1016-00009 · Dunmore Energy Holdings · Privilege & Work Product

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MEMORANDUM

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

TO: Victoria Chambers, Responsible Partner Howard Quinn, Billing Partner Conrad Reeves, Senior Counsel Jasmine Thornton, Lead Associate Liam Donahue, Working Associate Amara Osei, Associate Nicholas Ferreira, Associate

FROM: Victoria Chambers, Partner, and Jasmine Thornton, Associate — White Collar & Investigations Group, Calderwood & Harkness LLP

DATE: July 1, 2022

RE: Protocol for Selective Waiver of Attorney-Client Privilege and Work Product Protections in Connection with Disclosures to the U.S. Department of Justice and OFAC — Dunmore Energy Holdings Ltd.

MATTER NO.: 1016-00009

CLIENT: Dunmore Energy Holdings Ltd. ("Dunmore" or "DEH")

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I. Purpose and Scope of this Memorandum

This memorandum establishes the firm's internal protocol and binding guidelines governing the selective waiver of attorney-client privilege and attorney work product protections in connection with Calderwood & Harkness LLP's ("C&H" or the "Firm") representation of Dunmore Energy Holdings Ltd. ("Dunmore" or "DEH") in the inquiry opened on April 19, 2022, by the U.S. Department of Justice, National Security Division, Counterintelligence and Export Control Section ("DOJ-NSD" or "DOJ"), and any related proceedings initiated by the Office of Foreign Assets Control ("OFAC"), U.S. Department of the Treasury.

This protocol applies to all disclosures — whether oral, written, electronic, or in any other form — made by C&H attorneys, staff, retained consultants, or Dunmore personnel at C&H's direction to (a) the DOJ, including the National Security Division, Counterintelligence and Export Control Section; (b) OFAC, including any personnel within the Office of Compliance and Enforcement; and (c) the Federal Bureau of Investigation ("FBI"), to the extent the FBI is acting in coordination with DOJ-NSD in connection with this matter.

The lead DOJ prosecutors assigned to the Dunmore matter are Assistant United States Attorney Meredith Calloway, Trial Attorney Samuel Kovacs, and Trial Attorney Diana Pressman. The FBI Case Agent assigned to the investigation is Special Agent Paul Reinhardt. The OFAC Compliance Analyst who has been designated as the primary contact for any voluntary self-disclosure is Erin Matsuda.

The government inquiry was initiated through the service of grand jury subpoena GJ No. 22-418, issued by the U.S. District Court for the District of Columbia (Grand Jury 22-2) on April 19, 2022. The subpoena was served on Dunmore's registered agent in the United States on the same date. C&H's engagement in this matter, and the factual and legal circumstances giving rise to it, are described in greater detail in Section II below.

This memorandum is itself protected by the attorney-client privilege and the work product doctrine. Distribution is limited to the C&H engagement team members listed above. No copies of this memorandum — whether in hard copy or electronic form — are to be disseminated outside of the listed recipients without the express prior written approval of Victoria Chambers. This protocol may be shared, in whole or in part, with Dunmore General Counsel Marcus Wellbourne and, subject to the terms and conditions of the Joint Defense / Common Interest Agreement dated April 25, 2022, with Harwood & Pennington LLP (Arthur Pennington III, lead counsel to Greystone Capital Partners Fund IV, L.P.) and the designated legal representative of Thornbury Infrastructure Fund II, L.P., as applicable. Any such sharing must be approved in advance by Victoria Chambers and documented in the disclosure log maintained pursuant to Section X of this memorandum.

The purpose of this protocol is threefold: first, to ensure that Dunmore is able to cooperate fully and meaningfully with the government in a manner that maximizes cooperation credit under applicable DOJ and OFAC frameworks; second, to preserve the attorney-client privilege and work product protections as to all third parties other than the DOJ and OFAC; and third, to provide clear, administrable guidelines to the C&H engagement team so that waiver decisions are made deliberately, with appropriate authorization, and with a full understanding of their legal consequences.

II. Background

A. The Engagement

Calderwood & Harkness LLP was retained by Dunmore Energy Holdings Ltd. on April 14, 2022. The engagement was precipitated by events that unfolded in the preceding days. On April 11, 2022, Gerald Fisk, Senior Vice President of Trading Operations at Dunmore Trading International Ltd. (the Dubai-based trading subsidiary), identified potential historical exposure to Volkhov Industrial Group JSC ("Volkhov") through certain transactions involving Petronova Trading FZE ("Petronova"), a free zone entity registered in the United Arab Emirates. Fisk reported his findings to Dunmore's General Counsel, Marcus Wellbourne, on the same date. Wellbourne, after an initial assessment of the nature and potential severity of the exposure, promptly engaged C&H's White Collar & Investigations Group.

The scope of C&H's engagement encompasses the following: (i) conducting a comprehensive internal investigation into Dunmore's historical transactions involving Petronova, Zenith Petroleum DMCC ("Zenith Petroleum"), Caspian Logistik GmbH ("Caspian Logistik"), and any other entities that may have served as intermediaries or fronts for Volkhov Industrial Group JSC; (ii) responding to all DOJ subpoenas, document requests, and other process; (iii) advising Dunmore on the remediation of compliance deficiencies in its sanctions screening, export controls, and anti-money-laundering programs; and (iv) defending Dunmore against potential prosecution, administrative enforcement, and related proceedings.

Dunmore Energy Holdings Ltd. is a Cayman Islands exempted company (registration no. MC-334821), with its operational headquarters located at 1200 McKinney Street, Suite 3400, Houston, Texas 77010. The company is a diversified energy holding company with upstream exploration and production operations, midstream infrastructure, energy trading, and renewable energy development activities across multiple continents.

The following key subsidiaries are involved in the matters under investigation and are therefore within the scope of this engagement:

• Dunmore Trading International Ltd. — Dubai International Financial Centre, DIFC License No. CL-4827. This entity conducted the crude oil swap transactions that are at the center of the DOJ inquiry.

• Dunmore upstream Americas LLC — Organized under the laws of the State of Delaware, EIN 84-2937561. This entity is the primary U.S. operating subsidiary and the entity through which Dunmore maintains its U.S. nexus for jurisdictional purposes.

• Dunmore Renewables GmbH — Hamburg, Germany. This entity is relevant due to its engagement of Caspian Logistik GmbH for certain logistics and procurement services.

• Dunmore Exploration West Africa Ltd. — Lagos, Nigeria. This entity's operations are relevant to certain ancillary transactions identified during the internal investigation.

B. The Government Inquiry

The DOJ National Security Division, Counterintelligence and Export Control Section, is investigating potential violations of United States sanctions laws and export control regulations by Dunmore and certain of its subsidiaries, officers, and employees. Specifically, the government's inquiry focuses on potential violations of the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. §§ 1701–1706, and the Export Control Reform Act ("ECRA"), 50 U.S.C. §§ 4801–4852, together with the Export Administration Regulations ("EAR"), 15 C.F.R. Parts 730–774.

Based on C&H's internal investigation to date, the conduct at issue falls into three principal categories:

1. Crude Oil Swap Transactions. Approximately $218.7 million in notional value across fourteen (14) separate crude oil swap transactions between Dunmore Trading International Ltd. and Petronova Trading FZE and Zenith Petroleum DMCC, executed between June 2020 and February 2022. The internal investigation has identified nine (9) of these fourteen transactions, representing approximately $156.3 million in notional value, as potentially tainted by reason of the ultimate beneficial interest of Volkhov Industrial Group JSC in Petronova and, indirectly, in Zenith Petroleum.

2. Oilfield Equipment Exports. Approximately $12.4 million in oilfield equipment and technology exports facilitated through Caspian Logistik GmbH between August 2020 and January 2022. These transactions involved dual-use items potentially subject to the EAR and may have resulted in the re-export of U.S.-origin goods, technology, or software to Volkhov-controlled entities in the Russian Federation without the required licenses from the Bureau of Industry and Security.

3. Payment Structuring. Approximately $34.2 million in aggregate funds transfers across one hundred twenty-seven (127) separate transactions through Crescent Commercial Bank PJSC (a UAE-based financial institution) between March 2020 and March 2022. The structuring of payments through Crescent Commercial Bank appears to have been designed to avoid triggering sanctions screening filters at U.S. correspondent banks by routing payments through non-U.S. intermediary accounts.

The sanctions designations relevant to this matter are as follows. Volkhov Industrial Group JSC was initially designated under OFAC Directive 2 of Executive Order 13662 (Sectoral Sanctions Identifications List) on November 15, 2019, which imposed restrictions on debt and equity financing. Subsequently, Volkhov was added to OFAC's Specially Designated Nationals and blocked Persons List ("SDN List") under Executive Order 14024 on April 6, 2022, subjecting Volkhov to full blocking sanctions. The timing of these designations — and, in particular, whether Dunmore personnel had actual or constructive knowledge of Volkhov's beneficial ownership of Petronova and Zenith Petroleum at the time the earlier transactions were executed — is a central factual issue in the investigation.

C&H conducted an initial proffer to AUSA Calloway on July 15, 2022, at the DOJ Main Justice Building in Washington, D.C. The proffer was oral, preceded by the selective waiver caveats described in Section IV.D of this memorandum, and addressed the factual scope of Dunmore's internal investigation findings to date. A supplemental proffer is anticipated following completion of additional witness interviews and forensic analysis.

