliance review thresholds, appears to have been designed to obscure the ultimate beneficial ownership of the Volkhov-connected entities receiving the funds. Detailed payment flow charts, transaction-level data, and beneficiary analyses are included in Appendix B to the enclosed VSD narrative.
D. Oilfield Equipment Exports (Cross-Reference to Export Control Violations)
In addition to the crude oil swap transactions described above, the internal investigation revealed that between August 2020 and January 2022, DTI facilitated the export of oilfield drilling equipment and components, classified under the Export Administration Regulations ("EAR") at Export Control Classification Numbers ("ECCN") 2B350 and 2B999, with an aggregate value of approximately $12.4 million. These items were shipped to end users in the Russian Federation through Caspian Logistik GmbH, a logistics and freight forwarding company organized under the laws of the Federal Republic of Germany, with its principal office at Mönckebergstraße 22, 20095 Hamburg, Germany, and managed by Klaus Weidemann, a German national.
While these shipments primarily implicate the Export Administration Regulations, specifically 15 C.F.R. § 746.5 (Russia/Belarus sanctions), they may also involve OFAC prohibitions to the extent that they benefited Volkhov-controlled entities or otherwise involved blocked persons or persons identified on the SSI List. Full details of these shipments, including end-user information, shipping documentation, and Ridgeline's analysis of the supply chain, are included in the enclosed VSD narrative and in Appendix D. Dunmore has separately addressed these potential EAR violations in filings with the Bureau of Industry and Security ("BIS") of the U.S. Department of Commerce.
E. Intermediary Entities
The internal investigation identified the following intermediary entities as relevant to the apparent violations described in this VSD:
1. Petronova Trading FZE. Office 1407, Al Shafar Tower, Dubai Internet City, Dubai, United Arab Emirates. Petronova is alleged to be a front entity operating on behalf of Volkhov Industrial Group JSC. The entity is managed by Sergei Volkov, a Russian national and UAE resident. Calderwood & Harkness's analysis, applying OFAC's 50 Percent Rule as set forth in OFAC's Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property Are blocked (August 13, 2014), indicates that Volkhov Industrial Group JSC holds or controls, directly or indirectly, a fifty percent (50%) or greater ownership interest in Petronova Trading FZE. The detailed beneficial ownership analysis supporting this conclusion is set forth in Appendix C to the enclosed VSD narrative.
2. Zenith Petroleum DMCC. Unit 2201, Jumeirah Bay Tower X2, Cluster X, Jumeirah Lakes Towers, Dubai, United Arab Emirates. Zenith is managed by Farhan Qureshi, a Pakistani national and UAE resident. Zenith was involved as a named counterparty in two of the nine flagged transactions. The evidence gathered to date suggests that Zenith may have served as an additional intermediary for Volkhov-connected transactions, although the ownership links are less direct than those identified with respect to Petronova. Additional details are provided in the enclosed VSD narrative.
3. Caspian Logistik GmbH. Mönckebergstraße 22, 20095 Hamburg, Germany. Managed by Klaus Weidemann, a German national. Caspian Logistik served as a logistics and freight forwarding facilitator for the oilfield equipment shipments described in Section III.D above. Ridgeline's investigation identified documentation suggesting that Caspian Logistik coordinated directly with Volkhov-affiliated entities regarding the delivery of equipment to end users in the Russian Federation.
IV. Summary of Internal Investigation and Cooperation with DOJ
Dunmore's internal investigation was initiated promptly upon the identification of potential sanctions exposure and has been comprehensive in scope. The key milestones and parameters of the investigation are as follows:
Identification of Potential Exposure. Upon the April 6, 2022 addition of Volkhov Industrial Group JSC to the SDN List under Executive Order 14024, Dunmore's then-Chief Compliance Officer, Gerald Fisk, conducted a routine OFAC screening refresh on April 11, 2022, utilizing Dunmore's sanctions screening software. This refresh identified potential historical exposure through Petronova Trading FZE based on an association between Sergei Volkov (Petronova's managing director) and Volkhov Industrial Group. Mr. Fisk immediately notified General Counsel Marcus Wellbourne of the potential exposure on the same day, April 11, 2022.
