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

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PRIVILEGED & CONFIDENTIAL

CALDERWOOD & HARKNESS LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006

Telephone: (202) 555-7100 Facsimile: (202) 555-7101 www.calderwoodharkness.com

Conrad Reeves Senior Counsel, Export Controls & Sanctions Direct Dial: (202) 555-7148

Email: creeves@calderwoodharkness.com

Facsimile: (202) 555-7152

August 30, 2023

Via OFAC Electronic Filing System and FedEx

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

Attention: Erin Matsuda, Compliance Analyst

Re: Dunmore Energy Holdings Ltd. — Supplemental Information Responsive to OFAC Requests; OFAC Voluntary Self-Disclosure Filed June 1, 2023

Matter Reference: Calderwood & Harkness Matter No. 1016-00009

Client: Dunmore Energy Holdings Ltd. (Cayman Islands, Company Registration No. MC-334821)

Dear Ms. Matsuda:

I. Introduction & Purpose

Calderwood & Harkness LLP represents Dunmore Energy Holdings Ltd. ("Dunmore" or "DEH"), an exempted company incorporated with limited liability under the laws of the Cayman Islands (Company Registration No. MC-334821), with its operational headquarters located at 1200 McKinney Street, Suite 3400, Houston, Texas 77010. We write on Dunmore's behalf to provide supplemental information responsive to specific requests from the Office of Foreign Assets Control ("OFAC"), Compliance & Enforcement Division, in connection with OFAC's review of the voluntary self-disclosure ("VSD") filed on June 1, 2023.

As OFAC is aware, the June 1, 2023 VSD disclosed apparent violations of sanctions programs administered by OFAC, specifically Executive Order 14024 of April 15, 2021 ("Blocking Property with Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation"), Directive 2 under Executive Order 13662 of March 20, 2014 (imposing sectoral sanctions on certain entities in the energy sector of the Russian Federation), and the regulations codified at 31 C.F.R. Part 589 (the Ukraine-/Russia-Related Sanctions Regulations). The VSD provided a comprehensive initial accounting of the apparent violations and the results of Dunmore's internal investigation conducted in cooperation with independent forensic advisors.

This supplemental letter responds to the specific requests for additional information conveyed by Compliance Analyst Erin Matsuda via email dated July 18, 2023, and a follow-up telephone call with the undersigned on August 7, 2023. During the August 7 call, Ms. Matsuda identified several areas where OFAC required additional documentary support and clarification. This letter addresses each of those areas in the order in which they were raised by Ms. Matsuda.

Dunmore wishes to reaffirm its continuing commitment to full, transparent, and timely cooperation with OFAC throughout the review process. Dunmore recognizes the seriousness of the apparent violations disclosed in the VSD and has taken, and continues to take, substantial steps to remediate the compliance deficiencies that enabled the conduct at issue, as described in greater detail in Section 6 of this letter.

We also note for the record that Dunmore is the subject of a parallel inquiry by the U.S. Department of Justice ("DOJ"), National Security Division, arising from the same underlying facts. In connection with that inquiry, the U.S. District Court for the District of Columbia issued a grand jury subpoena, GJ No. 22-418, dated April 19, 2022, directed to Dunmore. Dunmore has been cooperating fully with the DOJ and has produced substantial documentary evidence and made certain current and former personnel available for interviews. Where relevant, this letter cross-references document productions made in connection with the DOJ inquiry to avoid duplicative submissions and to ensure consistency across both proceedings.

II. Section 1: Supplemental Transaction Details — Crude Oil Swap Transactions

A. Overview of All 14 Crude Oil Swap Transactions

As disclosed in the June 1, 2023 VSD, between June 2020 and February 2022, Dunmore Trading International Ltd. ("DTI"), a wholly owned trading subsidiary of Dunmore organized and operating under a Dubai International Financial Centre ("DIFC") License (License No. CL-4827), executed fourteen (14) crude oil swap transactions with an aggregate notional value of approximately $218.7 million. DTI's principal office is located at Level 14, Gate Building 3, Dubai International Financial Centre, P.O. Box 506774, Dubai, United Arab Emirates.

The fourteen transactions were executed with two counterparties:

1. Petronova Trading FZE ("Petronova"), a free zone establishment registered in the Jebel Ali Free Zone ("JAFZA"), Dubai, United Arab Emirates. Petronova's registered address is Office 1407, Al Shafar Tower, Dubai Internet City, Dubai, UAE. Its Managing Director and sole registered shareholder is Sergei Volkov, a Russian national who is a resident of the United Arab Emirates.

2. Zenith Petroleum DMCC ("Zenith Petroleum"), a company registered with the Dubai Multi Commodities Centre ("DMCC") in Dubai, United Arab Emirates. Zenith Petroleum's registered address is Unit 2201, Jumeirah Bay Tower X2, Cluster X, Jumeirah Lakes Towers, Dubai, UAE. Its Managing Director is Farhan Qureshi, a Pakistani national who is a resident of the United Arab Emirates.

The fourteen crude oil swap transactions were executed across both counterparties and involved various grades of crude oil, including ESPO blend, Urals blend, and Dubai (Fateh) benchmark crude, with settlement in U.S. dollars. Payment was effected principally through wire transfers denominated in U.S. dollars, routed through banking institutions in the United Arab Emirates, as described in greater detail in Section 4 of this letter.

B. Identification of the 9 Tainted Transactions

Pursuant to the forensic analysis conducted by Ridgeline Advisory Group LLC ("Ridgeline"), an independent forensic accounting and investigative advisory firm engaged by Calderwood & Harkness on Dunmore's behalf (Engagement No. RAG-2022-0319; Engagement Lead: Dr. Margaret Liu, CPA, CFE), it has been determined that 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 ("Volkhov" or "VIG"), a Russian industrial conglomerate organized as a joint stock company under the laws of the Russian Federation, with its headquarters at 12 Kutuzovsky Prospekt, Moscow 121248, Russia. Volkhov's Chairman is Arkady Volkhov.

Volkhov was designated under OFAC Directive 2 issued pursuant to Executive Order 13662 (imposing sectoral sanctions on entities operating in the energy sector of the Russian Federation) on November 15, 2019. Subsequently, on April 6, 2022, Volkhov was added to OFAC's Specially Designated Nationals and blocked Persons List ("SDN List") pursuant to Executive Order 14024. As of the date of the tainted transactions (June 2020 through February 2022), Volkhov was subject to the prohibitions and restrictions imposed by E.O. 13662 and Directive 2, and certain of the later transactions may also implicate the prohibitions of E.O. 14024 to the extent they involved dealings with Volkhov after its SDN designation.

In response to Ms. Matsuda's July 18, 2023 request, the following table provides a summary of each of the nine (9) tainted transactions, including the information fields specifically identified by Ms. Matsuda:

The aggregate notional value of the nine tainted transactions totals approximately $156,300,000. A detailed transaction-level schedule, including complete supporting documentation references and Bates-stamped document citations, is provided in the enclosed Exhibit A.

The remaining five (5) of the fourteen (14) transactions, with an aggregate notional value of approximately $62.4 million ($218.7 million less $156.3 million), did not present a confirmed nexus to Volkhov Industrial Group or any other sanctioned entity. Nonetheless, these five transactions were included in the June 1, 2023 VSD out of an abundance of caution, given that they involved the same counterparties (Petronova and Zenith Petroleum) and were executed during the same period. Ridgeline's forensic analysis did not identify evidence linking these five transactions to sanctioned persons or entities, but Dunmore acknowledges that the counterparty risk profile associated with Petronova and Zenith Petroleum warranted their inclusion in the disclosure.

C. Zenith Petroleum DMCC — Specific Transaction Details

Ms. Matsuda specifically requested additional detail regarding the two crude oil swap transactions executed with Zenith Petroleum DMCC (Transaction Nos. 7 and 9 in the table above). We provide the following responsive information.

Zenith Petroleum DMCC Registration Details. Zenith Petroleum DMCC was incorporated as a DMCC company in Dubai, UAE, on March 14, 2018 (DMCC Registration No. DMCC-73491). Its registered address is Unit 2201, Jumeirah Bay Tower X2, Cluster X, Jumeirah Lakes Towers, Dubai, UAE. Its Managing Director is Farhan Qureshi, a Pakistani national (Pakistani passport number AK-3872140, issued February 22, 2019; UAE resident visa number 201/2018/4785213). Mr. Qureshi holds a 100% equity interest in Zenith Petroleum DMCC according to the DMCC shareholder registry obtained during the investigation. Zenith Petroleum's trade license authorizes it to engage in the trading of petroleum products, petrochemicals, and related commodities.

KYC Documentation. During the internal investigation, DTI's compliance files were reviewed, and the KYC documentation on file for Zenith Petroleum was found to be materially incomplete. At the time of onboarding in July 2020, DTI obtained a copy of Zenith Petroleum's DMCC trade license, a certificate of incorporation, and a copy of Mr. Qureshi's passport. No independent beneficial ownership verification was conducted. No screening of Mr. Qureshi or Zenith Petroleum against the OFAC SDN List, Consolidated Screening List, or other relevant restricted party lists was documented in the compliance file. This represented a significant deficiency in DTI's counterparty due diligence procedures, as described further in Section 6 below. Copies of the KYC materials obtained during the investigation are enclosed as Exhibit C.

Transaction No. 7 (October 15, 2021 — $28.75 million). This transaction involved a crude oil swap in which DTI agreed to deliver 500,000 barrels of Dubai (Fateh) benchmark crude oil to Zenith Petroleum. The pricing mechanism was based on the Platts Dubai (Fateh) benchmark, with a differential of minus $0.35 per barrel, settled against the monthly average of the Platts Dubai assessment for October 2021. Delivery was made on a CIF basis to Fujairah, UAE, with the vessel MV Gulf Horizon (IMO 9602817) serving as the delivery vessel. Ridgeline's investigation determined that the crude oil delivered pursuant to this swap was ultimately re-exported to a VIG refinery subsidiary located in Tuapse, Krasnodar Krai, Russia. This determination was based on (a) shipping records obtained from the Fujairah Oil Industry Zone, (b) bill of lading documents showing the MV Gulf Horizon's onward voyage from Fujairah to Tuapse, and (c) email correspondence recovered from Natasha Sorokin's DTI email account in which Farhan Qureshi confirmed to Sorokin that the cargo was "destined for the Tuapse refinery per SV's instructions" — a reference understood to mean Sergei Volkov's instructions. This email, dated October 9, 2021, was produced to the DOJ under Bates number DEH-DOJ-0042817.

Transaction No. 9 (February 3, 2022 — $15.75 million). This transaction involved a crude oil swap in which DTI agreed to deliver 300,000 barrels of ESPO blend crude oil to Zenith Petroleum. The pricing mechanism was based on the Platts ESPO Blend Dubai Delivered benchmark, with a differential of minus $0.20 per barrel, settled against the February 2022 monthly average. Delivery was made on a FOB basis at Kozmino Port, Russia, with the vessel MV Sakhalin Trader (IMO 9618432) loading at that terminal. Ridgeline's investigation determined that the end-user certification provided by Zenith Petroleum for this transaction was falsified. The certification identified the end user as "Transcontinental Energy Trading FZCO," a purported JAFZA-registered entity. Upon investigation, Ridgeline was unable to locate any JAFZA registration for an entity by that name. Port loading records obtained from commercial databases indicated that the crude oil loaded aboard the MV Sakhalin Trader was consigned to a VIG-controlled storage facility at Nakhodka, Primorsky Krai, Russia. Payment for this transaction was routed through a series of intermediary accounts at Crescent Commercial Bank PJSC before reaching an account held in the name of a VIG subsidiary, as described in Section 4 below.