The e-discovery effort associated with this matter is substantial. As of the date of this memorandum, C&H has collected 2,347,812 documents from custodians, shared drives, and other data sources across six jurisdictions: the Cayman Islands, the United Arab Emirates, the United States, Germany, Nigeria, and the United Kingdom. Nexagen Analytics Inc. ("Nexagen"), a third-party e-discovery and data analytics provider, has been retained under Project No. NX-DEH-2204 for document processing, hosting, and technology-assisted review ("TAR"). Brian Cavanaugh serves as the Nexagen project manager, and Thomas Bradshaw (C&H Senior Paralegal, e-discovery Lead) coordinates directly with Nexagen on all processing and review workflow matters. As of the date of this memorandum, document review is ongoing, with the first production to DOJ anticipated for November 1, 2022. Based on preliminary privilege screening, C&H anticipates that approximately 12,847 documents will be withheld from production on the basis of attorney-client privilege and/or the work product doctrine.

C. Related Agreements

Joint Defense / Common Interest Agreement. On April 25, 2022, Dunmore, Greystone Capital Partners Fund IV, L.P. ("Greystone"), and Thornbury Infrastructure Fund II, L.P. ("Thornbury") entered into a Joint Defense / Common Interest Agreement (the "JD/CIA"). Greystone holds a 62.5% equity interest in Dunmore and is represented by outside counsel Harwood & Pennington LLP, with Arthur Pennington III serving as lead partner. Thornbury holds a 15% equity interest in Dunmore; its managing director is Helen Cresswell. The JD/CIA establishes a common legal interest among the parties with respect to the DOJ investigation and any related government or private proceedings, and provides that privileged communications shared among the parties pursuant to the agreement retain their privileged character. The implications of the JD/CIA for the selective waiver protocol are discussed in Section VII below.

Individual Counsel Arrangements. Several individual Dunmore officers and employees have retained, or are expected to retain, separate personal counsel in connection with the government inquiry. The following arrangements have been established or are anticipated:

• Gerald Fisk, Senior Vice President, Trading Operations, Dunmore Trading International Ltd. Personal counsel: Catherine Blackthorn, Blackthorn & Associates LLP, 700 Louisiana Street, Suite 4300, Houston, Texas 77002. Potential adverse interests between Fisk and Dunmore have been identified based on preliminary investigation findings. No privileged investigation materials are to be shared with Blackthorn.

• Derek Hargrave, Managing Director, Energy Trading, Dunmore Trading International Ltd. Personal counsel: James Overstreet, Overstreet & McClain PLLC, 2200 Ross Avenue, Suite 3600, Dallas, Texas 75201. Hargrave was placed on administrative leave effective July 1, 2022, following C&H's preliminary determination that Hargrave may have had direct knowledge of and involvement in the structuring of transactions through Crescent Commercial Bank. No privileged investigation materials are to be shared with Overstreet. Hargrave's personal counsel may assert individual privilege over certain of Hargrave's communications, and such communications must be identified and preserved on the privilege log.

• Natasha Sorokin, Director of International Compliance, Dunmore Energy Holdings Ltd. Personal counsel: Philip Keane, Wexford Keane LLP, 2000 K Street NW, Suite 650, Washington, D.C. 20006 (anticipated to enter an appearance; not yet formally retained as of this memorandum date). Sorokin was placed on administrative leave effective May 16, 2022, following the discovery of evidence suggesting potential failures in Dunmore's sanctions screening program that may be attributable to Sorokin's oversight responsibilities. The same information-sharing restrictions applicable to Fisk and Hargrave apply to Sorokin.

The information-sharing limitations applicable to individual counsel are discussed in greater detail in Section VI of this memorandum.

III. Legal Framework Governing Selective Waiver

The selective waiver doctrine presents a complex and, in significant respects, unsettled area of federal law. This section provides the legal framework that informs the protocol set forth in Sections IV through IX below. All team members should be familiar with this framework, as it supplies the legal rationale for the waiver decisions contemplated by this protocol and identifies the risks that the protocol is designed to mitigate.

A. Attorney-Client Privilege

The attorney-client privilege protects from disclosure confidential communications made between a client and the client's attorney for the purpose of seeking or providing legal advice. The privilege belongs to the client and may be waived only by the client or with the client's consent. In the corporate context, the privilege extends to communications between attorneys and officers, directors, and employees of the corporate client acting within the scope of their duties and at the direction of corporate counsel. See Upjohn Co. v. United States, 449 U.S. 383 (1981).

The general rule is well-established: voluntary disclosure of a privileged communication to a third party waives the attorney-client privilege. This is because the privilege protects the confidentiality of the communication; once confidentiality is destroyed through voluntary disclosure, the rationale for the privilege ceases to exist. However, the application of this general rule to disclosures made to government agencies in the context of regulatory investigations and cooperation has generated significant judicial disagreement.

The "selective waiver" doctrine holds that a party may disclose privileged communications to a government agency — such as the DOJ or OFAC — without waiving the privilege as to other third parties. Under this doctrine, disclosure to the government is treated as a limited waiver that does not destroy the confidentiality of the communication as to the rest of the world. The rationale is that encouraging voluntary cooperation with government agencies serves important public interests, and parties would be deterred from cooperating if doing so resulted in a wholesale waiver of privilege that could be exploited by private litigants, insurers, or other adversaries.

The selective waiver doctrine, however, is not universally recognized across the federal circuits. The Eighth Circuit adopted the doctrine in Diversified Industries, Inc. v. Meredith, 572 F.2d 596, 611 (8th Cir. 1977) (en banc), holding that disclosure of privileged materials to the SEC did not waive the privilege in a subsequent civil action. However, the majority of circuits that have addressed the issue have rejected or significantly limited the doctrine. The D.C. Circuit — which is of direct relevance here because grand jury subpoena GJ No. 22-418 was issued by the U.S. District Court for the District of Columbia — has not squarely addressed the selective waiver doctrine in a published opinion. The D.C. Circuit's precedent on waiver more generally, however, suggests a fact-specific inquiry into whether the disclosure was consistent with the purpose of the privilege and whether appropriate steps were taken to preserve confidentiality. See In re Sealed Case, 877 F.2d 976 (D.C. Cir. 1989).

Other circuits have reached varying conclusions. The Second Circuit rejected selective waiver in In re Steinhardt Partners, L.P., 9 F.3d 230 (2d Cir. 1993), while suggesting that a confidentiality agreement between the disclosing party and the government might support a different result. The Third Circuit rejected selective waiver in Westinghouse Electric Corp. v. Republic of the Philippines, 951 F.2d 1414 (3d Cir. 1991). The Sixth Circuit also rejected the doctrine in In re Columbia/Crowne Albany Partners LLC Billing Practices Litigation, 293 F.3d 289 (6th Cir. 2002). The Fourth Circuit found no selective waiver in In re Martin Marietta Corp., 856 F.2d 619 (4th Cir. 1988).

This circuit split creates significant uncertainty. While C&H's protocol is designed to maximize the likelihood that selective waiver will be upheld, the team should be aware that there is no guarantee that a court — whether in the D.C. Circuit or in another jurisdiction where third-party litigation may be brought — will recognize the selective waiver doctrine. This uncertainty underscores the importance of the additional protective measures discussed below, including the pursuit of a FRE 502(d) order.

Federal Rule of Evidence 502, enacted in 2008, provides a statutory framework that addresses certain waiver issues. FRE 502(a) limits the scope of waiver resulting from a disclosure in a federal proceeding, providing that the waiver extends to undisclosed communications or information only if the disclosed and undisclosed materials concern the same subject matter and the disclosed and undisclosed materials "ought in fairness" to be considered together. FRE 502(b) provides that disclosure made in a federal proceeding does not operate as a waiver if the disclosure was inadvertent, the holder took reasonable steps to prevent disclosure, and the holder promptly took reasonable steps to rectify the error. Most significantly for our purposes, FRE 502(d) provides that a federal court may order that the privilege or protection is not waived by disclosure connected with the litigation pending before the court, and that such an order is enforceable against all persons or entities in any federal or state proceeding. A FRE 502(d) order, if obtained, would provide a powerful safeguard against any argument that Dunmore's disclosures to DOJ constituted a broader waiver.

It is our strong recommendation that C&H seek a FRE 502(d) order from the U.S. District Court for the District of Columbia, as discussed in greater detail in Section IV.E below.

B. Work Product Doctrine

The work product doctrine, first recognized in Hickman v. Taylor, 329 U.S. 495 (1947), and codified in Federal Rule of Civil Procedure 26(b)(3), protects from discovery documents and tangible things prepared in anticipation of litigation or for trial by or for a party or its representative. The work product doctrine serves a distinct purpose from the attorney-client privilege: it protects the adversary process by ensuring that one party does not benefit from the other party's litigation preparation efforts.

The work product doctrine provides two tiers of protection. "Fact" work product — materials reflecting factual information gathered in anticipation of litigation — is entitled to qualified protection. Such materials may be discovered upon a showing of substantial need and inability to obtain the substantial equivalent without undue hardship. "Opinion" work product — materials reflecting the mental impressions, conclusions, opinions, and legal theories of an attorney — is entitled to heightened, near-absolute protection. Courts have consistently held that opinion work product is virtually undiscoverable, and most courts hold that even a showing of substantial need and undue hardship cannot overcome the protection. See, e.g., Upjohn Co. v. United States, 449 U.S. at 401 (noting that disclosure of opinion work product would "Discourage the communication deemed essential to counsel's effective representation").