Retention of Outside Counsel. On April 14, 2022, Dunmore retained Calderwood & Harkness LLP to conduct an independent internal investigation into the potential sanctions violations and to advise Dunmore regarding its obligations under applicable law, including with respect to voluntary self-disclosure to OFAC and cooperation with the DOJ.
DOJ Grand Jury Subpoena. On April 19, 2022, the DOJ National Security Division, Counterintelligence and Export Control Section, issued grand jury subpoena GJ No. 22-418, directed to Dunmore Energy Holdings Ltd., through the U.S. District Court for the District of Columbia, Grand Jury 22-2. The subpoena required the production of documents relating to, among other things, DTI's trading relationships with Petronova Trading FZE and Zenith Petroleum DMCC, as well as oilfield equipment shipments through Caspian Logistik GmbH.
Scope of Document Collection and Review. Calderwood & Harkness, in coordination with Nexagen Analytics Inc. ("Nexagen"), a litigation technology and e-discovery services provider based in New York, New York (Project No. NX-DEH-2204), undertook a comprehensive document collection and review effort spanning six jurisdictions: the Cayman Islands, the United Arab Emirates, the United States, Germany, Nigeria, and the United Kingdom. A total of 2,347,812 documents were collected from custodial and non-custodial sources, including email, instant messaging platforms, shared network drives, cloud-based storage systems, and physical files. Following de-duplication, filtering, and technology-assisted review, 438,916 documents were deemed responsive to the matters under investigation. Of this total, 12,847 documents were withheld on the basis of attorney-client privilege and/or work product protection; privilege logs were prepared and submitted to the DOJ in accordance with the applicable grand jury procedures.
Witness Interviews. Calderwood & Harkness conducted interviews of forty-seven (47) current and former employees of Dunmore and its subsidiaries, conducted across three rounds of interviews between May 2022 and March 2023. The first round consisted of twenty-two (22) interviews conducted between May and August 2022, focusing on DTI's trading operations, counterparty onboarding procedures, and compliance functions. The second round consisted of fifteen (15) interviews conducted between September and December 2022, focusing on the specific transactions at issue and the roles of key individuals, including Derek Hargrave, Natasha Sorokin, and Gerald Fisk. The third round consisted of ten (10) supplemental interviews conducted between January and March 2023, addressing outstanding factual questions and topics identified during the forensic accounting analysis.
Forensic Accounting Analysis. Calderwood & Harkness retained Ridgeline Advisory Group LLC on May 2, 2022, under Engagement No. RAG-2022-0319, to conduct a comprehensive forensic accounting analysis of the financial transactions associated with DTI's dealings with Petronova Trading FZE, Zenith Petroleum DMCC, and related entities. The forensic investigation was led by Dr. Margaret Liu, CPA, CFE. Ridgeline's analysis encompassed bank records, wire transfer documentation, trade confirmations, vessel tracking data, bills of lading, corporate registry filings, and beneficial ownership records across multiple jurisdictions. Ridgeline's final forensic report was delivered to Calderwood & Harkness on April 1, 2023, and the key findings are incorporated in the enclosed VSD narrative and summarized in Appendix B.
Document Productions to DOJ. Dunmore, through Calderwood & Harkness, has made two substantial document productions to the DOJ in response to grand jury subpoena GJ No. 22-418:
• First Production (November 1, 2022): 287,412 documents, Bates-stamped DEH-DOJ-000001 through DEH-DOJ-287412.
• Second Production (January 30, 2023): 151,504 documents, Bates-stamped DEH-DOJ-287413 through DEH-DOJ-438916.