III. Section 2: Petronova Trading FZE — Beneficial Ownership Details

Ms. Matsuda's July 18, 2023 email specifically requested additional beneficial ownership information regarding Petronova Trading FZE. The following information is provided in response.

Corporate Structure and Ownership. Petronova Trading FZE was established as a free zone establishment under the Jebel Ali Free Zone Authority ("JAFZA") on June 7, 2017 (JAFZA Registration No. JAFZA-FZE-18273). Its registered address is Office 1407, Al Shafar Tower, Dubai Internet City, Dubai, UAE. Sergei Volkov is identified in the JAFZA corporate registry as both the Managing Director and the sole registered shareholder of Petronova, holding a 100% equity interest. A copy of the relevant JAFZA corporate registry extract, obtained on March 14, 2023, is enclosed as part of Exhibit B.

Analysis Under the OFAC 50 Percent Rule. Under OFAC's 50 Percent Rule, as articulated in Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property Are blocked (August 13, 2014), an entity is considered to be "owned" by a blocked person if that blocked person owns, directly or indirectly, a 50 percent or greater interest in the entity. Although Sergei Volkov was not himself designated on the SDN List during the relevant period, Dunmore's investigation has produced substantial evidence indicating that Volkov acted as an agent, designee, or nominee of Volkhov Industrial Group JSC and/or its Chairman, Arkady Volkhov. Accordingly, to the extent Petronova is deemed to be owned or controlled by Volkhov or Arkady Volkhov through Sergei Volkov's role as a front or nominee, Petronova would itself be a blocked entity whose property and interests in property are blocked under E.O. 13662, Directive 2, and subsequently under E.O. 14024.

Documentary Evidence Linking Petronova to Volkhov. The following categories of evidence support the conclusion that Petronova was controlled by, and operated for the benefit of, Volkhov Industrial Group:

(a) Email Correspondence Between Natasha Sorokin and Sergei Volkov. Ridgeline's review of approximately 14,500 emails recovered from Natasha Sorokin's DTI email account identified 237 emails exchanged between Sorokin and Volkov between March 2020 and March 2022. Of these, 43 emails contain explicit references to "Volkhov," "VIG," "AV" (understood to refer to Arkady Volkhov), or "the Group." In multiple emails, Volkov directs Sorokin to structure transactions "per AV's requirements" or confirms that cargo is "for VIG account." For example, in an email dated May 10, 2021 (Bates No. DEH-DOJ-0038416), Volkov writes to Sorokin: "Natasha, the Urals cargo must be priced at the agreed differential. AV has confirmed the volume. Please proceed on our usual terms." This and similar communications strongly suggest that Volkov was not acting independently but rather as an agent or nominee of Arkady Volkhov and VIG.

(b) Corporate Registry Documents from JAFZA. The JAFZA corporate registry documents for Petronova Trading FZE identify Volkov as the sole shareholder and Managing Director. However, supplemental due diligence conducted by Ridgeline, including a review of Petronova's bank account opening documentation at Crescent Commercial Bank PJSC, revealed that the "source of funds" declaration submitted by Petronova to Crescent Bank identified "VIG Energy Trading Division" as the principal source of Petronova's trading capital. This declaration, dated July 2019, was signed by Sergei Volkov in his capacity as Managing Director of Petronova. A copy of the relevant bank documentation is included in Exhibit B.

(c) Payment Flow Analysis. As detailed more fully in Section 4 of this letter, Ridgeline's forensic analysis of payment flows through Crescent Commercial Bank PJSC revealed a pattern in which funds received by Petronova from DTI were, within one to five business days, transferred onward to accounts held in the names of VIG subsidiaries, including VIG Energy Trading AG (Zug, Switzerland), VIG Logistics LLC (Dubai, UAE), and Volkhov Neftegaz OOO (Moscow, Russia). The rapidity and regularity of these onward transfers are consistent with a pass-through or conduit arrangement in which Petronova served as an intermediary to facilitate payments to, or for the benefit of, Volkhov-controlled entities.

Natasha Sorokin — Personal Counsel. We note for the record that Natasha Sorokin, the former Senior Trader at DTI who served as the primary point of contact with Sergei Volkov and who executed the crude oil swap transactions at issue, was placed on administrative leave on May 16, 2022 and separated from Dunmore on September 15, 2022. Ms. Sorokin is a Russian-American dual national. She has retained personal counsel: Philip Keane of Wexford Keane LLP, 2000 K Street NW, Suite 650, Washington, DC 20006, telephone (202) 555-8340. Any direct communications with Ms. Sorokin should be directed through Mr. Keane.

Complete beneficial ownership documentation, an organizational chart, and related materials for Petronova Trading FZE are enclosed as Exhibit B.

IV. Section 3: Oilfield Equipment Export Details — Caspian Logistik GmbH

Ms. Matsuda's August 7, 2023 telephone request included a specific inquiry regarding the oilfield equipment exports facilitated by DTI through Caspian Logistik GmbH. The following information is provided in response.

Overview of Oilfield Equipment Exports. Between August 2020 and January 2022, DTI facilitated the export of oilfield drilling equipment and components with an aggregate value of approximately $12.4 million. These exports were made to purported end users outside Russia via Caspian Logistik GmbH ("Caspian Logistik"), a Gesellschaft mit beschränkter Haftung (limited liability company) organized under the laws of the Federal Republic of Germany, with its registered address at Mönckebergstraße 22, 20095 Hamburg, Germany (Commercial Register: Amtsgericht Hamburg, HRB 154782). Caspian Logistik's Managing Director is Klaus Weidemann, a German national.

Export Classification and Regulatory Framework. The oilfield equipment and components exported through Caspian Logistik were classified under the Export Administration Regulations ("EAR") administered by the Bureau of Industry and Security ("BIS") of the U.S. Department of Commerce. The items were classified under the following Export Control Classification Numbers ("ECCNs"):

• ECCN 2B350: Chemical manufacturing equipment and components, including certain drilling-related chemical processing equipment used in downhole applications.

• ECCN 2B999: Items subject to the EAR not elsewhere specified on the Commerce Control List ("CCL"), including certain oilfield components and subassemblies used in directional drilling systems.

Dunmore understands that the export of these items to Russia or for end use in Russia was subject to the prohibitions and license requirements set forth in EAR § 746.5 (Russia/Belarus sanctions), as well as the OFAC prohibitions applicable to dealings with Volkhov-controlled entities under E.O. 13662, Directive 2.

End-User Certifications. For each shipment facilitated through Caspian Logistik, DTI obtained end-user certifications from Caspian Logistik identifying non-Russian end users, typically entities in Kazakhstan, Turkey, or the United Arab Emirates. However, Ridgeline's investigation, which included a review of shipping documentation, freight forwarding records, and communication between DTI's logistics team and Caspian Logistik, determined that at least seven (7) of the eleven (11) shipments involved end-user certifications that were likely false. The investigation identified substantial evidence that the actual end users for these shipments were Volkhov-controlled entities in Russia, including Volkhov Neftegaz OOO (the upstream exploration and production subsidiary of VIG, headquartered in Tyumen, Russia) and Volkhov Drilling Services OOO (a VIG subsidiary based in Noyabrsk, Yamalo-Nenets Autonomous Okrug, Russia).

The evidence supporting this conclusion includes: (a) freight forwarding records showing that equipment shipped to Caspian Logistik's Hamburg warehouse was subsequently re-exported to Russia via rail through Poland and Belarus; (b) customs declaration documents obtained from commercial trade databases indicating Russian importers affiliated with VIG; and (c) email communications between Yves Leclerc (Director of Logistics & Shipping, DTI) and Klaus Weidemann in which Weidemann confirms that "final delivery is as previously agreed" — language that, in context, is understood to refer to delivery to VIG-affiliated entities in Russia.

Tangential Involvement of Dunmore Renewables GmbH. In connection with one transaction involving Caspian Logistik (Shipment No. 8 in the table below), Dunmore's investigation identified tangential involvement by Dunmore Renewables GmbH, a separate Dunmore subsidiary organized under the laws of the Federal Republic of Germany, with its registered address at Überseeallee 12, 20457 Hamburg, Germany (Commercial Register: Amtsgericht Hamburg, HRB 162317). Dunmore Renewables' Managing Director is Tobias Engel, a German national. The involvement consisted of the use of Dunmore Renewables' freight forwarding account with Vireo Services Inc. for the shipment of certain components, apparently at the direction of Yves Leclerc, who sought to avoid using DTI's own logistics accounts for this particular shipment. Dunmore's investigation has not identified evidence that Tobias Engel or other Dunmore Renewables personnel were aware of the ultimate Russian end use. This matter is the subject of continuing investigation by Dunmore and Ridgeline.

Shipment Schedule. The following table summarizes the eleven (11) oilfield equipment shipments facilitated through Caspian Logistik:

The aggregate value of the eleven shipments is approximately $12,400,000. As noted above, Ridgeline has determined that at least seven of these shipments (Shipment Nos. 1 through 7) involved falsified end-user certifications and actual delivery to Volkhov-controlled entities. The remaining four shipments (Nos. 8 through 11) are the subject of continuing investigation; the declared end users have not yet been confirmed or confirmed.

A complete shipment schedule with supporting documentation, including copies of end-user certificates, ECCN classification worksheets, and freight forwarding records, is enclosed as Exhibit D.

V. Section 4: Payment Structuring Through Crescent Commercial Bank PJSC

Ms. Matsuda's July 18, 2023 email and August 7, 2023 telephone call both requested additional detail regarding the payment flows associated with the transactions at issue. The following information is provided in response.

Overview of Payment Flows. Ridgeline Advisory Group's forensic accounting analysis identified approximately $34.2 million in payments routed through a series of intermediary accounts at Crescent Commercial Bank PJSC ("Crescent Bank"), a commercial bank headquartered in the Dubai International Financial Centre, Dubai, UAE (Head Office: Al Maktoum Tower, DIFC, P.O. Box 335102, Dubai, UAE). The relevant relationship manager at Crescent Bank for DTI's accounts was Khalid Mansour.

The $34.2 million in identified payments comprised 127 individual wire transfer transactions executed between March 2020 and March 2022. These wire transfers were associated with the crude oil swap transactions and, to a lesser extent, the oilfield equipment export transactions described in this letter.

Layering Structure. Ridgeline's analysis revealed a systematic layering structure designed to obscure the ultimate beneficial ownership of the recipients of the funds. The general pattern was as follows:

(a) DTI initiated wire transfers from its operating account at Crescent Bank (Account No. ending in -7842) to accounts held by Petronova Trading FZE (Account No. ending in -3156) and/or Zenith Petroleum DMCC (Account No. ending in -9214), also maintained at Crescent Bank.

(b) Within one to five business days of receipt, Petronova and/or Zenith Petroleum transferred substantially all of the received funds onward to a series of intermediary accounts, including accounts held in the names of the following entities:

(i) VIG Energy Trading AG, an entity organized under the laws of Switzerland (Canton of Zug), which maintained accounts at Crescent Bank and at a correspondent banking institution in Glenrock Assurance, Switzerland;

(ii) VIG Logistics LLC, a Dubai-registered entity maintaining accounts at Crescent Bank;

(iii) A series of accounts at Eurokommerts Bank PJSC (Moscow, Russia) held in the names of VIG subsidiaries, including Volkhov Neftegaz OOO and Volkhov Nefteprodukt OOO.