The work product doctrine is directly relevant to this protocol because many of the materials generated during the internal investigation — including investigation memoranda, witness interview summaries, legal analyses, and strategic assessments — constitute work product. The question of whether voluntary disclosure of work product to a government agency results in waiver as to third parties is analytically distinct from the corresponding question under the attorney-client privilege.

Courts have generally been more receptive to the argument that work product protection survives disclosure to the government than they have been with respect to the attorney-client privilege. The rationale is that the work product doctrine protects against disclosure to adversaries, and the government, in the cooperation context, is not necessarily an adversary. See, e.g., In re Steinhardt Partners, L.P., 9 F.3d at 236 (suggesting that work product protection may survive disclosure to a government agency where the disclosure does not substantially increase the likelihood that an adversary will obtain the materials). This distinction is particularly strong with respect to opinion work product, which reflects the mental processes of counsel and serves the most fundamental purposes of the adversary system.

Accordingly, even in circuits that have rejected the selective waiver doctrine as applied to the attorney-client privilege, there may be a stronger basis for arguing that work product protection survives disclosure to DOJ or OFAC — particularly for opinion work product. Nevertheless, the safest course is to avoid disclosing any work product to the government unless necessary, and to implement the procedural safeguards described in this protocol.

It is important to note that DOJ guidance explicitly states that the Department does not require waiver of the attorney-client privilege or the work product doctrine as a condition of receiving cooperation credit. The DOJ Corporate Enforcement Policy (as updated; the version in effect at the time of this memorandum is the prior iteration of the September 2022 update) provides that corporations may receive full cooperation credit by providing relevant facts to the Department without waiving privilege. The policy states: "To be clear, the Department does not require that companies waive attorney-client privilege or attorney work product protections in order to receive credit for cooperation." This is consistent with the Filip Memorandum (August 28, 2008) and the Yates Memorandum (September 9, 2015, as subsequently modified), both of which emphasize the importance of corporations providing relevant facts without requiring privilege waivers. The DOJ Evaluation of Corporate Compliance Programs, which is also relevant to Dunmore's cooperation posture and will be referenced in connection with remediation efforts, similarly does not predicate credit on privilege waiver.

The practical implication is that Dunmore should be able to achieve meaningful cooperation credit by disclosing factual information — including factual proffers, non-privileged business records, and factual findings from the forensic analysis — without disclosing opinion work product or privileged attorney-client communications. This is the foundational principle underlying the protocol set forth in Sections IV and V below.

C. OFAC Voluntary Self-Disclosure Considerations

In addition to the DOJ investigation, Dunmore is evaluating the submission of a voluntary self-disclosure ("VSD") to OFAC in connection with potential apparent violations of OFAC-administered sanctions programs. The VSD was ultimately filed on June 1, 2023, but as of the date of this memorandum, the decision to file has not yet been finalized. The selective waiver protocol must therefore account for both DOJ and OFAC disclosures from the outset.

OFAC's Economic Sanctions Enforcement Guidelines (31 C.F.R. Part 501, Appendix A) identify voluntary self-disclosure as a significant mitigating factor in the determination of enforcement responses. A party that submits a VSD and is found to have committed an apparent violation may receive a substantially reduced civil monetary penalty — potentially as much as a 50% reduction from the base penalty amount — as compared to a party that does not self-disclose. OFAC has also indicated that it will give credit for cooperation that is timely, thorough, and demonstrates good faith.

Critically, OFAC does not require waiver of the attorney-client privilege or the work product doctrine as a condition of accepting a VSD or granting cooperation credit. The same factual-disclosure approach that applies to DOJ cooperation applies in the OFAC context: Dunmore can provide a comprehensive factual account of the apparent violations without disclosing privileged communications or attorney work product.

The OFAC sanctions programs at issue in this matter are: (i) Directive 2 under Executive Order 13662 of March 20, 2014 (as amended), which imposed sectoral sanctions on specified entities in the Russian financial services, energy, and defense sectors, implemented through 31 C.F.R. Part 589 (Ukraine-/Russia-Related Sanctions Regulations); and (ii) Executive Order 14024 of April 15, 2021, which authorized full blocking sanctions with respect to specified harmful foreign activities of the Government of the Russian Federation, also implemented under 31 C.F.R. Part 589.

The timing and coordination of disclosures to DOJ and OFAC present additional considerations. Factual information provided to one agency may be shared with the other, either through formal inter-agency coordination or informal channels. Accordingly, the selective waiver protocol must ensure consistency between DOJ and OFAC disclosures and must treat disclosures to each agency with the same degree of procedural rigor. The additional considerations specific to OFAC are addressed in Section V below.

D. Risks of Waiver

The consequences of an unintended or overbroad waiver of privilege or work product protection could be severe for Dunmore and its officers and directors. The following categories of risk must be considered in every waiver decision:

Third-Party Litigation Risk. If the selective waiver is not upheld and Dunmore's disclosures to DOJ or OFAC are deemed to constitute a general waiver of privilege, C&H's internal investigation materials — including witness interview memoranda, legal analyses, strategy documents, and privileged communications with Dunmore management — could become discoverable in civil litigation brought by counterparties, shareholders, or lenders. Meridian National Bank, N.A. ("Meridian"), which serves as administrative agent under Dunmore's $750 million revolving credit facility, may pursue claims against Dunmore in the event that the government investigation results in defaults or material adverse changes under the credit agreement. Gregory Stanhope, Managing Director at Meridian, has already made informal inquiries regarding the status of the investigation. Additionally, counterparties to the crude oil swap transactions and oilfield equipment contracts may assert claims for rescission, damages, or indemnification. Shareholder derivative actions or securities fraud class actions, while less likely given Dunmore's private ownership structure, cannot be ruled out entirely given the involvement of institutional investors such as Greystone and Thornbury.

D&O Insurance Implications. Dunmore maintains directors' and officers' liability insurance through Garrison Mutual Insurance Co. under policy number GM-DO-2021-08734, with a $50 million aggregate limit, a $10 million per-claim sublimit, and a $2.5 million per-claim retention. The claims adjuster assigned to the matter is Patricia Holbrook. Garrison Mutual is providing coverage for defense costs (but not for disgorgement, restitution, or penalties). In the course of evaluating claims and reserving rights, the insurer may request access to C&H's investigation materials. Disclosure of privileged materials to Garrison Mutual is a separate issue from selective waiver to DOJ/OFAC, and it is critical that any selective waiver to the government not be construed as an inadvertent waiver as to the insurer. If Garrison Mutual were to obtain privileged materials and subsequently share them — whether in the context of litigation over coverage, subrogation, or otherwise — the resulting waiver could be catastrophic. The protocol must therefore maintain strict separation between government disclosures and insurer communications.

Individual Defendant Exposure. Gerald Fisk, Derek Hargrave, and Natasha Sorokin are each represented by separate personal counsel, as described in Section II.C above. In the event that Dunmore's interests diverge further from the interests of these individuals — as appears increasingly likely with respect to Hargrave and Sorokin — selective waiver to DOJ of certain investigation findings could impact the individuals' defense strategies. Dunmore must retain the ability to assert privilege against individual counsel in the event of adversarial proceedings (e.g., indemnification disputes, cross-claims, or situations where individual counsel seek to compel production of Dunmore's investigation files). If the selective waiver to DOJ is deemed to be a general waiver, individual counsel could argue that the privileged materials are available to them as well. The Upjohn framework, which vests the privilege in the corporate client, supports Dunmore's position — but only if the selective waiver is properly structured and maintained.

Outside Auditor Considerations. Ashford & Whitmore LLP ("A&W"), Dunmore's independent outside auditors (engagement partner Kenneth Ashford), may request access to investigation materials in connection with their audit of Dunmore's consolidated financial statements for the fiscal year ending December 31, 2022. Auditors routinely request information regarding pending or threatened litigation and government investigations in order to assess internal controls over financial reporting, evaluate contingent liabilities, and satisfy their obligations under Public Company Accounting Oversight Board ("PCAOB") standards (to the extent applicable) and generally accepted auditing standards. Under the majority rule in U.S. courts, disclosure of privileged attorney-client communications to outside auditors constitutes a waiver of the privilege, because auditors are not within the scope of the attorney-client relationship and their interests are not aligned with those of the client in a manner that would support a common interest privilege. See, e.g., In re Northpoint Holdings Securities Litigation, 1993 WL 561125 (S.D.N.Y. 1993). Accordingly, the disclosure of investigation materials to A&W must be handled separately and with extreme caution. This issue is addressed in Section IX below.

IV. Protocol for Selective Waiver to DOJ

A. Categories of Information Eligible for Disclosure

The following categories of information may be disclosed to DOJ, subject to compliance with the approval process set forth in Section IV.C below. The overarching principle is that Dunmore may share facts with the government without waiving privilege, provided that the disclosures are structured to exclude attorney-client communications, opinion work product, and protected common interest materials.