Internal Investigation Report to DOJ. On May 15, 2023, Calderwood & Harkness submitted a comprehensive internal investigation report to the DOJ, totaling 176 pages, which sets forth the factual findings, legal analysis, and conclusions of the internal investigation. This report forms the basis for the enclosed VSD narrative submitted to OFAC.
Proffers to DOJ. Calderwood & Harkness conducted an initial proffer session with Assistant United States Attorney ("AUSA") Meredith Calloway of the DOJ National Security Division on July 15, 2022, at which Calderwood & Harkness provided an initial overview of the facts and circumstances identified through the early stages of the investigation. A supplemental proffer was conducted on November 20, 2022, at which Calderwood & Harkness provided updated findings from the ongoing investigation, including preliminary forensic accounting results.
Dunmore has cooperated fully and voluntarily with the DOJ throughout the course of this inquiry, including by producing documents beyond the scope of the grand jury subpoena where relevant, facilitating the availability of current employees for interviews, and providing timely and candid communications regarding the progress and findings of the internal investigation.
V. Personnel Actions Taken
Dunmore has taken prompt and decisive personnel actions with respect to the individuals most closely associated with the apparent violations described in this VSD:
1. Natasha Sorokin (then-Senior Trader, DTI). Ms. Sorokin was placed on administrative leave on May 16, 2022, immediately upon the identification of evidence indicating her direct involvement in the transactions at issue. Ms. Sorokin was formally separated from Dunmore effective September 15, 2022. Ms. Sorokin is represented by Philip Keane of Wexford Keane LLP, Washington, D.C.
2. Derek Hargrave (then-President, DTI). Mr. Hargrave was placed on administrative leave on July 1, 2022, following the conclusion of the first round of witness interviews and the identification of evidence indicating that Mr. Hargrave supervised and approved the transactions at issue. Mr. Hargrave was formally separated from Dunmore effective October 1, 2022. Mr. Hargrave is represented by James Overstreet of Overstreet & McClain PLLC, Dallas, Texas.
3. Gerald Fisk (former Chief Compliance Officer, DEH). Mr. Fisk departed Dunmore on June 10, 2022. Although Mr. Fisk was the individual who first identified the potential exposure on April 11, 2022, the internal investigation identified concerns regarding the adequacy of the compliance screening procedures in place during Mr. Fisk's tenure as CCO. Mr. Fisk is represented by Catherine Blackthorn of Blackthorn & Associates LLP, Houston, Texas.
4. Priya Nayar (new Chief Compliance Officer, DEH). Ms. Nayar was appointed as Dunmore's Chief Compliance Officer effective August 1, 2022, replacing Mr. Fisk. Ms. Nayar is a seasoned compliance professional with extensive experience in sanctions and export control compliance, and she reports directly to General Counsel Marcus Wellbourne with a dotted-line reporting relationship to the Audit and Compliance Committee of the Board of Directors.
VI. Remediation Measures Undertaken and Planned
Dunmore has undertaken, and continues to undertake, significant remediation measures to address the compliance deficiencies identified through the internal investigation and to strengthen its sanctions and export controls compliance program going forward.
On December 15, 2022, Calderwood & Harkness retained Pemberton Investors Solutions LLC ("Marlowe Asset Management"), a compliance consulting firm based in Washington, D.C., to design and implement a comprehensive Enhanced Sanctions & Export Controls Compliance Program for Dunmore and its subsidiaries. The engagement is led by Dr. Anton Bremer, a former senior OFAC official and recognized expert in sanctions compliance program design. Marlowe Asset Management's remediation report, which will set forth the recommended program architecture, policies, procedures, and implementation timeline, is expected to be completed on or before September 15, 2023. As of the date of this letter, Marlowe Asset Management's engagement is actively underway.