(c) In several instances, the onward transfers were structured so that a single inbound payment from DTI was split into multiple smaller outbound transfers to different VIG-related accounts, further complicating the tracing of funds. In other instances, funds were commingled with payments from other, unrelated sources before being transferred onward, adding an additional layer of obfuscation.

Representative Wire Transfer Records. At Ms. Matsuda's request, we provide a representative sample of wire transfer records in Exhibit E. This exhibit includes Bates-stamped copies of wire transfer confirmations, SWIFT messages, and Ridgeline's analytical worksheets for a subset of the 127 transactions. Where the documents overlap with productions previously made to the DOJ in connection with grand jury subpoena GJ No. 22-418, we have cross-referenced the relevant DOJ Bates numbers for OFAC's convenience. The full wire-level detail for all 127 transactions was included in the comprehensive forensic accounting report delivered by Ridgeline to Calderwood & Harkness on April 1, 2023 (the "Ridgeline Report"), a copy of which was provided to OFAC as an attachment to the June 1, 2023 VSD. Exhibit E supplements the Ridgeline Report with additional records obtained since that date.

Key DTI Personnel Involved in Payment Approvals. Ridgeline's investigation identified the following DTI personnel as having direct involvement in the approval and execution of the payment transactions:

(a) Derek Hargrave, former President of DTI, who held signatory authority over DTI's accounts at Crescent Bank and approved the counterparty relationships with both Petronova and Zenith Petroleum. Mr. Hargrave authorized individual wire transfers in excess of $5 million and approved the counterparty credit limits that enabled the swap transactions. Mr. Hargrave was placed on administrative leave on July 1, 2022 and was separated from Dunmore on October 1, 2022. He has retained personal counsel: James Overstreet of Overstreet & McClain PLLC, 2200 Ross Avenue, Suite 3600, Dallas, TX 75201, telephone (214) 555-6200. Any direct communications with Mr. Hargrave should be directed through Mr. Overstreet.

(b) Rajesh Malhotra, Controller of DTI, who processed wire transfer instructions, maintained payment records, and had secondary signatory authority over DTI's Crescent Bank accounts for transactions under $5 million. Mr. Malhotra remains employed by DTI and has been cooperating with the internal investigation.

VI. Section 5: Key Personnel Involved in the Transactions

In response to Ms. Matsuda's request for a comprehensive identification of the individuals responsible for, or materially involved in, the transactions at issue, Dunmore provides the following summary. A key personnel chart depicting each individual's role, organizational position, and involvement in the relevant transactions is enclosed as Exhibit F.

1. Derek Hargrave — Former President, DTI. Mr. Hargrave served as President of Dunmore Trading International Ltd. from 2017 through 2022, during which time he supervised the trading desk and was responsible for the overall management and strategic direction of DTI's commodity trading operations. Mr. Hargrave approved the establishment of counterparty relationships with both Petronova Trading FZE and Zenith Petroleum DMCC, authorized the credit limits for each counterparty, and had direct signatory authority over DTI's bank accounts. Mr. Hargrave was placed on administrative leave on July 1, 2022 and was formally separated from Dunmore on October 1, 2022. His personal counsel is James Overstreet, Overstreet & McClain PLLC, Dallas, Texas, as noted above.

2. Natasha Sorokin — Former Senior Trader, DTI. Ms. Sorokin served as Senior Trader on DTI's crude oil trading desk from 2019 through 2022. She is a Russian-American dual national. Ms. Sorokin was the primary point of contact with Sergei Volkov (Petronova's Managing Director) and was responsible for the day-to-day execution of the crude oil swap transactions at issue. Her email account contained the communications described in Section 2 above, which evidence the connection between the transactions and Volkhov Industrial Group. Ms. Sorokin was placed on administrative leave on May 16, 2022 and separated from Dunmore on September 15, 2022. Her personal counsel is Philip Keane, Wexford Keane LLP, Washington, D.C., as noted above.

3. Gerald Fisk — Former Chief Compliance Officer, DEH. Mr. Fisk served as Chief Compliance Officer of Dunmore Energy Holdings Ltd. from 2016 through June 2022, based in the Houston, Texas headquarters. Mr. Fisk was responsible for the design, implementation, and oversight of Dunmore's sanctions and export controls compliance program, including OFAC screening procedures, counterparty due diligence protocols, and compliance training for trading desk personnel. Dunmore's investigation determined that Mr. Fisk failed to implement adequate OFAC screening and escalation protocols, failed to ensure that DTI's counterparty onboarding procedures included robust beneficial ownership verification, and failed to escalate red flags identified by junior compliance staff concerning the Petronova and Zenith Petroleum relationships. Mr. Fisk departed Dunmore on June 10, 2022. He has retained personal counsel: Catherine Blackthorn of Blackthorn & Associates LLP, 700 Louisiana Street, Suite 4300, Houston, TX 77002, telephone (713) 555-4890. Any direct communications with Mr. Fisk should be directed through Ms. Blackthorn.

4. Omar Al-Rashidi — Head of Middle East Operations, DTI. Mr. Al-Rashidi serves as Head of Middle East Operations for DTI, based in the Dubai office. Mr. Al-Rashidi had operational oversight of DTI's regional trading activities and relationships with UAE-based counterparties. Mr. Al-Rashidi is a cooperating witness in the internal investigation and has provided detailed information to Ridgeline and Calderwood & Harkness regarding trading desk operations, the establishment and maintenance of the Petronova and Zenith Petroleum relationships, and the role of Derek Hargrave and Natasha Sorokin in the relevant transactions. Mr. Al-Rashidi remains employed by DTI.

5. Yves Leclerc — Director of Logistics & Shipping, DTI. Mr. Leclerc, a French national, serves as Director of Logistics & Shipping for DTI, responsible for coordinating vessel charters, freight forwarding, and physical delivery of commodity cargoes. Mr. Leclerc facilitated the shipping arrangements for the oilfield equipment exports conducted through Caspian Logistik GmbH, including the arrangement of freight forwarding services and the coordination of delivery schedules with Klaus Weidemann. The investigation has identified communications between Mr. Leclerc and Mr. Weidemann that are relevant to the oilfield equipment exports described in Section 3 above. Mr. Leclerc remains employed by DTI and has been cooperating with the internal investigation, although his personal counsel has been engaged in connection with the DOJ inquiry.

VII. Section 6: Compliance Remediation Update

Dunmore wishes to update OFAC on the compliance remediation steps taken since the filing of the June 1, 2023 VSD, and the steps that are in progress. Dunmore views comprehensive remediation as a critical component of its response to the apparent violations and its commitment to building a robust, best-in-class sanctions and export controls compliance program.

Appointment of New Chief Compliance Officer. On August 1, 2022, Dunmore appointed Priya Nayar as Chief Compliance Officer, replacing Gerald Fisk. Ms. Nayar is a former senior compliance officer at a major international energy company and has extensive experience in OFAC sanctions compliance, export controls, and anti-money laundering programs. Ms. Nayar reports directly to the Board of Directors of Dunmore Energy Holdings Ltd. and has been provided with a budget and resources commensurate with the scope of the remediation effort.

Engagement of Pemberton Investors Solutions LLC. On December 15, 2022, Dunmore retained Pemberton Investors Solutions LLC ("Marlowe Asset Management"), an independent compliance consulting firm with offices at 1300 I Street NW, Suite 700, Washington, DC 20005, to design and implement an enhanced sanctions and export controls compliance program for the Dunmore group of companies. The engagement is being led by Dr. Anton Bremer, Marlowe Asset Management's Managing Director and a former Deputy Director of OFAC's Office of Compliance and Enforcement. Marlowe Asset Management's comprehensive remediation report, which will include detailed findings, recommendations, and an implementation roadmap, is expected to be delivered by September 15, 2023.

Remediation Measures Already Implemented. In advance of the completion of Marlowe Asset Management's comprehensive report, Dunmore has already implemented the following remediation measures:

(a) Enhanced OFAC Screening Protocols. DTI and all Dunmore subsidiaries now employ automated, real-time screening of all counterparties, beneficial owners, vessel names, vessel IMO numbers, and transaction parties against the OFAC SDN List, Consolidated Screening List, EU Consolidated List, UN Sanctions List, and other relevant restricted party databases. Screening is conducted using Glenrock Solutions, with supplemental checks through Korvelian Kestrel Software and Bureau van Dijk (Orbis) for beneficial ownership verification.

(b) Counterparty Due Diligence Procedures. Dunmore has adopted enhanced counterparty onboarding and periodic review procedures that require independent verification of beneficial ownership to the ultimate natural person level, collection and verification of corporate registry documents, adverse media screening, and a risk-based tiering system for counterparty relationships. Counterparties rated as high-risk or operating in jurisdictions identified as elevated sanctions risk require enhanced due diligence and approval by the Chief Compliance Officer before onboarding or renewal.

(c) Employee Training. Dunmore has conducted mandatory sanctions and export controls compliance training for all employees across the organization, with specialized advanced training for trading desk personnel, logistics staff, finance and treasury teams, and senior management. Training was conducted by Pemberton Investors Solutions in the first and second quarters of 2023 and will be repeated on an annual basis.

(d) Escalation Mechanisms. Dunmore has implemented a formal compliance escalation protocol that requires all potential sanctions red flags — including screening hits, suspicious counterparty behavior, unusual payment routing, and end-user certification anomalies — to be escalated immediately to the Chief Compliance Officer and, where warranted, to outside counsel for evaluation.

(e) Compliance Technology Infrastructure. Dunmore has invested in upgraded compliance technology, including implementation of an integrated trade compliance management system (provided by Fenmore Solutions) that integrates with DTI's trade and logistics platforms to provide automated, pre-transaction screening and real-time monitoring of shipments and payment flows.

Board-Level Adoption. The Board of Directors of Dunmore Energy Holdings Ltd. is expected to formally adopt the Enhanced Sanctions & Export Controls Compliance Program in fall 2023, following the delivery of Marlowe Asset Management's comprehensive remediation report.

Dunmore continues to cooperate fully with both OFAC and the DOJ National Security Division and is committed to ensuring that the remediation measures are fully implemented and sustained.

VIII. Section 7: Voluntary Disgorgement

Dunmore is in the process of calculating and preparing a voluntary disgorgement payment representing the estimated net profits derived from the nine (9) tainted crude oil swap transactions identified in this letter and in the June 1, 2023 VSD.

The calculation methodology is as follows:

• Aggregate notional value of tainted transactions: $156,300,000

• Estimated net margin: 5.6% (determined by Ridgeline Advisory Group based on an analysis of DTI's historical trading margins for comparable crude oil swap transactions, after deducting direct transaction costs, freight and insurance, financing costs, and allocated overhead)

• Estimated net profits: $156,300,000 × 5.6% = approximately $8,752,800 (rounded to approximately $8.75 million)

Dunmore anticipates making the voluntary disgorgement payment to the U.S. Treasury on or before November 30, 2023. The precise amount may be adjusted based on the finalization of Ridgeline's net margin analysis, and Dunmore will promptly notify OFAC of any material adjustment.

Dunmore respectfully submits that this voluntary disgorgement, taken together with its voluntary self-disclosure, full and continuing cooperation with OFAC and the DOJ, and the comprehensive compliance remediation described in Section 6 above, constitutes significant mitigating factors under OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. Part 501, Appendix A. Dunmore notes in particular that the Enforcement Guidelines identify voluntary self-disclosure, cooperation with OFAC, remedial response, and disgorgement of ill-gotten gains as among the most significant mitigating factors in OFAC's determination of the appropriate enforcement response. Dunmore respectfully requests that OFAC give full weight to these mitigating factors in its evaluation of this matter.