1. Factual Proffers and Summaries. Oral and written factual summaries of C&H's investigation findings may be disclosed to DOJ. These proffers should describe the relevant facts in a straightforward, narrative manner without attribution to privileged sources and without inclusion of legal analysis, mental impressions, or strategic assessments. Factual proffers may address, among other things:

(a) the fourteen (14) crude oil swap transactions between Dunmore Trading International Ltd. and Petronova Trading FZE and Zenith Petroleum DMCC (approximately $218.7 million aggregate notional value);

(b) the nine (9) transactions within the foregoing group that C&H has identified as potentially tainted by Volkhov's beneficial interest (approximately $156.3 million notional value), including transaction dates, counterparties, volumes, pricing terms, settlement mechanisms, and the factual basis for the determination that Volkhov held a beneficial interest;

(c) the oilfield equipment exports facilitated through Caspian Logistik GmbH (approximately $12.4 million), including descriptions of the goods exported, origin of the goods, shipping routes, end-use certifications (or the absence thereof), and the identity of ultimate consignees;

(d) the payment structuring through Crescent Commercial Bank PJSC (approximately $34.2 million across 127 transactions), including transaction amounts, dates, routing information, correspondent banking relationships, and the factual basis for the conclusion that the structuring was designed to avoid sanctions screening; and

(e) counterparty information regarding Petronova Trading FZE, Zenith Petroleum DMCC, Caspian Logistik GmbH, and Volkhov Industrial Group JSC, including corporate registration details, beneficial ownership information, and the relationships among these entities as established through the internal investigation.

2. Non-Privileged Business Records. Documents produced to DOJ in response to grand jury subpoena GJ No. 22-418 are non-privileged business records and their production does not raise waiver issues. These documents are assigned Bates numbers with the prefix DEH-DOJ (e.g., DEH-DOJ-000001). Production of these documents is mandatory under the subpoena and does not constitute a voluntary disclosure for purposes of the selective waiver analysis. However, the production must be carefully screened to ensure that no privileged documents are inadvertently produced. The privilege review workflow and quality control procedures are described in the Document Review Protocol dated May 15, 2022.

3. Factual Portions of Forensic Reports. Ridgeline Advisory Group LLC ("Ridgeline"), a forensic accounting and financial advisory firm, has been retained by C&H under Engagement No. RAG-2022-0319 (lead engagement partner: Dr. Margaret Liu, CPA, CFE) to conduct forensic analysis of Dunmore's transaction flows, payment patterns, and beneficial ownership structures. Ridgeline's engagement is structured as a consultant retained by counsel in anticipation of litigation, and its reports and communications with C&H are protected by the work product doctrine. However, the factual findings contained in Ridgeline's reports — including transaction flow charts, payment tracing analyses relating to Crescent Commercial Bank PJSC, and beneficial ownership diagrams — may be shared with DOJ as part of factual proffers, provided that:

(a) all sections of Ridgeline's reports that contain legal analysis, strategy recommendations, or the mental impressions and conclusions of C&H attorneys are redacted prior to disclosure;

(b) the disclosed factual findings are presented as Dunmore's own factual submissions, rather than as attorney work product or as a Ridgeline "report" in its entirety; and

4. Witness Interview Summaries (Factual Content Only). C&H has conducted, or plans to conduct, witness interviews of approximately forty-seven (47) individuals across three interview rounds: twenty-two (22) interviews in the first round (May–June 2022), fifteen (15) interviews in the second round (anticipated August–October 2022), and ten (10) interviews in the third round (anticipated November 2022–March 2023). Factual summaries derived from these interviews may be shared with DOJ as part of factual proffers, subject to the following conditions:

(a) only factual information obtained from the witnesses — i.e., the substance of what the witness said regarding events, transactions, knowledge, and communications — may be disclosed;

(b) all legal analysis, mental impressions of the interviewing attorneys, credibility assessments, and annotations reflecting C&H's litigation strategy must be separated from the factual content and withheld;

(c) factual summaries should be prepared as standalone documents that do not reference or incorporate the underlying interview memoranda (which are protected work product); and

(d) the disclosure is approved through the process described in Section IV.C.

5. Compliance Program Assessments. Factual descriptions of Dunmore's pre-existing sanctions compliance program, trade compliance controls, and the remediation measures being implemented may be shared with DOJ. The DOJ Evaluation of Corporate Compliance Programs expressly considers the adequacy of a company's compliance program as a factor in charging and sentencing decisions, and the provision of factual information about the compliance program is an important element of cooperation. However, C&H's legal analysis regarding the adequacy or inadequacy of the compliance program — including assessments of whether the program was "effective" within the meaning of the U.S. Sentencing Guidelines — constitutes opinion work product and must be withheld. Factual descriptions may include the organizational structure of the compliance function, the specific screening tools and databases used, the frequency of compliance training, the results of prior compliance audits, and the specific remediation steps being undertaken.

B. Categories of Information NOT Eligible for Disclosure

The following categories of information are not eligible for disclosure to DOJ under any circumstances without a separate, case-specific waiver determination approved through the process described in Section IV.C and a specific finding by Victoria Chambers that the disclosure is in Dunmore's interest notwithstanding the risks identified below.

1. Opinion Work Product. All internal memoranda, analyses, and other documents containing the legal analysis, mental impressions, conclusions, opinions, and strategy recommendations of C&H attorneys are absolutely protected and may not be disclosed to DOJ. This category includes, but is not limited to, the following:

(a) investigation plan memoranda, including the Investigation Plan and Work Stream Assignments dated April 18, 2022;

(b) the Sanctions Framework Analysis prepared by Conrad Reeves, dated April 27, 2022, which analyzes the application of E.O. 13662, E.O. 14024, and the Ukraine-/Russia-Related Sanctions Regulations to the transactions at issue;

(c) the Export Control Analysis prepared by Conrad Reeves, dated May 5, 2022, which analyzes the application of the EAR and ECRA to the oilfield equipment exports;

(d) the U.S. Person Analysis prepared by Jasmine Thornton, dated May 10, 2022, which analyzes whether the relevant Dunmore entities and employees qualify as "U.S. persons" under OFAC's regulatory framework and whether the transactions involved a sufficient U.S. nexus;

(e) individual culpability assessments for Derek Hargrave, Natasha Sorokin, Gerald Fisk, and other Dunmore personnel, which analyze the state of mind and potential criminal exposure of individual actors; and

(f) all other memoranda, e-mails, notes, and documents reflecting C&H attorneys' legal theories, strategic assessments, evaluation of evidence, or recommendations regarding the defense of this matter.

2. Attorney-Client Communications. All communications between C&H and Dunmore personnel — including, without limitation, CEO Callum Renshaw, General Counsel Marcus Wellbourne, CFO Sandra Whitfield, and Chief Compliance Officer Priya Nayar — that were made for the purpose of seeking or rendering legal advice are protected by the attorney-client privilege and may not be disclosed to DOJ. This includes oral communications, written correspondence, e-mail exchanges, text messages, video conference discussions, and any other form of communication between C&H and Dunmore personnel in their capacity as representatives of the corporate client.

3. Common Interest Communications. All communications shared among the parties to the Joint Defense / Common Interest Agreement dated April 25, 2022 — including communications between C&H and Harwood & Pennington LLP (counsel for Greystone Capital Partners Fund IV, L.P.) and communications involving Thornbury Infrastructure Fund II, L.P.'s legal representatives — are protected by the common interest privilege. These communications may not be disclosed to DOJ without the consent of all parties to the JD/CIA, as discussed in Section VII below.

4. Privilege Log Entries. The privilege log itself, prepared and maintained by Elena Vasquez and Thomas Bradshaw, and the substantive content of the approximately 12,847 documents anticipated to be withheld on privilege grounds, are protected and may not be disclosed to DOJ. The privilege log will be produced to DOJ in connection with document productions, as is customary, but the log entries themselves do not constitute a waiver of the underlying privilege. The specificity of the privilege log entries must be sufficient to sustain the privilege assertions but must not be so detailed as to reveal the substance of the privileged communications.

5. Litigation Strategy and Defense Planning. All documents, communications, and analyses reflecting C&H's assessment of DOJ's litigation posture, Dunmore's defense theories, declination strategy, plea negotiation parameters, trial preparation materials, and any other information related to the defense of Dunmore in this matter are protected by the work product doctrine and the attorney-client privilege. These materials represent the core of C&H's adversarial preparation and, as opinion work product, are entitled to the highest degree of protection.

C. Approval Process for Disclosures

No member of the C&H engagement team may disclose information that is potentially protected by the attorney-client privilege or the work product doctrine to DOJ, the FBI, OFAC, or any other government agency without first completing the following approval process.

Step 1: Written Request. Any team member who proposes to disclose potentially privileged or work-product-protected information must prepare a written request (which may be in the form of an e-mail) identifying: (a) the specific information proposed for disclosure, described with sufficient particularity to permit meaningful evaluation; (b) the source of the information (e.g., witness interview, internal document, forensic report, attorney analysis); (c) the privilege or protection at issue (attorney-client privilege, fact work product, opinion work product, or common interest privilege); (d) the proposed recipient (specifying the individual government personnel); and (e) the reason for the proposed disclosure, including the cooperation credit or other benefit anticipated.

Step 2: Responsible Partner Approval. Victoria Chambers, as Responsible Partner, must approve all proposed disclosures. For significant or novel waiver decisions — including any decision that could establish a precedent for future disclosures, any disclosure involving information derived from witness interviews of senior management, and any disclosure of information that overlaps with materials shared under the JD/CIA — Howard Quinn, as Billing Partner, must also approve the disclosure. Approval must be documented in writing (e-mail is sufficient) and retained in the matter file.

Step 3: Client Consent. Marcus Wellbourne, General Counsel of Dunmore, must provide client consent in writing (e-mail is sufficient) before any selective waiver is effectuated. The privilege belongs to the client, and Dunmore alone has the authority to waive it. C&H may recommend waiver and may advise on the risks and benefits, but the ultimate decision rests with the client. The written consent should specifically identify the information to be disclosed and confirm that Dunmore consents to the selective waiver for the limited purpose of disclosure to DOJ (or OFAC, as applicable).