The remediation measures undertaken to date, and those planned for implementation upon completion of Marlowe Asset Management's recommendations, include the following:
• Enhanced OFAC Screening Protocols. Dunmore has implemented enhanced sanctions screening protocols, including more frequent screening refreshes (daily rather than weekly), and the adoption of a risk-based approach to counterparty screening that incorporates fuzzy matching algorithms and multi-jurisdictional watchlist checks.
• Automated Sanctions Screening Integrated into Trade Execution Systems. Dunmore is in the process of integrating automated, real-time sanctions screening directly into DTI's trade execution and booking systems, such that no trade can be confirmed or settled without clearance through the automated screening module.
• Enhanced Counterparty Due Diligence Procedures. Dunmore has revised its counterparty onboarding and ongoing due diligence procedures to include, among other things, enhanced beneficial ownership verification, adverse media screening, and periodic re-verification of counterparty information at intervals no greater than twelve months.
• Export Control Classification Review Processes. Dunmore is implementing formalized export control classification review processes for all goods and technology transacted or shipped by DTI and other Dunmore subsidiaries, to ensure that items subject to EAR controls are properly classified and that appropriate licenses or license exceptions are obtained prior to export.
• Escalation Mechanisms. Dunmore has established formalized escalation mechanisms requiring that any potential sanctions or export control compliance issue identified by front-line personnel be immediately escalated to the Chief Compliance Officer and, as appropriate, to the General Counsel and outside counsel.
• Comprehensive Employee Training Program. Dunmore is developing and implementing a comprehensive sanctions and export controls compliance training program for all relevant personnel, including mandatory annual training for all DTI trading desk personnel, annual certification requirements, and tailored training modules for senior management and compliance staff.
The Dunmore Board of Directors is expected to formally adopt the Enhanced Sanctions & Export Controls Compliance Program upon completion of Marlowe Asset Management's remediation design work and finalization of the recommended policies and procedures. Dunmore is committed to providing OFAC with supplemental information regarding the progress and outcomes of its remediation efforts as they continue.
VII. Voluntary Disgorgement
Dunmore recognizes the seriousness of the apparent violations described in this VSD and is prepared to make a voluntary disgorgement payment to the U.S. Department of the Treasury representing the estimated net profits derived from the nine tainted crude oil swap transactions identified in Section III.B above.
The estimated disgorgement amount has been calculated as follows:
• Aggregate notional value of the 9 tainted transactions: approximately $156.3 million.
• Estimated net margin on the tainted transactions: approximately 5.6%, based on Ridgeline Advisory Group's forensic analysis of DTI's historical trading margins on comparable crude oil swap transactions.
• Estimated net profit: approximately $8,752,800 (rounded to approximately $8.75 million).
Dunmore intends to coordinate the timing and mechanism of the disgorgement payment with both the DOJ and OFAC, in order to ensure that any payments made are appropriately credited across the relevant enforcement proceedings. As of the date of this letter, Dunmore is expressing its intent to make such a payment and will work with OFAC and the DOJ to finalize the payment arrangements.
VIII. Mitigating Factors
Dunmore respectfully submits that the following mitigating factors, as set forth in OFAC's Economic Sanctions Enforcement Guidelines (31 C.F.R. Part 501, Appendix A), are applicable to this voluntary self-disclosure and should be considered by OFAC in determining the appropriate enforcement response:
1. Voluntary Self-Disclosure. Dunmore is making this disclosure to OFAC voluntarily, prior to any OFAC inquiry, investigation, or enforcement action directed at Dunmore or any of its subsidiaries. Under OFAC's Enforcement Guidelines, a voluntary self-disclosure is a significant mitigating factor that may result in a reduction of up to fifty percent (50%) of the applicable base penalty amount for non-egregious cases.
2. Full Cooperation. Dunmore has cooperated fully and voluntarily with the DOJ throughout the course of the government's inquiry and is committed to providing the same level of cooperation to OFAC. Dunmore has produced extensive documentation, made current and former employees available for interviews, and provided timely and transparent communications regarding the findings of the internal investigation.