IX. Section 8: Enclosed Supplemental Documents

The following exhibits are enclosed with this letter, as referenced herein:

Exhibit A: Detailed transaction-level schedule of all fourteen (14) crude oil swap transactions, with the nine (9) tainted transactions highlighted, including counterparty identification, transaction date, notional value, commodity description, payment details, vessel/delivery references, and Volkhov connection indicators.

Exhibit B: Petronova Trading FZE — corporate registry documents from the Jebel Ali Free Zone Authority, beneficial ownership analysis (including bank account opening documentation referencing VIG), and organizational chart depicting the relationship between Petronova, Sergei Volkov, Arkady Volkhov, and Volkhov Industrial Group JSC.

Exhibit C: Zenith Petroleum DMCC — DMCC corporate registry documents, KYC materials (trade license, certificate of incorporation, passport copy for Farhan Qureshi), and related counterparty onboarding documentation obtained from DTI's compliance files.

Exhibit D: Caspian Logistik GmbH — shipment schedule for the eleven (11) oilfield equipment export transactions, end-user certificates (including those identified as potentially falsified), ECCN classification worksheets, and supporting freight forwarding and shipping documentation.

Exhibit E: Representative sample of wire transfer records from Crescent Commercial Bank PJSC (127 transactions totaling approximately $34.2 million), including SWIFT messages, wire transfer confirmations, and Ridgeline Advisory Group's layering analysis worksheets, with cross-references to DOJ Bates-numbered productions where applicable.

Exhibit F: Key personnel chart identifying the roles, organizational positions, dates of employment, and involvement in the relevant transactions of Derek Hargrave, Natasha Sorokin, Gerald Fisk, Omar Al-Rashidi, Yves Leclerc, and Rajesh Malhotra.

X. Reservation of Rights and Continuing Cooperation

Dunmore Energy Holdings Ltd. expressly reserves all rights and defenses available to it under applicable law, regulation, and executive order, including but not limited to any defenses based on the scope of the relevant sanctions authorities, the application of the 50 Percent Rule, the availability of general or specific licenses, and the adequacy of the evidentiary basis for any enforcement determination. Nothing in this letter, the June 1, 2023 VSD, or any prior or subsequent communication with OFAC shall be deemed an admission of liability or a waiver of any right or defense, except as specifically stated herein.

Notwithstanding the foregoing reservation, Dunmore reiterates its unwavering commitment to full and timely cooperation with OFAC in connection with its review of the VSD and the apparent violations disclosed therein. Dunmore stands ready to provide any additional information, documentation, or access to personnel that OFAC may reasonably require.

Dunmore notes that, in connection with its cooperation with OFAC and the DOJ, it has made a selective waiver of certain attorney-client privilege and attorney work product protections with respect to specific categories of documents and communications. This selective waiver has been made pursuant to a protocol agreed upon by counsel, and it is expressly limited to disclosures to OFAC and the DOJ. Dunmore does not waive, and expressly reserves, all privilege protections as to third parties, including but not limited to private litigants, regulatory authorities in other jurisdictions, and any other persons or entities.

Dunmore further notes its continuing cooperation with the DOJ National Security Division in connection with grand jury subpoena GJ No. 22-418, issued by the U.S. District Court for the District of Columbia on April 19, 2022. Dunmore has endeavored to coordinate its disclosures to OFAC and the DOJ to the greatest extent practicable in order to ensure consistency and to facilitate the efficient resolution of both proceedings.

XI. Confidentiality

Dunmore respectfully requests that OFAC treat the supplemental information contained in this letter and the enclosed Exhibits A through F as confidential business information, to the fullest extent permitted by law, including under the Trade Secrets Act, 18 U.S.C. § 1905, the Freedom of Information Act, 5 U.S.C. § 552 (particularly Exemptions 4 and 7), and any other applicable legal protections. The enclosed materials contain proprietary commercial and financial information, trade-sensitive data, and details of internal corporate investigations that, if disclosed publicly, could cause substantial competitive harm to Dunmore and its affiliates.

In addition, certain of the enclosed materials include attorney-client privileged communications and attorney work product that have been disclosed to OFAC pursuant to the limited, selective waiver protocol described in Section 10 above. Dunmore requests that OFAC maintain the confidentiality of these materials and not disclose them to third parties without prior consultation with undersigned counsel.

XII. Closing

We trust that the foregoing supplemental information is responsive to Ms. Matsuda's requests. Dunmore remains committed to cooperating fully with OFAC and to providing any additional information or clarification that may be needed as OFAC's review of this matter continues.

Should you wish to discuss any aspect of this submission, I am available at your convenience and can be reached at my direct dial number, (202) 555-7148, or by email at creeves@calderwoodharkness.com. In addition, Victoria Chambers, the Responsible Partner on this matter, is available for any matters requiring partner-level attention. Ms. Chambers can be reached at (202) 555-7110 or vchambers@calderwoodharkness.com at Calderwood & Harkness's Washington, D.C. office.

We appreciate OFAC's attention to this matter and look forward to continuing to work with you toward a resolution.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Conrad Reeves Senior Counsel, Export Controls & Sanctions 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Telephone: (202) 555-7148

Email: creeves@calderwoodharkness.com

cc:

Victoria Chambers, Partner, Calderwood & Harkness LLP Marcus Wellbourne, General Counsel, Dunmore Energy Holdings Ltd. Priya Nayar, Chief Compliance Officer, Dunmore Energy Holdings Ltd.

Enclosures:

Exhibit A — Detailed Transaction-Level Schedule (14 Crude Oil Swap Transactions) Exhibit B — Petronova Trading FZE: Corporate Registry, Beneficial Ownership Analysis & Organizational Chart Exhibit C — Zenith Petroleum DMCC: Corporate Registry & KYC Materials Exhibit D — Caspian Logistik GmbH: Shipment Schedule, End-User Certificates & ECCN Classifications Exhibit E — Representative Wire Transfer Records, Crescent Commercial Bank PJSC (127 Transactions / $34.2M) Exhibit F — Key Personnel Chart (Hargrave, Sorokin, Fisk, Al-Rashidi, Leclerc, Malhotra)

No.	Transaction Date	Counterparty	Commodity Description	Notional Value (USD)	Payment Method / Bank	Vessel / Delivery Reference	Identified Volkhov Connection
1	June 12, 2020	Petronova Trading FZE	ESPO Blend, 100,000 bbl	$4,250,000	Wire transfer / Crescent Commercial Bank PJSC	MV Caspian Pioneer (IMO 9453217)	Crude sourced from VIG-controlled terminal at Kozmino Port; bill of lading references VIG subsidiary
2	September 3, 2020	Petronova Trading FZE	Urals Blend, 250,000 bbl	$10,875,000	Wire transfer / Crescent Commercial Bank PJSC	MV Orion Star (IMO 9512340)	Shipping documents identify VIG Shipping LLC as charterer
3	November 19, 2020	Petronova Trading FZE	Urals Blend, 500,000 bbl	$22,150,000	Wire transfer / Crescent Commercial Bank PJSC	MV Arktika Voyager (IMO 9487612)	Funds traced to VIG-controlled account at Eurokommerts Bank (Moscow)
4	February 8, 2021	Petronova Trading FZE	ESPO Blend, 350,000 bbl	$16,975,000	Wire transfer / Crescent Commercial Bank PJSC	MV Caspian Pioneer (IMO 9453217)	VIG subsidiary identified as origin shipper in port loading records
5	May 14, 2021	Petronova Trading FZE	Urals Blend, 400,000 bbl	$21,600,000	Wire transfer / Crescent Commercial Bank PJSC	MV Baltic Express (IMO 9534891)	Email correspondence between Sorokin and Volkov references "AV" and "the Group"
6	August 27, 2021	Petronova Trading FZE	ESPO Blend, 300,000 bbl	$17,400,000	Wire transfer / Crescent Commercial Bank PJSC	MV Eastern Meridian (IMO 9561023)	VIG entity identified on certificate of origin; payment to VIG-linked account
7	October 15, 2021	Zenith Petroleum DMCC	Dubai (Fateh) Blend, 500,000 bbl	$28,750,000	Wire transfer / Crescent Commercial Bank PJSC	MV Gulf Horizon (IMO 9602817)	Swap structured to deliver crude to VIG refinery subsidiary; Qureshi acted on Volkov's instructions per email evidence
8	December 22, 2021	Petronova Trading FZE	Urals Blend, 350,000 bbl	$18,550,000	Wire transfer / Crescent Commercial Bank PJSC	MV Arktika Voyager (IMO 9487612)	VIG Shipping LLC identified as charterer; funds traced through layered accounts to VIG
9	February 3, 2022	Zenith Petroleum DMCC	ESPO Blend, 300,000 bbl	$15,750,000	Wire transfer / Crescent Commercial Bank PJSC	MV Sakhalin Trader (IMO 9618432)	End-user documentation falsified; actual destination was VIG-controlled storage facility at Nakhodka
Shipment No.	Date	Equipment Description	ECCN	Value (USD)	Declared End User	Suspected Actual End User
1	Aug. 14, 2020	Directional drilling mud motors (qty. 4)	2B999	$780,000	KazDrill Services LLP (Almaty, Kazakhstan)	Volkhov Neftegaz OOO (Tyumen, Russia)
2	Oct. 2, 2020	Downhole chemical injection sub-assemblies	2B350	$425,000	Antalya Petrol A.Ş. (Istanbul, Turkey)	Volkhov Drilling Services OOO (Noyabrsk, Russia)
3	Dec. 18, 2020	MWD/LWD tool assemblies (qty. 6)	2B999	$1,650,000	KazDrill Services LLP (Almaty, Kazakhstan)	Volkhov Neftegaz OOO (Tyumen, Russia)
4	Feb. 26, 2021	Drill bit assemblies, PDC type (qty. 20)	2B999	$920,000	Gulf Technical Services FZE (Sharjah, UAE)	Volkhov Drilling Services OOO (Noyabrsk, Russia)
5	May 7, 2021	Downhole pressure/temperature gauges (qty. 50)	2B999	$1,375,000	Antalya Petrol A.Ş. (Istanbul, Turkey)	Volkhov Neftegaz OOO (Tyumen, Russia)
6	Jul. 16, 2021	Chemical processing skid units (qty. 2)	2B350	$2,100,000	KazDrill Services LLP (Almaty, Kazakhstan)	Volkhov Neftegaz OOO (Tyumen, Russia)
7	Sep. 24, 2021	Rotary steerable system components	2B999	$1,450,000	Gulf Technical Services FZE (Sharjah, UAE)	Volkhov Drilling Services OOO (Noyabrsk, Russia)
8	Nov. 5, 2021	Wellhead control panels (qty. 8)	2B999	$890,000	Antalya Petrol A.Ş. (Istanbul, Turkey)	Unknown (under investigation)
9	Nov. 30, 2021	Casing running tools and accessories	2B999	$765,000	KazDrill Services LLP (Almaty, Kazakhstan)	Unknown (under investigation)
10	Jan. 6, 2022	Downhole chemical injection manifolds	2B350	$1,180,000	Gulf Technical Services FZE (Sharjah, UAE)	Unknown (under investigation)
11	Jan. 27, 2022	Directional drilling mud motors (qty. 3); drill collars	2B999	$865,000	KazDrill Services LLP (Almaty, Kazakhstan)	Unknown (under investigation)