Step 4: Disclosure Log Entry. Following each approved disclosure, Elena Vasquez, Paralegal Manager, must create a contemporaneous entry in the Disclosure Log (described in Section X.B below), recording: (a) the date of the disclosure; (b) a description of the information disclosed; (c) the recipient (identifying the specific government personnel); (d) the approval chain (identifying each person who approved the disclosure and the date of approval); and (e) the basis for the determination that the disclosure does not create an unintended broader waiver of privilege.

D. Form and Manner of Disclosures to DOJ

The form and manner in which disclosures are made to DOJ is critical to the preservation of the selective waiver. The following requirements apply to all disclosures:

Oral Proffers. All oral proffers to AUSA Meredith Calloway, Trial Attorneys Samuel Kovacs and Diana Pressman, and FBI Special Agent Paul Reinhardt must be preceded by an oral caveat, delivered on the record at the outset of each session, substantially as follows:

"Dunmore Energy Holdings Ltd. makes this voluntary disclosure pursuant to its selective waiver of attorney-client privilege and work product protection for the limited purpose of cooperation with the Department of Justice. This disclosure is intended to share factual information with the Department and does not constitute a general waiver of any privilege or protection as to any other person, entity, or proceeding. Dunmore reserves all rights to assert the attorney-client privilege, the work product doctrine, and any other applicable protections in any other context."

The caveat should be delivered at the beginning of each proffer session, even if the same caveat was delivered at prior sessions. The C&H attorney conducting the proffer should note the delivery of the caveat in his or her contemporaneous notes of the session.

Written Submissions. All written submissions to DOJ, including proffer letters, white papers, factual summaries, investigation reports, and any other written documents provided to the government, must include the following header legend on the first page and, to the extent practicable, on each subsequent page:

CONFIDENTIAL — SUBJECT TO SELECTIVE WAIVER DISCLOSURE TO THE DEPARTMENT OF JUSTICE DOES NOT CONSTITUTE A WAIVER OF ATTORNEY-CLIENT PRIVILEGE OR WORK PRODUCT PROTECTION AS TO ANY OTHER PERSON OR ENTITY

The initial proffer letter delivered to AUSA Calloway on July 15, 2022, included this legend. All supplemental proffers, whether oral or written, must continue to include the appropriate caveats and legends.

Separate Filing and Correspondence. All DOJ-related correspondence — including submissions, proffer materials, cover letters, and responsive communications from DOJ — must be maintained in a separate, clearly labeled subfolder within the master matter file for Matter No. 1016-00009. The subfolder is designated "Materials Disclosed to DOJ" and is maintained by Elena Vasquez. No materials from this subfolder may be shared with any party other than the C&H engagement team and Dunmore's General Counsel without a separate waiver determination.

E. Consideration of FRE 502(d) Protective Order

It is our strong recommendation that C&H seek a protective order pursuant to Federal Rule of Evidence 502(d) from the U.S. District Court for the District of Columbia — the court that issued grand jury subpoena GJ No. 22-418 — providing that disclosure of privileged or work-product-protected materials to DOJ in connection with the grand jury proceedings and the broader DOJ investigation does not constitute a waiver of the attorney-client privilege or work product protection in any federal or state proceeding.

A FRE 502(d) order would provide the strongest available legal protection for Dunmore's selective waiver position. Unlike the selective waiver doctrine, which is subject to the circuit split described in Section III.A, a FRE 502(d) order is binding on all courts — federal and state — and would effectively moot any argument that Dunmore's cooperation with DOJ resulted in a broader waiver. The Advisory Committee Notes to Rule 502 expressly contemplate that 502(d) orders will be used to facilitate government investigations and reduce the risk of inadvertent or selective waiver claims.

Jasmine Thornton will prepare a draft 502(d) order for review by Victoria Chambers. Once approved internally, the draft order will be submitted to AUSA Calloway for discussion. It is anticipated that DOJ will not oppose such an order, as DOJ has a strong institutional interest in encouraging voluntary cooperation and recognizes that privilege waiver concerns can deter cooperation. However, in the event that DOJ is unwilling to support a court order or that the court declines to enter one, an alternative approach would be to negotiate a written confidentiality agreement with DOJ memorializing the parties' understanding that Dunmore's disclosures are made on a selective waiver basis and that DOJ will not contend, in any proceeding, that the disclosures constituted a waiver of privilege as to other parties. While such an agreement would not have the binding legal effect of a 502(d) order, it would serve as evidence of the parties' intent and could support a selective waiver argument before a court.

V. Protocol for Selective Waiver to OFAC

A. Anticipated OFAC Voluntary Self-Disclosure

Dunmore is evaluating, and ultimately intends to submit, a voluntary self-disclosure to OFAC regarding apparent violations of OFAC-administered sanctions programs. The VSD was ultimately filed on June 1, 2023; however, as of the date of this memorandum, the decision to file has not yet been finalized and the VSD is in the early stages of preparation. The same selective waiver principles set forth in Sections III and IV apply with equal force to the OFAC VSD.

The OFAC VSD will include factual descriptions of apparent violations involving: (i) the crude oil swap transactions involving Petronova Trading FZE and Zenith Petroleum DMCC, to the extent these transactions constituted dealings with the property or interests in property of Volkhov Industrial Group JSC (a Directive 2 entity and, subsequently, an SDN) in apparent violation of OFAC's Ukraine-/Russia-Related Sanctions Regulations; and (ii) any additional apparent violations identified during the course of the internal investigation. The VSD will be structured to provide comprehensive factual information while preserving the attorney-client privilege and work product protections in accordance with this protocol.

Coordination between DOJ disclosures and OFAC disclosures is essential. The factual information provided to each agency must be consistent — inconsistencies could undermine Dunmore's credibility and cooperation posture with both agencies. At the same time, the scope and timing of disclosures to each agency may differ: DOJ disclosures are made in the context of a criminal investigation with potential felony charges, while OFAC disclosures are made in the context of a civil/administrative enforcement framework. The legal consequences of waiver may also differ between the two contexts, although the practical risks (third-party discoverability) are the same.

B. OFAC-Specific Disclosure Guidelines

The following guidelines supplement the general protocol set forth in Section IV and apply specifically to disclosures made to OFAC:

Selective Waiver Legend. All written submissions to OFAC, including the VSD itself, initial notification, supplemental filings, and any correspondence, must include the same selective waiver legend specified in Section IV.D for DOJ submissions. Oral communications with OFAC personnel must be preceded by the same oral caveat.

Primary Point of Contact. All communications with OFAC, including communications with OFAC Compliance Analyst Erin Matsuda, are to be handled by Conrad Reeves, Senior Counsel, who serves as the primary point of contact with OFAC. Conrad must obtain prior approval from Victoria Chambers before making any substantive disclosure to OFAC, in accordance with the approval process described in Section IV.C. Routine procedural communications (e.g., scheduling, confirmation of receipt) do not require prior approval but should be documented.

Reconciliation Log. Because the factual information provided to OFAC may overlap substantially with the factual information provided to DOJ, a reconciliation log must be maintained tracking what information has been disclosed to each agency. This log will be maintained by Elena Vasquez in coordination with Jasmine Thornton and Conrad Reeves. The purpose of the reconciliation log is threefold: (i) to ensure consistency between DOJ and OFAC disclosures; (ii) to avoid disclosing to OFAC any information that has not been approved for disclosure under the selective waiver protocol; and (iii) to create a contemporaneous record that will support Dunmore's position in any future waiver dispute.

Grand Jury Secrecy and OFAC Dissemination. An important distinction between DOJ and OFAC must be noted. Information provided to DOJ in the grand jury context is subject to grand jury secrecy requirements under Federal Rule of Criminal Procedure 6(e), which limits DOJ's ability to disseminate such information to third parties. OFAC, by contrast, is not subject to the same secrecy constraints. Information disclosed to OFAC may, in theory, be more readily disseminated — whether to other Treasury Department components, other federal agencies, or in the context of administrative proceedings that may become part of the public record. This difference in dissemination risk must be factored into the waiver calculus when determining what information to disclose to OFAC. In general, information disclosed to OFAC should be limited to what is necessary for the VSD and should not include any information beyond what has already been approved for disclosure to DOJ, unless a separate determination is made that the additional disclosure is warranted.

VI. Protocol Regarding Individual Counsel

A. Information-Sharing Limitations

The involvement of individual counsel for key Dunmore employees creates significant privilege complexities. The following information-sharing limitations apply:

Gerald Fisk. Fisk is represented by Catherine Blackthorn of Blackthorn & Associates LLP, located at 700 Louisiana Street, Suite 4300, Houston, Texas 77002. Potential adverse interests between Fisk and Dunmore have been identified based on preliminary investigation findings, including Fisk's role in originating several of the transactions at issue and questions regarding the extent of his knowledge of Volkhov's beneficial ownership of Petronova. No C&H privileged analysis, investigation memoranda, witness interview summaries, or other work product may be shared with Blackthorn or with Fisk (in his personal capacity, as distinguished from his capacity as a Dunmore employee subject to corporate direction). Communications with Fisk in his capacity as a Dunmore employee for purposes of the internal investigation remain subject to Dunmore's corporate privilege, as established by the Upjohn warnings delivered at the outset of each interview.