3. Comprehensive Remediation. Dunmore has taken swift and decisive remediation measures, including the separation of the individuals primarily responsible for the apparent violations, the appointment of a new Chief Compliance Officer, and the engagement of a leading compliance consulting firm to design and implement an enhanced compliance program. These remediation efforts demonstrate Dunmore's genuine commitment to preventing the recurrence of similar violations.
4. Conduct Not Directed by Senior Management at the Parent Level. The evidence gathered through the internal investigation indicates that the conduct giving rise to the apparent violations was primarily attributable to individuals operating at the DTI trading desk level — specifically, Derek Hargrave (then-President of DTI) and Natasha Sorokin (then-Senior Trader at DTI). There is no evidence that senior management at the Dunmore parent level directed, authorized, or had knowledge of the sanctionable aspects of the transactions at issue.
5. No Prior OFAC Enforcement History. Neither Dunmore nor any of its subsidiaries has been the subject of any prior OFAC enforcement action, civil penalty, finding of violation, cautionary letter, or other adverse enforcement determination. Dunmore has no history of sanctions violations.
Dunmore respectfully requests that OFAC give appropriate weight to these mitigating factors in its evaluation of this matter, consistent with the framework set forth in the Enforcement Guidelines.
IX. Enclosed Materials
The following materials are enclosed with this letter and are being submitted to OFAC as part of this voluntary self-disclosure:
1. Voluntary Self-Disclosure Narrative. Comprehensive filing document setting forth the factual background, detailed transaction analysis, legal analysis, and conclusions of Dunmore's internal investigation, as prepared by Conrad Reeves, Senior Counsel, Export Controls & Sanctions, and Jasmine Thornton, Lead Associate, Calderwood & Harkness LLP.
2. Appendix A: Transaction Summary Schedule — All 14 Crude Oil Swap Transactions (June 2020 – February 2022). This schedule summarizes all fourteen crude oil swap transactions with an aggregate notional value of $218.7 million, and identifies the nine transactions ($156.3 million in aggregate notional value) determined to involve Volkhov-controlled entities.
3. Appendix B: Summary of Ridgeline Advisory Group Forensic Findings. This appendix presents the key findings of Ridgeline Advisory Group's forensic accounting analysis, including payment flow analysis documenting $34.2 million in payments across 127 transactions routed through intermediary accounts at Crescent Commercial Bank PJSC (Dubai, UAE).
4. Appendix C: Beneficial Ownership Analysis — Petronova Trading FZE and 50% Rule Assessment. This appendix sets forth Calderwood & Harkness's analysis of the beneficial ownership structure of Petronova Trading FZE and the application of OFAC's 50 Percent Rule to the determination that Petronova is owned or controlled by Volkhov Industrial Group JSC.
5. Appendix D: Oilfield Equipment Export Shipment Summary. This appendix summarizes the oilfield equipment shipments valued at approximately $12.4 million facilitated by DTI through Caspian Logistik GmbH, including ECCN classifications (2B350 and 2B999), shipment dates, consignees, and end-user information.
6. Appendix E: Organizational Chart — Dunmore Energy Holdings Ltd. and Relevant Subsidiaries. This appendix provides a graphical organizational chart depicting the corporate structure of Dunmore Energy Holdings Ltd. and its relevant subsidiaries, including DTI.
7. Appendix F: Timeline of Key Events. This appendix provides a chronological timeline of the key events relevant to this voluntary self-disclosure, including the dates of the transactions at issue, the identification of potential exposure, the retention of counsel, the DOJ subpoena, and the milestones of the internal investigation.
X. Coordination with DOJ
Dunmore wishes to confirm that the DOJ attorneys assigned to this matter are aware of, and have been informed regarding, the filing of this voluntary self-disclosure with OFAC. Specifically, AUSA Meredith Calloway, together with Trial Attorneys Samuel Kovacs and Diana Pressman of the DOJ National Security Division, Counterintelligence and Export Control Section, have been notified that Dunmore is submitting this VSD to OFAC concurrently with the ongoing DOJ inquiry.