PRIVILEGED & CONFIDENTIAL
CALDERWOOD & HARKNESS LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006
Telephone: (202) 555-7100 Facsimile: (202) 555-7101 www.calderwoodharkness.com
Conrad Reeves Senior Counsel, Export Controls & Sanctions Direct Dial: (202) 555-7148
Email: creeves@calderwoodharkness.com
Facsimile: (202) 555-7152
August 30, 2023
Via OFAC Electronic Filing System and FedEx
Office of Foreign Assets Control Compliance & Enforcement Division U.S. Department of the Treasury 1500 Pennsylvania Avenue NW Washington, D.C. 20220
Attention: Erin Matsuda, Compliance Analyst
Re: Dunmore Energy Holdings Ltd. — Supplemental Information Responsive to OFAC Requests; OFAC Voluntary Self-Disclosure Filed June 1, 2023
Matter Reference: Calderwood & Harkness Matter No. 1016-00009
Client: Dunmore Energy Holdings Ltd. (Cayman Islands, Company Registration No. MC-334821)
Dear Ms. Matsuda:
I. Introduction & Purpose
Calderwood & Harkness LLP represents Dunmore Energy Holdings Ltd. ("Dunmore" or "DEH"), an exempted company incorporated with limited liability under the laws of the Cayman Islands (Company Registration No. MC-334821), with its operational headquarters located at 1200 McKinney Street, Suite 3400, Houston, Texas 77010. We write on Dunmore's behalf to provide supplemental information responsive to specific requests from the Office of Foreign Assets Control ("OFAC"), Compliance & Enforcement Division, in connection with OFAC's review of the voluntary self-disclosure ("VSD") filed on June 1, 2023.
As OFAC is aware, the June 1, 2023 VSD disclosed apparent violations of sanctions programs administered by OFAC, specifically Executive Order 14024 of April 15, 2021 ("Blocking Property with Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation"), Directive 2 under Executive Order 13662 of March 20, 2014 (imposing sectoral sanctions on certain entities in the energy sector of the Russian Federation), and the regulations codified at 31 C.F.R. Part 589 (the Ukraine-/Russia-Related Sanctions Regulations). The VSD provided a comprehensive initial accounting of the apparent violations and the results of Dunmore's internal investigation conducted in cooperation with independent forensic advisors.
This supplemental letter responds to the specific requests for additional information conveyed by Compliance Analyst Erin Matsuda via email dated July 18, 2023, and a follow-up telephone call with the undersigned on August 7, 2023. During the August 7 call, Ms. Matsuda identified several areas where OFAC required additional documentary support and clarification. This letter addresses each of those areas in the order in which they were raised by Ms. Matsuda.
Dunmore wishes to reaffirm its continuing commitment to full, transparent, and timely cooperation with OFAC throughout the review process. Dunmore recognizes the seriousness of the apparent violations disclosed in the VSD and has taken, and continues to take, substantial steps to remediate the compliance deficiencies that enabled the conduct at issue, as described in greater detail in Section 6 of this letter.
We also note for the record that Dunmore is the subject of a parallel inquiry by the U.S. Department of Justice ("DOJ"), National Security Division, arising from the same underlying facts. In connection with that inquiry, the U.S. District Court for the District of Columbia issued a grand jury subpoena, GJ No. 22-418, dated April 19, 2022, directed to Dunmore. Dunmore has been cooperating fully with the DOJ and has produced substantial documentary evidence and made certain current and former personnel available for interviews. Where relevant, this letter cross-references document productions made in connection with the DOJ inquiry to avoid duplicative submissions and to ensure consistency across both proceedings.
II. Section 1: Supplemental Transaction Details — Crude Oil Swap Transactions
A. Overview of All 14 Crude Oil Swap Transactions
As disclosed in the June 1, 2023 VSD, between June 2020 and February 2022, Dunmore Trading International Ltd. ("DTI"), a wholly owned trading subsidiary of Dunmore organized and operating under a Dubai International Financial Centre ("DIFC") License (License No. CL-4827), executed fourteen (14) crude oil swap transactions with an aggregate notional value of approximately $218.7 million. DTI's principal office is located at Level 14, Gate Building 3, Dubai International Financial Centre, P.O. Box 506774, Dubai, United Arab Emirates.
The fourteen transactions were executed with two counterparties:
1. Petronova Trading FZE ("Petronova"), a free zone establishment registered in the Jebel Ali Free Zone ("JAFZA"), Dubai, United Arab Emirates. Petronova's registered address is Office 1407, Al Shafar Tower, Dubai Internet City, Dubai, UAE. Its Managing Director and sole registered shareholder is Sergei Volkov, a Russian national who is a resident of the United Arab Emirates.
2. Zenith Petroleum DMCC ("Zenith Petroleum"), a company registered with the Dubai Multi Commodities Centre ("DMCC") in Dubai, United Arab Emirates. Zenith Petroleum's registered address is Unit 2201, Jumeirah Bay Tower X2, Cluster X, Jumeirah Lakes Towers, Dubai, UAE. Its Managing Director is Farhan Qureshi, a Pakistani national who is a resident of the United Arab Emirates.
The fourteen crude oil swap transactions were executed across both counterparties and involved various grades of crude oil, including ESPO blend, Urals blend, and Dubai (Fateh) benchmark crude, with settlement in U.S. dollars. Payment was effected principally through wire transfers denominated in U.S. dollars, routed through banking institutions in the United Arab Emirates, as described in greater detail in Section 4 of this letter.
B. Identification of the 9 Tainted Transactions
Pursuant to the forensic analysis conducted by Ridgeline Advisory Group LLC ("Ridgeline"), an independent forensic accounting and investigative advisory firm engaged by Calderwood & Harkness on Dunmore's behalf (Engagement No. RAG-2022-0319; Engagement Lead: Dr. Margaret Liu, CPA, CFE), it has been determined that 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 ("Volkhov" or "VIG"), a Russian industrial conglomerate organized as a joint stock company under the laws of the Russian Federation, with its headquarters at 12 Kutuzovsky Prospekt, Moscow 121248, Russia. Volkhov's Chairman is Arkady Volkhov.
Volkhov was designated under OFAC Directive 2 issued pursuant to Executive Order 13662 (imposing sectoral sanctions on entities operating in the energy sector of the Russian Federation) on November 15, 2019. Subsequently, on April 6, 2022, Volkhov was added to OFAC's Specially Designated Nationals and blocked Persons List ("SDN List") pursuant to Executive Order 14024. As of the date of the tainted transactions (June 2020 through February 2022), Volkhov was subject to the prohibitions and restrictions imposed by E.O. 13662 and Directive 2, and certain of the later transactions may also implicate the prohibitions of E.O. 14024 to the extent they involved dealings with Volkhov after its SDN designation.
In response to Ms. Matsuda's July 18, 2023 request, the following table provides a summary of each of the nine (9) tainted transactions, including the information fields specifically identified by Ms. Matsuda:
The aggregate notional value of the nine tainted transactions totals approximately $156,300,000. A detailed transaction-level schedule, including complete supporting documentation references and Bates-stamped document citations, is provided in the enclosed Exhibit A.
The remaining five (5) of the fourteen (14) transactions, with an aggregate notional value of approximately $62.4 million ($218.7 million less $156.3 million), did not present a confirmed nexus to Volkhov Industrial Group or any other sanctioned entity. Nonetheless, these five transactions were included in the June 1, 2023 VSD out of an abundance of caution, given that they involved the same counterparties (Petronova and Zenith Petroleum) and were executed during the same period. Ridgeline's forensic analysis did not identify evidence linking these five transactions to sanctioned persons or entities, but Dunmore acknowledges that the counterparty risk profile associated with Petronova and Zenith Petroleum warranted their inclusion in the disclosure.
C. Zenith Petroleum DMCC — Specific Transaction Details
Ms. Matsuda specifically requested additional detail regarding the two crude oil swap transactions executed with Zenith Petroleum DMCC (Transaction Nos. 7 and 9 in the table above). We provide the following responsive information.
Zenith Petroleum DMCC Registration Details. Zenith Petroleum DMCC was incorporated as a DMCC company in Dubai, UAE, on March 14, 2018 (DMCC Registration No. DMCC-73491). Its registered address is Unit 2201, Jumeirah Bay Tower X2, Cluster X, Jumeirah Lakes Towers, Dubai, UAE. Its Managing Director is Farhan Qureshi, a Pakistani national (Pakistani passport number AK-3872140, issued February 22, 2019; UAE resident visa number 201/2018/4785213). Mr. Qureshi holds a 100% equity interest in Zenith Petroleum DMCC according to the DMCC shareholder registry obtained during the investigation. Zenith Petroleum's trade license authorizes it to engage in the trading of petroleum products, petrochemicals, and related commodities.
KYC Documentation. During the internal investigation, DTI's compliance files were reviewed, and the KYC documentation on file for Zenith Petroleum was found to be materially incomplete. At the time of onboarding in July 2020, DTI obtained a copy of Zenith Petroleum's DMCC trade license, a certificate of incorporation, and a copy of Mr. Qureshi's passport. No independent beneficial ownership verification was conducted. No screening of Mr. Qureshi or Zenith Petroleum against the OFAC SDN List, Consolidated Screening List, or other relevant restricted party lists was documented in the compliance file. This represented a significant deficiency in DTI's counterparty due diligence procedures, as described further in Section 6 below. Copies of the KYC materials obtained during the investigation are enclosed as Exhibit C.
Transaction No. 7 (October 15, 2021 — $28.75 million). This transaction involved a crude oil swap in which DTI agreed to deliver 500,000 barrels of Dubai (Fateh) benchmark crude oil to Zenith Petroleum. The pricing mechanism was based on the Platts Dubai (Fateh) benchmark, with a differential of minus $0.35 per barrel, settled against the monthly average of the Platts Dubai assessment for October 2021. Delivery was made on a CIF basis to Fujairah, UAE, with the vessel MV Gulf Horizon (IMO 9602817) serving as the delivery vessel. Ridgeline's investigation determined that the crude oil delivered pursuant to this swap was ultimately re-exported to a VIG refinery subsidiary located in Tuapse, Krasnodar Krai, Russia. This determination was based on (a) shipping records obtained from the Fujairah Oil Industry Zone, (b) bill of lading documents showing the MV Gulf Horizon's onward voyage from Fujairah to Tuapse, and (c) email correspondence recovered from Natasha Sorokin's DTI email account in which Farhan Qureshi confirmed to Sorokin that the cargo was "destined for the Tuapse refinery per SV's instructions" — a reference understood to mean Sergei Volkov's instructions. This email, dated October 9, 2021, was produced to the DOJ under Bates number DEH-DOJ-0042817.
Transaction No. 9 (February 3, 2022 — $15.75 million). This transaction involved a crude oil swap in which DTI agreed to deliver 300,000 barrels of ESPO blend crude oil to Zenith Petroleum. The pricing mechanism was based on the Platts ESPO Blend Dubai Delivered benchmark, with a differential of minus $0.20 per barrel, settled against the February 2022 monthly average. Delivery was made on a FOB basis at Kozmino Port, Russia, with the vessel MV Sakhalin Trader (IMO 9618432) loading at that terminal. Ridgeline's investigation determined that the end-user certification provided by Zenith Petroleum for this transaction was falsified. The certification identified the end user as "Transcontinental Energy Trading FZCO," a purported JAFZA-registered entity. Upon investigation, Ridgeline was unable to locate any JAFZA registration for an entity by that name. Port loading records obtained from commercial databases indicated that the crude oil loaded aboard the MV Sakhalin Trader was consigned to a VIG-controlled storage facility at Nakhodka, Primorsky Krai, Russia. Payment for this transaction was routed through a series of intermediary accounts at Crescent Commercial Bank PJSC before reaching an account held in the name of a VIG subsidiary, as described in Section 4 below.