Derek Hargrave. Hargrave is represented by James Overstreet of Overstreet & McClain PLLC, located at 2200 Ross Avenue, Suite 3600, Dallas, Texas 75201. Hargrave was placed on administrative leave effective July 1, 2022, following C&H's preliminary assessment that Hargrave may have had direct involvement in the structuring of payments through Crescent Commercial Bank PJSC and may have been aware of Volkhov's beneficial interest in Petronova. No C&H privileged analysis may be shared with Overstreet. Additionally, Hargrave's personal counsel may assert individual privilege over certain of Hargrave's communications — particularly communications with personal counsel and personal notes or documents created in contemplation of personal legal exposure. To the extent such individually privileged materials are identified during the document review process, they must be preserved and logged on the privilege log separately from materials subject to Dunmore's corporate privilege. C&H should not review or disclose Hargrave's individually privileged materials without consultation with Jasmine Thornton and, if necessary, Victoria Chambers.

Natasha Sorokin. Sorokin is anticipated to retain Philip Keane of Wexford Keane LLP, located at 2000 K Street NW, Suite 650, Washington, D.C. 20006, although formal retention has not yet been confirmed as of this memorandum date. Sorokin was placed on administrative leave effective May 16, 2022, following the discovery of evidence suggesting that Sorokin may have failed to implement adequate sanctions screening procedures and may have disregarded compliance red flags. The same information-sharing restrictions applicable to Fisk and Hargrave apply to Sorokin. Upon confirmation of Keane's retention, the team should promptly establish appropriate information barriers.

Indemnification and Advancement. Dunmore's indemnification and advancement obligations to its officers and directors — which were analyzed in a separate memorandum prepared by Howard Quinn dated May 5, 2022 — do not create a common legal interest between Dunmore and the individual employees' personal counsel. The obligation to advance defense costs is a contractual and statutory duty; it does not imply an alignment of legal interests sufficient to support a common interest privilege. Accordingly, Dunmore's indemnification and advancement obligations do not justify sharing privileged investigation materials with individual counsel.

B. Upjohn Warning Compliance

All witness interviews conducted by C&H in connection with the internal investigation are subject to the Witness Interview Protocol & Upjohn Warning Script dated April 18, 2022, which was prepared by Jasmine Thornton and approved by Victoria Chambers. In accordance with th