As noted in Section IV above, Calderwood & Harkness submitted its comprehensive internal investigation report, totaling 176 pages, to the DOJ on May 15, 2023. That report addresses the same underlying facts and transactions that are the subject of this voluntary self-disclosure.
Dunmore hereby consents to coordination and information sharing between OFAC and the DOJ with respect to this matter, to the extent permissible under applicable law and regulations. Dunmore recognizes that interagency coordination is appropriate in cases involving potential violations of both OFAC-administered sanctions programs and other federal laws, and Dunmore waives no rights or privileges by consenting to such coordination.
XI. Point of Contact and Request for Acknowledgment
The primary point of contact for OFAC regarding this voluntary self-disclosure and all related matters is:
Victoria Chambers Partner, White Collar & Investigations Calderwood & Harkness LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Telephone: (202) 448-7215
Email: vchambers@calderwoodharkness.com
Additional contacts authorized to communicate with OFAC on behalf of Dunmore regarding this matter include:
Conrad Reeves Senior Counsel, Export Controls & Sanctions Calderwood & Harkness LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Telephone: (202) 448-7238
Email: creeves@calderwoodharkness.com
Jasmine Thornton Lead Associate Calderwood & Harkness LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Telephone: (202) 448-7244
Email: jthornton@calderwoodharkness.com
We respectfully request that OFAC provide written acknowledgment of its receipt of this voluntary self-disclosure at its earliest convenience, and that such acknowledgment be directed to Victoria Chambers at the address, telephone number, or email address set forth above.
Dunmore and Calderwood & Harkness are available to provide any additional information, documentation, or clarification that OFAC may require in connection with its review of this voluntary self-disclosure. We are prepared to meet with OFAC staff at OFAC's convenience to discuss the contents of this filing and to answer any questions that may arise. Dunmore will continue to provide supplemental information to OFAC as the investigation and remediation efforts described herein progress.
Closing
Dunmore Energy Holdings Ltd. wishes to express its unequivocal commitment to full compliance with all OFAC-administered sanctions programs going forward. Dunmore takes its obligations under U.S. sanctions laws with the utmost seriousness and has invested, and will continue to invest, substantial resources to ensure that its operations, and those of its subsidiaries worldwide, are conducted in accordance with all applicable legal requirements.
We thank the Office of Foreign Assets Control for its consideration of this voluntary self-disclosure and look forward to working cooperatively with OFAC throughout the review process.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Victoria Chambers Partner, White Collar & Investigations Calderwood & Harkness LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Telephone: (202) 448-7215
Email: vchambers@calderwoodharkness.com
cc: (via email)
Marcus Wellbourne, Esq., General Counsel, Dunmore Energy Holdings Ltd. Priya Nayar, Chief Compliance Officer, Dunmore Energy Holdings Ltd. Howard Quinn, Billing Partner, Calderwood & Harkness LLP Conrad Reeves, Senior Counsel, Calderwood & Harkness LLP Jasmine Thornton, Lead Associate, Calderwood & Harkness LLP
Enclosures:
1. Voluntary Self-Disclosure Narrative
2. Appendix A: Transaction Summary Schedule — All 14 Crude Oil Swap Transactions (June 2020 – February 2022)
3. Appendix B: Summary of Ridgeline Advisory Group Forensic Findings
4. Appendix C: Beneficial Ownership Analysis — Petronova Trading FZE and 50% Rule Assessment
5. Appendix D: Oilfield Equipment Export Shipment Summary
6. Appendix E: Organizational Chart — Dunmore Energy Holdings Ltd. and Relevant Subsidiaries
7. Appendix F: Timeline of Key Events

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT VOLUNTARY SELF-DISCLOSURE

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