III. Section 2: Petronova Trading FZE — Beneficial Ownership Details
Ms. Matsuda's July 18, 2023 email specifically requested additional beneficial ownership information regarding Petronova Trading FZE. The following information is provided in response.
Corporate Structure and Ownership. Petronova Trading FZE was established as a free zone establishment under the Jebel Ali Free Zone Authority ("JAFZA") on June 7, 2017 (JAFZA Registration No. JAFZA-FZE-18273). Its registered address is Office 1407, Al Shafar Tower, Dubai Internet City, Dubai, UAE. Sergei Volkov is identified in the JAFZA corporate registry as both the Managing Director and the sole registered shareholder of Petronova, holding a 100% equity interest. A copy of the relevant JAFZA corporate registry extract, obtained on March 14, 2023, is enclosed as part of Exhibit B.
Analysis Under the OFAC 50 Percent Rule. Under OFAC's 50 Percent Rule, as articulated in Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property Are blocked (August 13, 2014), an entity is considered to be "owned" by a blocked person if that blocked person owns, directly or indirectly, a 50 percent or greater interest in the entity. Although Sergei Volkov was not himself designated on the SDN List during the relevant period, Dunmore's investigation has produced substantial evidence indicating that Volkov acted as an agent, designee, or nominee of Volkhov Industrial Group JSC and/or its Chairman, Arkady Volkhov. Accordingly, to the extent Petronova is deemed to be owned or controlled by Volkhov or Arkady Volkhov through Sergei Volkov's role as a front or nominee, Petronova would itself be a blocked entity whose property and interests in property are blocked under E.O. 13662, Directive 2, and subsequently under E.O. 14024.
Documentary Evidence Linking Petronova to Volkhov. The following categories of evidence support the conclusion that Petronova was controlled by, and operated for the benefit of, Volkhov Industrial Group:
(a) Email Correspondence Between Natasha Sorokin and Sergei Volkov. Ridgeline's review of approximately 14,500 emails recovered from Natasha Sorokin's DTI email account identified 237 emails exchanged between Sorokin and Volkov between March 2020 and March 2022. Of these, 43 emails contain explicit references to "Volkhov," "VIG," "AV" (understood to refer to Arkady Volkhov), or "the Group." In multiple emails, Volkov directs Sorokin to structure transactions "per AV's requirements" or confirms that cargo is "for VIG account." For example, in an email dated May 10, 2021 (Bates No. DEH-DOJ-0038416), Volkov writes to Sorokin: "Natasha, the Urals cargo must be priced at the agreed differential. AV has confirmed the volume. Please proceed on our usual terms." This and similar communications strongly suggest that Volkov was not acting independently but rather as an agent or nominee of Arkady Volkhov and VIG.
(b) Corporate Registry Documents from JAFZA. The JAFZA corporate registry documents for Petronova Trading FZE identify Volkov as the sole shareholder and Managing Director. However, supplemental due diligence conducted by Ridgeline, including a review of Petronova's bank account opening documentation at Crescent Commercial Bank PJSC, revealed that the "source of funds" declaration submitted by Petronova to Crescent Bank identified "VIG Energy Trading Division" as the principal source of Petronova's trading capital. This declaration, dated July 2019, was signed by Sergei Volkov in his capacity as Managing Director of Petronova. A copy of the relevant bank documentation is included in Exhibit B.
(c) Payment Flow Analysis. As detailed more fully in Section 4 of this letter, Ridgeline's forensic analysis of payment flows through Crescent Commercial Bank PJSC revealed a pattern in which funds received by Petronova from DTI were, within one to five business days, transferred onward to accounts held in the names of VIG subsidiaries, including VIG Energy Trading AG (Zug, Switzerland), VIG Logistics LLC (Dubai, UAE), and Volkhov Neftegaz OOO (Moscow, Russia). The rapidity and regularity of these onward transfers are consistent with a pass-through or conduit arrangement in which Petronova served as an intermediary to facilitate payments to, or for the benefit of, Volkhov-controlled entities.
Natasha Sorokin — Personal Counsel. We note for the record that Natasha Sorokin, the former Senior Trader at DTI who served as the primary point of contact with Sergei Volkov and who executed the crude oil swap transactions at issue, was placed on administrative leave on May 16, 2022 and separated from Dunmore on September 15, 2022. Ms. Sorokin is a Russian-American dual national. She has retained personal counsel: Philip Keane of Wexford Keane LLP, 2000 K Street NW, Suite 650, Washington, DC 20006, telephone (202) 555-8340. Any direct communications with Ms. Sorokin should be directed through Mr. Keane.
Complete beneficial ownership documentation, an organizational chart, and related materials for Petronova Trading FZE are enclosed as Exhibit B.
IV. Section 3: Oilfield Equipment Export Details — Caspian Logistik GmbH
Ms. Matsuda's August 7, 2023 telephone request included a specific inquiry regarding the oilfield equipment exports facilitated by DTI through Caspian Logistik GmbH. The following information is provided in response.
Overview of Oilfield Equipment Exports. Between August 2020 and January 2022, DTI facilitated the export of oilfield drilling equipment and components with an aggregate value of approximately $12.4 million. These exports were made to purported end users outside Russia via Caspian Logistik GmbH ("Caspian Logistik"), a Gesellschaft mit beschränkter Haftung (limited liability company) organized under the laws of the Federal Republic of Germany, with its registered address at Mönckebergstraße 22, 20095 Hamburg, Germany (Commercial Register: Amtsgericht Hamburg, HRB 154782). Caspian Logistik's Managing Director is Klaus Weidemann, a German national.
Export Classification and Regulatory Framework. The oilfield equipment and components exported through Caspian Logistik were classified under the Export Administration Regulations ("EAR") administered by the Bureau of Industry and Security ("BIS") of the U.S. Department of Commerce. The items were classified under the following Export Control Classification Numbers ("ECCNs"):
• ECCN 2B350: Chemical manufacturing equipment and components, including certain drilling-related chemical processing equipment used in downhole applications.
• ECCN 2B999: Items subject to the EAR not elsewhere specified on the Commerce Control List ("CCL"), including certain oilfield components and subassemblies used in directional drilling systems.
Dunmore understands that the export of these items to Russia or for end use in Russia was subject to the prohibitions and license requirements set forth in EAR § 746.5 (Russia/Belarus sanctions), as well as the OFAC prohibitions applicable to dealings with Volkhov-controlled entities under E.O. 13662, Directive 2.
End-User Certifications. For each shipment facilitated through Caspian Logistik, DTI obtained end-user certifications from Caspian Logistik identifying non-Russian end users, typically entities in Kazakhstan, Turkey, or the United Arab Emirates. However, Ridgeline's investigation, which included a review of shipping documentation, freight forwarding records, and communication between DTI's logistics team and Caspian Logistik, determined that at least seven (7) of the eleven (11) shipments involved end-user certifications that were likely false. The investigation identified substantial evidence that the actual end users for these shipments were Volkhov-controlled entities in Russia, including Volkhov Neftegaz OOO (the upstream exploration and production subsidiary of VIG, headquartered in Tyumen, Russia) and Volkhov Drilling Services OOO (a VIG subsidiary based in Noyabrsk, Yamalo-Nenets Autonomous Okrug, Russia).
The evidence supporting this conclusion includes: (a) freight forwarding records showing that equipment shipped to Caspian Logistik's Hamburg warehouse was subsequently re-exported to Russia via rail through Poland and Belarus; (b) customs declaration documents obtained from commercial trade databases indicating Russian importers affiliated with VIG; and (c) email communications between Yves Leclerc (Director of Logistics & Shipping, DTI) and Klaus Weidemann in which Weidemann confirms that "final delivery is as previously agreed" — language that, in context, is understood to refer to delivery to VIG-affiliated entities in Russia.
Tangential Involvement of Dunmore Renewables GmbH. In connection with one transaction involving Caspian Logistik (Shipment No. 8 in the table below), Dunmore's investigation identified tangential involvement by Dunmore Renewables GmbH, a separate Dunmore subsidiary organized under the laws of the Federal Republic of Germany, with its registered address at Überseeallee 12, 20457 Hamburg, Germany (Commercial Register: Amtsgericht Hamburg, HRB 162317). Dunmore Renewables' Managing Director is Tobias Engel, a German national. The involvement consisted of the use of Dunmore Renewables' freight forwarding account with Vireo Services Inc. for the shipment of certain components, apparently at the direction of Yves Leclerc, who sought to avoid using DTI's own logistics accounts for this particular shipment. Dunmore's investigation has not identified evidence that Tobias Engel or other Dunmore Renewables personnel were aware of the ultimate Russian end use. This matter is the subject of continuing investigation by Dunmore and Ridgeline.
Shipment Schedule. The following table summarizes the eleven (11) oilfield equipment shipments facilitated through Caspian Logistik:
The aggregate value of the eleven shipments is approximately $12,400,000. As noted above, Ridgeline has determined that at least seven of these shipments (Shipment Nos. 1 through 7) involved falsified end-user certifications and actual delivery to Volkhov-controlled entities. The remaining four shipments (Nos. 8 through 11) are the subject of continuing investigation; the declared end users have not yet been confirmed or confirmed.
A complete shipment schedule with supporting documentation, including copies of end-user certificates, ECCN classification worksheets, and freight forwarding records, is enclosed as Exhibit D.
V. Section 4: Payment Structuring Through Crescent Commercial Bank PJSC
Ms. Matsuda's July 18, 2023 email and August 7, 2023 telephone call both requested additional detail regarding the payment flows associated with the transactions at issue. The following information is provided in response.
Overview of Payment Flows. Ridgeline Advisory Group's forensic accounting analysis identified approximately $34.2 million in payments routed through a series of intermediary accounts at Crescent Commercial Bank PJSC ("Crescent Bank"), a commercial bank headquartered in the Dubai International Financial Centre, Dubai, UAE (Head Office: Al Maktoum Tower, DIFC, P.O. Box 335102, Dubai, UAE). The relevant relationship manager at Crescent Bank for DTI's accounts was Khalid Mansour.
The $34.2 million in identified payments comprised 127 individual wire transfer transactions executed between March 2020 and March 2022. These wire transfers were associated with the crude oil swap transactions and, to a lesser extent, the oilfield equipment export transactions described in this letter.
Layering Structure. Ridgeline's analysis revealed a systematic layering structure designed to obscure the ultimate beneficial ownership of the recipients of the funds. The general pattern was as follows:
(a) DTI initiated wire transfers from its operating account at Crescent Bank (Account No. ending in -7842) to accounts held by Petronova Trading FZE (Account No. ending in -3156) and/or Zenith Petroleum DMCC (Account No. ending in -9214), also maintained at Crescent Bank.
(b) Within one to five business days of receipt, Petronova and/or Zenith Petroleum transferred substantially all of the received funds onward to a series of intermediary accounts, including accounts held in the names of the following entities:
(i) VIG Energy Trading AG, an entity organized under the laws of Switzerland (Canton of Zug), which maintained accounts at Crescent Bank and at a correspondent banking institution in Glenrock Assurance, Switzerland;