MEMORANDUM
PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
TO: Victoria Chambers, Responsible Partner Howard Quinn, Billing Partner Conrad Reeves, Senior Counsel Jasmine Thornton, Lead Associate Liam Donahue, Working Associate Amara Osei, Associate Nicholas Ferreira, Associate
FROM: Victoria Chambers, Partner, and Jasmine Thornton, Associate — White Collar & Investigations Group, Calderwood & Harkness LLP
DATE: July 1, 2022
RE: Protocol for Selective Waiver of Attorney-Client Privilege and Work Product Protections in Connection with Disclosures to the U.S. Department of Justice and OFAC — Dunmore Energy Holdings Ltd.
MATTER NO.: 1016-00009
CLIENT: Dunmore Energy Holdings Ltd. ("Dunmore" or "DEH")
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I. Purpose and Scope of this Memorandum
This memorandum establishes the firm's internal protocol and binding guidelines governing the selective waiver of attorney-client privilege and attorney work product protections in connection with Calderwood & Harkness LLP's ("C&H" or the "Firm") representation of Dunmore Energy Holdings Ltd. ("Dunmore" or "DEH") in the inquiry opened on April 19, 2022, by the U.S. Department of Justice, National Security Division, Counterintelligence and Export Control Section ("DOJ-NSD" or "DOJ"), and any related proceedings initiated by the Office of Foreign Assets Control ("OFAC"), U.S. Department of the Treasury.
This protocol applies to all disclosures — whether oral, written, electronic, or in any other form — made by C&H attorneys, staff, retained consultants, or Dunmore personnel at C&H's direction to (a) the DOJ, including the National Security Division, Counterintelligence and Export Control Section; (b) OFAC, including any personnel within the Office of Compliance and Enforcement; and (c) the Federal Bureau of Investigation ("FBI"), to the extent the FBI is acting in coordination with DOJ-NSD in connection with this matter.
The lead DOJ prosecutors assigned to the Dunmore matter are Assistant United States Attorney Meredith Calloway, Trial Attorney Samuel Kovacs, and Trial Attorney Diana Pressman. The FBI Case Agent assigned to the investigation is Special Agent Paul Reinhardt. The OFAC Compliance Analyst who has been designated as the primary contact for any voluntary self-disclosure is Erin Matsuda.
The government inquiry was initiated through the service of grand jury subpoena GJ No. 22-418, issued by the U.S. District Court for the District of Columbia (Grand Jury 22-2) on April 19, 2022. The subpoena was served on Dunmore's registered agent in the United States on the same date. C&H's engagement in this matter, and the factual and legal circumstances giving rise to it, are described in greater detail in Section II below.
This memorandum is itself protected by the attorney-client privilege and the work product doctrine. Distribution is limited to the C&H engagement team members listed above. No copies of this memorandum — whether in hard copy or electronic form — are to be disseminated outside of the listed recipients without the express prior written approval of Victoria Chambers. This protocol may be shared, in whole or in part, with Dunmore General Counsel Marcus Wellbourne and, subject to the terms and conditions of the Joint Defense / Common Interest Agreement dated April 25, 2022, with Harwood & Pennington LLP (Arthur Pennington III, lead counsel to Greystone Capital Partners Fund IV, L.P.) and the designated legal representative of Thornbury Infrastructure Fund II, L.P., as applicable. Any such sharing must be approved in advance by Victoria Chambers and documented in the disclosure log maintained pursuant to Section X of this memorandum.
The purpose of this protocol is threefold: first, to ensure that Dunmore is able to cooperate fully and meaningfully with the government in a manner that maximizes cooperation credit under applicable DOJ and OFAC frameworks; second, to preserve the attorney-client privilege and work product protections as to all third parties other than the DOJ and OFAC; and third, to provide clear, administrable guidelines to the C&H engagement team so that waiver decisions are made deliberately, with appropriate authorization, and with a full understanding of their legal consequences.
II. Background
A. The Engagement
Calderwood & Harkness LLP was retained by Dunmore Energy Holdings Ltd. on April 14, 2022. The engagement was precipitated by events that unfolded in the preceding days. On April 11, 2022, Gerald Fisk, Senior Vice President of Trading Operations at Dunmore Trading International Ltd. (the Dubai-based trading subsidiary), identified potential historical exposure to Volkhov Industrial Group JSC ("Volkhov") through certain transactions involving Petronova Trading FZE ("Petronova"), a free zone entity registered in the United Arab Emirates. Fisk reported his findings to Dunmore's General Counsel, Marcus Wellbourne, on the same date. Wellbourne, after an initial assessment of the nature and potential severity of the exposure, promptly engaged C&H's White Collar & Investigations Group.
The scope of C&H's engagement encompasses the following: (i) conducting a comprehensive internal investigation into Dunmore's historical transactions involving Petronova, Zenith Petroleum DMCC ("Zenith Petroleum"), Caspian Logistik GmbH ("Caspian Logistik"), and any other entities that may have served as intermediaries or fronts for Volkhov Industrial Group JSC; (ii) responding to all DOJ subpoenas, document requests, and other process; (iii) advising Dunmore on the remediation of compliance deficiencies in its sanctions screening, export controls, and anti-money-laundering programs; and (iv) defending Dunmore against potential prosecution, administrative enforcement, and related proceedings.
Dunmore Energy Holdings Ltd. is a Cayman Islands exempted company (registration no. MC-334821), with its operational headquarters located at 1200 McKinney Street, Suite 3400, Houston, Texas 77010. The company is a diversified energy holding company with upstream exploration and production operations, midstream infrastructure, energy trading, and renewable energy development activities across multiple continents.
The following key subsidiaries are involved in the matters under investigation and are therefore within the scope of this engagement:
• Dunmore Trading International Ltd. — Dubai International Financial Centre, DIFC License No. CL-4827. This entity conducted the crude oil swap transactions that are at the center of the DOJ inquiry.
• Dunmore upstream Americas LLC — Organized under the laws of the State of Delaware, EIN 84-2937561. This entity is the primary U.S. operating subsidiary and the entity through which Dunmore maintains its U.S. nexus for jurisdictional purposes.
• Dunmore Renewables GmbH — Hamburg, Germany. This entity is relevant due to its engagement of Caspian Logistik GmbH for certain logistics and procurement services.
• Dunmore Exploration West Africa Ltd. — Lagos, Nigeria. This entity's operations are relevant to certain ancillary transactions identified during the internal investigation.
B. The Government Inquiry
The DOJ National Security Division, Counterintelligence and Export Control Section, is investigating potential violations of United States sanctions laws and export control regulations by Dunmore and certain of its subsidiaries, officers, and employees. Specifically, the government's inquiry focuses on potential violations of the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. §§ 1701–1706, and the Export Control Reform Act ("ECRA"), 50 U.S.C. §§ 4801–4852, together with the Export Administration Regulations ("EAR"), 15 C.F.R. Parts 730–774.
Based on C&H's internal investigation to date, the conduct at issue falls into three principal categories:
1. Crude Oil Swap Transactions. Approximately $218.7 million in notional value across fourteen (14) separate crude oil swap transactions between Dunmore Trading International Ltd. and Petronova Trading FZE and Zenith Petroleum DMCC, executed between June 2020 and February 2022. The internal investigation has identified nine (9) of these fourteen transactions, representing approximately $156.3 million in notional value, as potentially tainted by reason of the ultimate beneficial interest of Volkhov Industrial Group JSC in Petronova and, indirectly, in Zenith Petroleum.
2. Oilfield Equipment Exports. Approximately $12.4 million in oilfield equipment and technology exports facilitated through Caspian Logistik GmbH between August 2020 and January 2022. These transactions involved dual-use items potentially subject to the EAR and may have resulted in the re-export of U.S.-origin goods, technology, or software to Volkhov-controlled entities in the Russian Federation without the required licenses from the Bureau of Industry and Security.
3. Payment Structuring. Approximately $34.2 million in aggregate funds transfers across one hundred twenty-seven (127) separate transactions through Crescent Commercial Bank PJSC (a UAE-based financial institution) between March 2020 and March 2022. The structuring of payments through Crescent Commercial Bank appears to have been designed to avoid triggering sanctions screening filters at U.S. correspondent banks by routing payments through non-U.S. intermediary accounts.
The sanctions designations relevant to this matter are as follows. Volkhov Industrial Group JSC was initially designated under OFAC Directive 2 of Executive Order 13662 (Sectoral Sanctions Identifications List) on November 15, 2019, which imposed restrictions on debt and equity financing. Subsequently, Volkhov was added to OFAC's Specially Designated Nationals and blocked Persons List ("SDN List") under Executive Order 14024 on April 6, 2022, subjecting Volkhov to full blocking sanctions. The timing of these designations — and, in particular, whether Dunmore personnel had actual or constructive knowledge of Volkhov's beneficial ownership of Petronova and Zenith Petroleum at the time the earlier transactions were executed — is a central factual issue in the investigation.
C&H conducted an initial proffer to AUSA Calloway on July 15, 2022, at the DOJ Main Justice Building in Washington, D.C. The proffer was oral, preceded by the selective waiver caveats described in Section IV.D of this memorandum, and addressed the factual scope of Dunmore's internal investigation findings to date. A supplemental proffer is anticipated following completion of additional witness interviews and forensic analysis.
The e-discovery effort associated with this matter is substantial. As of the date of this memorandum, C&H has collected 2,347,812 documents from custodians, shared drives, and other data sources across six jurisdictions: the Cayman Islands, the United Arab Emirates, the United States, Germany, Nigeria, and the United Kingdom. Nexagen Analytics Inc. ("Nexagen"), a third-party e-discovery and data analytics provider, has been retained under Project No. NX-DEH-2204 for document processing, hosting, and technology-assisted review ("TAR"). Brian Cavanaugh serves as the Nexagen project manager, and Thomas Bradshaw (C&H Senior Paralegal, e-discovery Lead) coordinates directly with Nexagen on all processing and review workflow matters. As of the date of this memorandum, document review is ongoing, with the first production to DOJ anticipated for November 1, 2022. Based on preliminary privilege screening, C&H anticipates that approximately 12,847 documents will be withheld from production on the basis of attorney-client privilege and/or the work product doctrine.
C. Related Agreements
Joint Defense / Common Interest Agreement. On April 25, 2022, Dunmore, Greystone Capital Partners Fund IV, L.P. ("Greystone"), and Thornbury Infrastructure Fund II, L.P. ("Thornbury") entered into a Joint Defense / Common Interest Agreement (the "JD/CIA"). Greystone holds a 62.5% equity interest in Dunmore and is represented by outside counsel Harwood & Pennington LLP, with Arthur Pennington III serving as lead partner. Thornbury holds a 15% equity interest in Dunmore; its managing director is Helen Cresswell. The JD/CIA establishes a common legal interest among the parties with respect to the DOJ investigation and any related government or private proceedings, and provides that privileged communications shared among the parties pursuant to the agreement retain their privileged character. The implications of the JD/CIA for the selective waiver protocol are discussed in Section VII below.
Individual Counsel Arrangements. Several individual Dunmore officers and employees have retained, or are expected to retain, separate personal counsel in connection with the government inquiry. The following arrangements have been established or are anticipated:
• Gerald Fisk, Senior Vice President, Trading Operations, Dunmore Trading International Ltd. Personal counsel: Catherine Blackthorn, Blackthorn & Associates LLP, 700 Louisiana Street, Suite 4300, Houston, Texas 77002. Potential adverse interests between Fisk and Dunmore have been identified based on preliminary investigation findings. No privileged investigation materials are to be shared with Blackthorn.
• Derek Hargrave, Managing Director, Energy Trading, Dunmore Trading International Ltd. Personal counsel: James Overstreet, Overstreet & McClain PLLC, 2200 Ross Avenue, Suite 3600, Dallas, Texas 75201. Hargrave was placed on administrative leave effective July 1, 2022, following C&H's preliminary determination that Hargrave may have had direct knowledge of and involvement in the structuring of transactions through Crescent Commercial Bank. No privileged investigation materials are to be shared with Overstreet. Hargrave's personal counsel may assert individual privilege over certain of Hargrave's communications, and such communications must be identified and preserved on the privilege log.
• Natasha Sorokin, Director of International Compliance, Dunmore Energy Holdings Ltd. Personal counsel: Philip Keane, Wexford Keane LLP, 2000 K Street NW, Suite 650, Washington, D.C. 20006 (anticipated to enter an appearance; not yet formally retained as of this memorandum date). Sorokin was placed on administrative leave effective May 16, 2022, following the discovery of evidence suggesting potential failures in Dunmore's sanctions screening program that may be attributable to Sorokin's oversight responsibilities. The same information-sharing restrictions applicable to Fisk and Hargrave apply to Sorokin.
The information-sharing limitations applicable to individual counsel are discussed in greater detail in Section VI of this memorandum.
III. Legal Framework Governing Selective Waiver
The selective waiver doctrine presents a complex and, in significant respects, unsettled area of federal law. This section provides the legal framework that informs the protocol set forth in Sections IV through IX below. All team members should be familiar with this framework, as it supplies the legal rationale for the waiver decisions contemplated by this protocol and identifies the risks that the protocol is designed to mitigate.
A. Attorney-Client Privilege
The attorney-client privilege protects from disclosure confidential communications made between a client and the client's attorney for the purpose of seeking or providing legal advice. The privilege belongs to the client and may be waived only by the client or with the client's consent. In the corporate context, the privilege extends to communications between attorneys and officers, directors, and employees of the corporate client acting within the scope of their duties and at the direction of corporate counsel. See Upjohn Co. v. United States, 449 U.S. 383 (1981).