(ii) VIG Logistics LLC, a Dubai-registered entity maintaining accounts at Crescent Bank;
(iii) A series of accounts at Eurokommerts Bank PJSC (Moscow, Russia) held in the names of VIG subsidiaries, including Volkhov Neftegaz OOO and Volkhov Nefteprodukt OOO.
(c) In several instances, the onward transfers were structured so that a single inbound payment from DTI was split into multiple smaller outbound transfers to different VIG-related accounts, further complicating the tracing of funds. In other instances, funds were commingled with payments from other, unrelated sources before being transferred onward, adding an additional layer of obfuscation.
Representative Wire Transfer Records. At Ms. Matsuda's request, we provide a representative sample of wire transfer records in Exhibit E. This exhibit includes Bates-stamped copies of wire transfer confirmations, SWIFT messages, and Ridgeline's analytical worksheets for a subset of the 127 transactions. Where the documents overlap with productions previously made to the DOJ in connection with grand jury subpoena GJ No. 22-418, we have cross-referenced the relevant DOJ Bates numbers for OFAC's convenience. The full wire-level detail for all 127 transactions was included in the comprehensive forensic accounting report delivered by Ridgeline to Calderwood & Harkness on April 1, 2023 (the "Ridgeline Report"), a copy of which was provided to OFAC as an attachment to the June 1, 2023 VSD. Exhibit E supplements the Ridgeline Report with additional records obtained since that date.
Key DTI Personnel Involved in Payment Approvals. Ridgeline's investigation identified the following DTI personnel as having direct involvement in the approval and execution of the payment transactions:
(a) Derek Hargrave, former President of DTI, who held signatory authority over DTI's accounts at Crescent Bank and approved the counterparty relationships with both Petronova and Zenith Petroleum. Mr. Hargrave authorized individual wire transfers in excess of $5 million and approved the counterparty credit limits that enabled the swap transactions. Mr. Hargrave was placed on administrative leave on July 1, 2022 and was separated from Dunmore on October 1, 2022. He has retained personal counsel: James Overstreet of Overstreet & McClain PLLC, 2200 Ross Avenue, Suite 3600, Dallas, TX 75201, telephone (214) 555-6200. Any direct communications with Mr. Hargrave should be directed through Mr. Overstreet.
(b) Rajesh Malhotra, Controller of DTI, who processed wire transfer instructions, maintained payment records, and had secondary signatory authority over DTI's Crescent Bank accounts for transactions under $5 million. Mr. Malhotra remains employed by DTI and has been cooperating with the internal investigation.
VI. Section 5: Key Personnel Involved in the Transactions
In response to Ms. Matsuda's request for a comprehensive identification of the individuals responsible for, or materially involved in, the transactions at issue, Dunmore provides the following summary. A key personnel chart depicting each individual's role, organizational position, and involvement in the relevant transactions is enclosed as Exhibit F.
1. Derek Hargrave — Former President, DTI. Mr. Hargrave served as President of Dunmore Trading International Ltd. from 2017 through 2022, during which time he supervised the trading desk and was responsible for the overall management and strategic direction of DTI's commodity trading operations. Mr. Hargrave approved the establishment of counterparty relationships with both Petronova Trading FZE and Zenith Petroleum DMCC, authorized the credit limits for each counterparty, and had direct signatory authority over DTI's bank accounts. Mr. Hargrave was placed on administrative leave on July 1, 2022 and was formally separated from Dunmore on October 1, 2022. His personal counsel is James Overstreet, Overstreet & McClain PLLC, Dallas, Texas, as noted above.
2. Natasha Sorokin — Former Senior Trader, DTI. Ms. Sorokin served as Senior Trader on DTI's crude oil trading desk from 2019 through 2022. She is a Russian-American dual national. Ms. Sorokin was the primary point of contact with Sergei Volkov (Petronova's Managing Director) and was responsible for the day-to-day execution of the crude oil swap transactions at issue. Her email account contained the communications described in Section 2 above, which evidence the connection between the transactions and Volkhov Industrial Group. Ms. Sorokin was placed on administrative leave on May 16, 2022 and separated from Dunmore on September 15, 2022. Her personal counsel is Philip Keane, Wexford Keane LLP, Washington, D.C., as noted above.
3. Gerald Fisk — Former Chief Compliance Officer, DEH. Mr. Fisk served as Chief Compliance Officer of Dunmore Energy Holdings Ltd. from 2016 through June 2022, based in the Houston, Texas headquarters. Mr. Fisk was responsible for the design, implementation, and oversight of Dunmore's sanctions and export controls compliance program, including OFAC screening procedures, counterparty due diligence protocols, and compliance training for trading desk personnel. Dunmore's investigation determined that Mr. Fisk failed to implement adequate OFAC screening and escalation protocols, failed to ensure that DTI's counterparty onboarding procedures included robust beneficial ownership verification, and failed to escalate red flags identified by junior compliance staff concerning the Petronova and Zenith Petroleum relationships. Mr. Fisk departed Dunmore on June 10, 2022. He has retained personal counsel: Catherine Blackthorn of Blackthorn & Associates LLP, 700 Louisiana Street, Suite 4300, Houston, TX 77002, telephone (713) 555-4890. Any direct communications with Mr. Fisk should be directed through Ms. Blackthorn.
4. Omar Al-Rashidi — Head of Middle East Operations, DTI. Mr. Al-Rashidi serves as Head of Middle East Operations for DTI, based in the Dubai office. Mr. Al-Rashidi had operational oversight of DTI's regional trading activities and relationships with UAE-based counterparties. Mr. Al-Rashidi is a cooperating witness in the internal investigation and has provided detailed information to Ridgeline and Calderwood & Harkness regarding trading desk operations, the establishment and maintenance of the Petronova and Zenith Petroleum relationships, and the role of Derek Hargrave and Natasha Sorokin in the relevant transactions. Mr. Al-Rashidi remains employed by DTI.
5. Yves Leclerc — Director of Logistics & Shipping, DTI. Mr. Leclerc, a French national, serves as Director of Logistics & Shipping for DTI, responsible for coordinating vessel charters, freight forwarding, and physical delivery of commodity cargoes. Mr. Leclerc facilitated the shipping arrangements for the oilfield equipment exports conducted through Caspian Logistik GmbH, including the arrangement of freight forwarding services and the coordination of delivery schedules with Klaus Weidemann. The investigation has identified communications between Mr. Leclerc and Mr. Weidemann that are relevant to the oilfield equipment exports described in Section 3 above. Mr. Leclerc remains employed by DTI and has been cooperating with the internal investigation, although his personal counsel has been engaged in connection with the DOJ inquiry.
VII. Section 6: Compliance Remediation Update
Dunmore wishes to update OFAC on the compliance remediation steps taken since the filing of the June 1, 2023 VSD, and the steps that are in progress. Dunmore views comprehensive remediation as a critical component of its response to the apparent violations and its commitment to building a robust, best-in-class sanctions and export controls compliance program.
Appointment of New Chief Compliance Officer. On August 1, 2022, Dunmore appointed Priya Nayar as Chief Compliance Officer, replacing Gerald Fisk. Ms. Nayar is a former senior compliance officer at a major international energy company and has extensive experience in OFAC sanctions compliance, export controls, and anti-money laundering programs. Ms. Nayar reports directly to the Board of Directors of Dunmore Energy Holdings Ltd. and has been provided with a budget and resources commensurate with the scope of the remediation effort.
Engagement of Pemberton Investors Solutions LLC. On December 15, 2022, Dunmore retained Pemberton Investors Solutions LLC ("Marlowe Asset Management"), an independent compliance consulting firm with offices at 1300 I Street NW, Suite 700, Washington, DC 20005, to design and implement an enhanced sanctions and export controls compliance program for the Dunmore group of companies. The engagement is being led by Dr. Anton Bremer, Marlowe Asset Management's Managing Director and a former Deputy Director of OFAC's Office of Compliance and Enforcement. Marlowe Asset Management's comprehensive remediation report, which will include detailed findings, recommendations, and an implementation roadmap, is expected to be delivered by September 15, 2023.
Remediation Measures Already Implemented. In advance of the completion of Marlowe Asset Management's comprehensive report, Dunmore has already implemented the following remediation measures:
(a) Enhanced OFAC Screening Protocols. DTI and all Dunmore subsidiaries now employ automated, real-time screening of all counterparties, beneficial owners, vessel names, vessel IMO numbers, and transaction parties against the OFAC SDN List, Consolidated Screening List, EU Consolidated List, UN Sanctions List, and other relevant restricted party databases. Screening is conducted using Glenrock Solutions, with supplemental checks through Korvelian Kestrel Software and Bureau van Dijk (Orbis) for beneficial ownership verification.
(b) Counterparty Due Diligence Procedures. Dunmore has adopted enhanced counterparty onboarding and periodic review procedures that require independent verification of beneficial ownership to the ultimate natural person level, collection and verification of corporate registry documents, adverse media screening, and a risk-based tiering system for counterparty relationships. Counterparties rated as high-risk or operating in jurisdictions identified as elevated sanctions risk require enhanced due diligence and approval by the Chief Compliance Officer before onboarding or renewal.
(c) Employee Training. Dunmore has conducted mandatory sanctions and export controls compliance training for all employees across the organization, with specialized advanced training for trading desk personnel, logistics staff, finance and treasury teams, and senior management. Training was conducted by Pemberton Investors Solutions in the first and second quarters of 2023 and will be repeated on an annual basis.
(d) Escalation Mechanisms. Dunmore has implemented a formal compliance escalation protocol that requires all potential sanctions red flags — including screening hits, suspicious counterparty behavior, unusual payment routing, and end-user certification anomalies — to be escalated immediately to the Chief Compliance Officer and, where warranted, to outside counsel for evaluation.
(e) Compliance Technology Infrastructure. Dunmore has invested in upgraded compliance technology, including implementation of an integrated trade compliance management system (provided by Fenmore Solutions) that integrates with DTI's trade and logistics platforms to provide automated, pre-transaction screening and real-time monitoring of shipments and payment flows.
Board-Level Adoption. The Board of Directors of Dunmore Energy Holdings Ltd. is expected to formally adopt the Enhanced Sanctions & Export Controls Compliance Program in fall 2023, following the delivery of Marlowe Asset Management's comprehensive remediation report.
Dunmore continues to cooperate fully with both OFAC and the DOJ National Security Division and is committed to ensuring that the remediation measures are fully implemented and sustained.
VIII. Section 7: Voluntary Disgorgement
Dunmore is in the process of calculating and preparing a voluntary disgorgement payment representing the estimated net profits derived from the nine (9) tainted crude oil swap transactions identified in this letter and in the June 1, 2023 VSD.
The calculation methodology is as follows:
• Aggregate notional value of tainted transactions: $156,300,000
• Estimated net margin: 5.6% (determined by Ridgeline Advisory Group based on an analysis of DTI's historical trading margins for comparable crude oil swap transactions, after deducting direct transaction costs, freight and insurance, financing costs, and allocated overhead)
• Estimated net profits: $156,300,000 × 5.6% = approximately $8,752,800 (rounded to approximately $8.75 million)
Dunmore anticipates making the voluntary disgorgement payment to the U.S. Treasury on or before November 30, 2023. The precise amount may be adjusted based on the finalization of Ridgeline's net margin analysis, and Dunmore will promptly notify OFAC of any material adjustment.
Dunmore respectfully submits that this voluntary disgorgement, taken together with its voluntary self-disclosure, full and continuing cooperation with OFAC and the DOJ, and the comprehensive compliance remediation described in Section 6 above, constitutes significant mitigating factors under OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. Part 501, Appendix A. Dunmore notes in particular that the Enforcement Guidelines identify voluntary self-disclosure, cooperation with OFAC, remedial response, and disgorgement of ill-gotten gains as among the most significant mitigating factors in OFAC's determination of the appropriate enforcement response. Dunmore respectfully requests that OFAC give full weight to these mitigating factors in its evaluation of this matter.
IX. Section 8: Enclosed Supplemental Documents
The following exhibits are enclosed with this letter, as referenced herein:
Exhibit A: Detailed transaction-level schedule of all fourteen (14) crude oil swap transactions, with the nine (9) tainted transactions highlighted, including counterparty identification, transaction date, notional value, commodity description, payment details, vessel/delivery references, and Volkhov connection indicators.
Exhibit B: Petronova Trading FZE — corporate registry documents from the Jebel Ali Free Zone Authority, beneficial ownership analysis (including bank account opening documentation referencing VIG), and organizational chart depicting the relationship between Petronova, Sergei Volkov, Arkady Volkhov, and Volkhov Industrial Group JSC.
Exhibit C: Zenith Petroleum DMCC — DMCC corporate registry documents, KYC materials (trade license, certificate of incorporation, passport copy for Farhan Qureshi), and related counterparty onboarding documentation obtained from DTI's compliance files.
Exhibit D: Caspian Logistik GmbH — shipment schedule for the eleven (11) oilfield equipment export transactions, end-user certificates (including those identified as potentially falsified), ECCN classification worksheets, and supporting freight forwarding and shipping documentation.
Exhibit E: Representative sample of wire transfer records from Crescent Commercial Bank PJSC (127 transactions totaling approximately $34.2 million), including SWIFT messages, wire transfer confirmations, and Ridgeline Advisory Group's layering analysis worksheets, with cross-references to DOJ Bates-numbered productions where applicable.
Exhibit F: Key personnel chart identifying the roles, organizational positions, dates of employment, and involvement in the relevant transactions of Derek Hargrave, Natasha Sorokin, Gerald Fisk, Omar Al-Rashidi, Yves Leclerc, and Rajesh Malhotra.
X. Reservation of Rights and Continuing Cooperation
Dunmore Energy Holdings Ltd. expressly reserves all rights and defenses available to it under applicable law, regulation, and executive order, including but not limited to any defenses based on the scope of the relevant sanctions authorities, the application of the 50 Percent Rule, the availability of general or specific licenses, and the adequacy of the evidentiary basis for any enforcement determination. Nothing in this letter, the June 1, 2023 VSD, or any prior or subsequent communication with OFAC shall be deemed an admission of liability or a waiver of any right or defense, except as specifically stated herein.
Notwithstanding the foregoing reservation, Dunmore reiterates its unwavering commitment to full and timely cooperation with OFAC in connection with its review of the VSD and the apparent violations disclosed therein. Dunmore stands ready to provide any additional information, documentation, or access to personnel that OFAC may reasonably require.
Dunmore notes that, in connection with its cooperation with OFAC and the DOJ, it has made a selective waiver of certain attorney-client privilege and attorney work product protections with respect to specific categories of documents and communications. This selective waiver has been made pursuant to a protocol agreed upon by counsel, and it is expressly limited to disclosures to OFAC and the DOJ. Dunmore does not waive, and expressly reserves, all privilege protections as to third parties, including but not limited to private litigants, regulatory authorities in other jurisdictions, and any other persons or entities.
Dunmore further notes its continuing cooperation with the DOJ National Security Division in connection with grand jury subpoena GJ No. 22-418, issued by the U.S. District Court for the District of Columbia on April 19, 2022. Dunmore has endeavored to coordinate its disclosures to OFAC and the DOJ to the greatest extent practicable in order to ensure consistency and to facilitate the efficient resolution of both proceedings.
XI. Confidentiality
Dunmore respectfully requests that OFAC treat the supplemental information contained in this letter and the enclosed Exhibits A through F as confidential business information, to the fullest extent permitted by law, including under the Trade Secrets Act, 18 U.S.C. § 1905, the Freedom of Information Act, 5 U.S.C. § 552 (particularly Exemptions 4 and 7), and any other applicable legal protections. The enclosed materials contain proprietary commercial and financial information, trade-sensitive data, and details of internal corporate investigations that, if disclosed publicly, could cause substantial competitive harm to Dunmore and its affiliates.
In addition, certain of the enclosed materials include attorney-client privileged communications and attorney work product that have been disclosed to OFAC pursuant to the limited, selective waiver protocol described in Section 10 above. Dunmore requests that OFAC maintain the confidentiality of these materials and not disclose them to third parties without prior consultation with undersigned counsel.
XII. Closing
We trust that the foregoing supplemental information is responsive to Ms. Matsuda's requests. Dunmore remains committed to cooperating fully with OFAC and to providing any additional information or clarification that may be needed as OFAC's review of this matter continues.
Should you wish to discuss any aspect of this submission, I am available at your convenience and can be reached at my direct dial number, (202) 555-7148, or by email at creeves@calderwoodharkness.com. In addition, Victoria Chambers, the Responsible Partner on this matter, is available for any matters requiring partner-level attention. Ms. Chambers can be reached at (202) 555-7110 or vchambers@calderwoodharkness.com at Calderwood & Harkness's Washington, D.C. office.
We appreciate OFAC's attention to this matter and look forward to continuing to work with you toward a resolution.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Conrad Reeves Senior Counsel, Export Controls & Sanctions 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Telephone: (202) 555-7148
Email: creeves@calderwoodharkness.com
cc:
Victoria Chambers, Partner, Calderwood & Harkness LLP Marcus Wellbourne, General Counsel, Dunmore Energy Holdings Ltd. Priya Nayar, Chief Compliance Officer, Dunmore Energy Holdings Ltd.
Enclosures:
Exhibit A — Detailed Transaction-Level Schedule (14 Crude Oil Swap Transactions) Exhibit B — Petronova Trading FZE: Corporate Registry, Beneficial Ownership Analysis & Organizational Chart Exhibit C — Zenith Petroleum DMCC: Corporate Registry & KYC Materials Exhibit D — Caspian Logistik GmbH: Shipment Schedule, End-User Certificates & ECCN Classifications Exhibit E — Representative Wire Transfer Records, Crescent Commercial Bank PJSC (127 Transactions / $34.2M) Exhibit F — Key Personnel Chart (Hargrave, Sorokin, Fisk, Al-Rashidi, Leclerc, Malhotra)
No. | Transaction Date | Counterparty | Commodity Description | Notional Value (USD) | Payment Method / Bank | Vessel / Delivery Reference | Identified Volkhov Connection
1 | June 12, 2020 | Petronova Trading FZE | ESPO Blend, 100,000 bbl | $4,250,000 | Wire transfer / Crescent Commercial Bank PJSC | MV Caspian Pioneer (IMO 9453217) | Crude sourced from VIG-controlled terminal at Kozmino Port; bill of lading references VIG subsidiary
2 | September 3, 2020 | Petronova Trading FZE | Urals Blend, 250,000 bbl | $10,875,000 | Wire transfer / Crescent Commercial Bank PJSC | MV Orion Star (IMO 9512340) | Shipping documents identify VIG Shipping LLC as charterer
3 | November 19, 2020 | Petronova Trading FZE | Urals Blend, 500,000 bbl | $22,150,000 | Wire transfer / Crescent Commercial Bank PJSC | MV Arktika Voyager (IMO 9487612) | Funds traced to VIG-controlled account at Eurokommerts Bank (Moscow)
4 | February 8, 2021 | Petronova Trading FZE | ESPO Blend, 350,000 bbl | $16,975,000 | Wire transfer / Crescent Commercial Bank PJSC | MV Caspian Pioneer (IMO 9453217) | VIG subsidiary identified as origin shipper in port loading records
5 | May 14, 2021 | Petronova Trading FZE | Urals Blend, 400,000 bbl | $21,600,000 | Wire transfer / Crescent Commercial Bank PJSC | MV Baltic Express (IMO 9534891) | Email correspondence between Sorokin and Volkov references "AV" and "the Group"
6 | August 27, 2021 | Petronova Trading FZE | ESPO Blend, 300,000 bbl | $17,400,000 | Wire transfer / Crescent Commercial Bank PJSC | MV Eastern Meridian (IMO 9561023) | VIG entity identified on certificate of origin; payment to VIG-linked account
7 | October 15, 2021 | Zenith Petroleum DMCC | Dubai (Fateh) Blend, 500,000 bbl | $28,750,000 | Wire transfer / Crescent Commercial Bank PJSC | MV Gulf Horizon (IMO 9602817) | Swap structured to deliver crude to VIG refinery subsidiary; Qureshi acted on Volkov's instructions per email evidence
8 | December 22, 2021 | Petronova Trading FZE | Urals Blend, 350,000 bbl | $18,550,000 | Wire transfer / Crescent Commercial Bank PJSC | MV Arktika Voyager (IMO 9487612) | VIG Shipping LLC identified as charterer; funds traced through layered accounts to VIG
9 | February 3, 2022 | Zenith Petroleum DMCC | ESPO Blend, 300,000 bbl | $15,750,000 | Wire transfer / Crescent Commercial Bank PJSC | MV Sakhalin Trader (IMO 9618432) | End-user documentation falsified; actual destination was VIG-controlled storage facility at Nakhodka
Shipment No. | Date | Equipment Description | ECCN | Value (USD) | Declared End User | Suspected Actual End User
1 | Aug. 14, 2020 | Directional drilling mud motors (qty. 4) | 2B999 | $780,000 | KazDrill Services LLP (Almaty, Kazakhstan) | Volkhov Neftegaz OOO (Tyumen, Russia)
2 | Oct. 2, 2020 | Downhole chemical injection sub-assemblies | 2B350 | $425,000 | Antalya Petrol A.Ş. (Istanbul, Turkey) | Volkhov Drilling Services OOO (Noyabrsk, Russia)
3 | Dec. 18, 2020 | MWD/LWD tool assemblies (qty. 6) | 2B999 | $1,650,000 | KazDrill Services LLP (Almaty, Kazakhstan) | Volkhov Neftegaz OOO (Tyumen, Russia)
4 | Feb. 26, 2021 | Drill bit assemblies, PDC type (qty. 20) | 2B999 | $920,000 | Gulf Technical Services FZE (Sharjah, UAE) | Volkhov Drilling Services OOO (Noyabrsk, Russia)
5 | May 7, 2021 | Downhole pressure/temperature gauges (qty. 50) | 2B999 | $1,375,000 | Antalya Petrol A.Ş. (Istanbul, Turkey) | Volkhov Neftegaz OOO (Tyumen, Russia)
6 | Jul. 16, 2021 | Chemical processing skid units (qty. 2) | 2B350 | $2,100,000 | KazDrill Services LLP (Almaty, Kazakhstan) | Volkhov Neftegaz OOO (Tyumen, Russia)
7 | Sep. 24, 2021 | Rotary steerable system components | 2B999 | $1,450,000 | Gulf Technical Services FZE (Sharjah, UAE) | Volkhov Drilling Services OOO (Noyabrsk, Russia)
8 | Nov. 5, 2021 | Wellhead control panels (qty. 8) | 2B999 | $890,000 | Antalya Petrol A.Ş. (Istanbul, Turkey) | Unknown (under investigation)
9 | Nov. 30, 2021 | Casing running tools and accessories | 2B999 | $765,000 | KazDrill Services LLP (Almaty, Kazakhstan) | Unknown (under investigation)
10 | Jan. 6, 2022 | Downhole chemical injection manifolds | 2B350 | $1,180,000 | Gulf Technical Services FZE (Sharjah, UAE) | Unknown (under investigation)
11 | Jan. 27, 2022 | Directional drilling mud motors (qty. 3); drill collars | 2B999 | $865,000 | KazDrill Services LLP (Almaty, Kazakhstan) | Unknown (under investigation)

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