The general rule is well-established: voluntary disclosure of a privileged communication to a third party waives the attorney-client privilege. This is because the privilege protects the confidentiality of the communication; once confidentiality is destroyed through voluntary disclosure, the rationale for the privilege ceases to exist. However, the application of this general rule to disclosures made to government agencies in the context of regulatory investigations and cooperation has generated significant judicial disagreement.
The "selective waiver" doctrine holds that a party may disclose privileged communications to a government agency — such as the DOJ or OFAC — without waiving the privilege as to other third parties. Under this doctrine, disclosure to the government is treated as a limited waiver that does not destroy the confidentiality of the communication as to the rest of the world. The rationale is that encouraging voluntary cooperation with government agencies serves important public interests, and parties would be deterred from cooperating if doing so resulted in a wholesale waiver of privilege that could be exploited by private litigants, insurers, or other adversaries.
The selective waiver doctrine, however, is not universally recognized across the federal circuits. The Eighth Circuit adopted the doctrine in Diversified Industries, Inc. v. Meredith, 572 F.2d 596, 611 (8th Cir. 1977) (en banc), holding that disclosure of privileged materials to the SEC did not waive the privilege in a subsequent civil action. However, the majority of circuits that have addressed the issue have rejected or significantly limited the doctrine. The D.C. Circuit — which is of direct relevance here because grand jury subpoena GJ No. 22-418 was issued by the U.S. District Court for the District of Columbia — has not squarely addressed the selective waiver doctrine in a published opinion. The D.C. Circuit's precedent on waiver more generally, however, suggests a fact-specific inquiry into whether the disclosure was consistent with the purpose of the privilege and whether appropriate steps were taken to preserve confidentiality. See In re Sealed Case, 877 F.2d 976 (D.C. Cir. 1989).
Other circuits have reached varying conclusions. The Second Circuit rejected selective waiver in In re Steinhardt Partners, L.P., 9 F.3d 230 (2d Cir. 1993), while suggesting that a confidentiality agreement between the disclosing party and the government might support a different result. The Third Circuit rejected selective waiver in Westinghouse Electric Corp. v. Republic of the Philippines, 951 F.2d 1414 (3d Cir. 1991). The Sixth Circuit also rejected the doctrine in In re Columbia/Crowne Albany Partners LLC Billing Practices Litigation, 293 F.3d 289 (6th Cir. 2002). The Fourth Circuit found no selective waiver in In re Martin Marietta Corp., 856 F.2d 619 (4th Cir. 1988).
This circuit split creates significant uncertainty. While C&H's protocol is designed to maximize the likelihood that selective waiver will be upheld, the team should be aware that there is no guarantee that a court — whether in the D.C. Circuit or in another jurisdiction where third-party litigation may be brought — will recognize the selective waiver doctrine. This uncertainty underscores the importance of the additional protective measures discussed below, including the pursuit of a FRE 502(d) order.
Federal Rule of Evidence 502, enacted in 2008, provides a statutory framework that addresses certain waiver issues. FRE 502(a) limits the scope of waiver resulting from a disclosure in a federal proceeding, providing that the waiver extends to undisclosed communications or information only if the disclosed and undisclosed materials concern the same subject matter and the disclosed and undisclosed materials "ought in fairness" to be considered together. FRE 502(b) provides that disclosure made in a federal proceeding does not operate as a waiver if the disclosure was inadvertent, the holder took reasonable steps to prevent disclosure, and the holder promptly took reasonable steps to rectify the error. Most significantly for our purposes, FRE 502(d) provides that a federal court may order that the privilege or protection is not waived by disclosure connected with the litigation pending before the court, and that such an order is enforceable against all persons or entities in any federal or state proceeding. A FRE 502(d) order, if obtained, would provide a powerful safeguard against any argument that Dunmore's disclosures to DOJ constituted a broader waiver.
It is our strong recommendation that C&H seek a FRE 502(d) order from the U.S. District Court for the District of Columbia, as discussed in greater detail in Section IV.E below.
B. Work Product Doctrine
The work product doctrine, first recognized in Hickman v. Taylor, 329 U.S. 495 (1947), and codified in Federal Rule of Civil Procedure 26(b)(3), protects from discovery documents and tangible things prepared in anticipation of litigation or for trial by or for a party or its representative. The work product doctrine serves a distinct purpose from the attorney-client privilege: it protects the adversary process by ensuring that one party does not benefit from the other party's litigation preparation efforts.
The work product doctrine provides two tiers of protection. "Fact" work product — materials reflecting factual information gathered in anticipation of litigation — is entitled to qualified protection. Such materials may be discovered upon a showing of substantial need and inability to obtain the substantial equivalent without undue hardship. "Opinion" work product — materials reflecting the mental impressions, conclusions, opinions, and legal theories of an attorney — is entitled to heightened, near-absolute protection. Courts have consistently held that opinion work product is virtually undiscoverable, and most courts hold that even a showing of substantial need and undue hardship cannot overcome the protection. See, e.g., Upjohn Co. v. United States, 449 U.S. at 401 (noting that disclosure of opinion work product would "Discourage the communication deemed essential to counsel's effective representation").
The work product doctrine is directly relevant to this protocol because many of the materials generated during the internal investigation — including investigation memoranda, witness interview summaries, legal analyses, and strategic assessments — constitute work product. The question of whether voluntary disclosure of work product to a government agency results in waiver as to third parties is analytically distinct from the corresponding question under the attorney-client privilege.
Courts have generally been more receptive to the argument that work product protection survives disclosure to the government than they have been with respect to the attorney-client privilege. The rationale is that the work product doctrine protects against disclosure to adversaries, and the government, in the cooperation context, is not necessarily an adversary. See, e.g., In re Steinhardt Partners, L.P., 9 F.3d at 236 (suggesting that work product protection may survive disclosure to a government agency where the disclosure does not substantially increase the likelihood that an adversary will obtain the materials). This distinction is particularly strong with respect to opinion work product, which reflects the mental processes of counsel and serves the most fundamental purposes of the adversary system.
Accordingly, even in circuits that have rejected the selective waiver doctrine as applied to the attorney-client privilege, there may be a stronger basis for arguing that work product protection survives disclosure to DOJ or OFAC — particularly for opinion work product. Nevertheless, the safest course is to avoid disclosing any work product to the government unless necessary, and to implement the procedural safeguards described in this protocol.
It is important to note that DOJ guidance explicitly states that the Department does not require waiver of the attorney-client privilege or the work product doctrine as a condition of receiving cooperation credit. The DOJ Corporate Enforcement Policy (as updated; the version in effect at the time of this memorandum is the prior iteration of the September 2022 update) provides that corporations may receive full cooperation credit by providing relevant facts to the Department without waiving privilege. The policy states: "To be clear, the Department does not require that companies waive attorney-client privilege or attorney work product protections in order to receive credit for cooperation." This is consistent with the Filip Memorandum (August 28, 2008) and the Yates Memorandum (September 9, 2015, as subsequently modified), both of which emphasize the importance of corporations providing relevant facts without requiring privilege waivers. The DOJ Evaluation of Corporate Compliance Programs, which is also relevant to Dunmore's cooperation posture and will be referenced in connection with remediation efforts, similarly does not predicate credit on privilege waiver.
The practical implication is that Dunmore should be able to achieve meaningful cooperation credit by disclosing factual information — including factual proffers, non-privileged business records, and factual findings from the forensic analysis — without disclosing opinion work product or privileged attorney-client communications. This is the foundational principle underlying the protocol set forth in Sections IV and V below.
C. OFAC Voluntary Self-Disclosure Considerations
In addition to the DOJ investigation, Dunmore is evaluating the submission of a voluntary self-disclosure ("VSD") to OFAC in connection with potential apparent violations of OFAC-administered sanctions programs. The VSD was ultimately filed on June 1, 2023, but as of the date of this memorandum, the decision to file has not yet been finalized. The selective waiver protocol must therefore account for both DOJ and OFAC disclosures from the outset.
OFAC's Economic Sanctions Enforcement Guidelines (31 C.F.R. Part 501, Appendix A) identify voluntary self-disclosure as a significant mitigating factor in the determination of enforcement responses. A party that submits a VSD and is found to have committed an apparent violation may receive a substantially reduced civil monetary penalty — potentially as much as a 50% reduction from the base penalty amount — as compared to a party that does not self-disclose. OFAC has also indicated that it will give credit for cooperation that is timely, thorough, and demonstrates good faith.
Critically, OFAC does not require waiver of the attorney-client privilege or the work product doctrine as a condition of accepting a VSD or granting cooperation credit. The same factual-disclosure approach that applies to DOJ cooperation applies in the OFAC context: Dunmore can provide a comprehensive factual account of the apparent violations without disclosing privileged communications or attorney work product.
The OFAC sanctions programs at issue in this matter are: (i) Directive 2 under Executive Order 13662 of March 20, 2014 (as amended), which imposed sectoral sanctions on specified entities in the Russian financial services, energy, and defense sectors, implemented through 31 C.F.R. Part 589 (Ukraine-/Russia-Related Sanctions Regulations); and (ii) Executive Order 14024 of April 15, 2021, which authorized full blocking sanctions with respect to specified harmful foreign activities of the Government of the Russian Federation, also implemented under 31 C.F.R. Part 589.
The timing and coordination of disclosures to DOJ and OFAC present additional considerations. Factual information provided to one agency may be shared with the other, either through formal inter-agency coordination or informal channels. Accordingly, the selective waiver protocol must ensure consistency between DOJ and OFAC disclosures and must treat disclosures to each agency with the same degree of procedural rigor. The additional considerations specific to OFAC are addressed in Section V below.
D. Risks of Waiver
The consequences of an unintended or overbroad waiver of privilege or work product protection could be severe for Dunmore and its officers and directors. The following categories of risk must be considered in every waiver decision:
Third-Party Litigation Risk. If the selective waiver is not upheld and Dunmore's disclosures to DOJ or OFAC are deemed to constitute a general waiver of privilege, C&H's internal investigation materials — including witness interview memoranda, legal analyses, strategy documents, and privileged communications with Dunmore management — could become discoverable in civil litigation brought by counterparties, shareholders, or lenders. Meridian National Bank, N.A. ("Meridian"), which serves as administrative agent under Dunmore's $750 million revolving credit facility, may pursue claims against Dunmore in the event that the government investigation results in defaults or material adverse changes under the credit agreement. Gregory Stanhope, Managing Director at Meridian, has already made informal inquiries regarding the status of the investigation. Additionally, counterparties to the crude oil swap transactions and oilfield equipment contracts may assert claims for rescission, damages, or indemnification. Shareholder derivative actions or securities fraud class actions, while less likely given Dunmore's private ownership structure, cannot be ruled out entirely given the involvement of institutional investors such as Greystone and Thornbury.
D&O Insurance Implications. Dunmore maintains directors' and officers' liability insurance through Garrison Mutual Insurance Co. under policy number GM-DO-2021-08734, with a $50 million aggregate limit, a $10 million per-claim sublimit, and a $2.5 million per-claim retention. The claims adjuster assigned to the matter is Patricia Holbrook. Garrison Mutual is providing coverage for defense costs (but not for disgorgement, restitution, or penalties). In the course of evaluating claims and reserving rights, the insurer may request access to C&H's investigation materials. Disclosure of privileged materials to Garrison Mutual is a separate issue from selective waiver to DOJ/OFAC, and it is critical that any selective waiver to the government not be construed as an inadvertent waiver as to the insurer. If Garrison Mutual were to obtain privileged materials and subsequently share them — whether in the context of litigation over coverage, subrogation, or otherwise — the resulting waiver could be catastrophic. The protocol must therefore maintain strict separation between government disclosures and insurer communications.
Individual Defendant Exposure. Gerald Fisk, Derek Hargrave, and Natasha Sorokin are each represented by separate personal counsel, as described in Section II.C above. In the event that Dunmore's interests diverge further from the interests of these individuals — as appears increasingly likely with respect to Hargrave and Sorokin — selective waiver to DOJ of certain investigation findings could impact the individuals' defense strategies. Dunmore must retain the ability to assert privilege against individual counsel in the event of adversarial proceedings (e.g., indemnification disputes, cross-claims, or situations where individual counsel seek to compel production of Dunmore's investigation files). If the selective waiver to DOJ is deemed to be a general waiver, individual counsel could argue that the privileged materials are available to them as well. The Upjohn framework, which vests the privilege in the corporate client, supports Dunmore's position — but only if the selective waiver is properly structured and maintained.
Outside Auditor Considerations. Ashford & Whitmore LLP ("A&W"), Dunmore's independent outside auditors (engagement partner Kenneth Ashford), may request access to investigation materials in connection with their audit of Dunmore's consolidated financial statements for the fiscal year ending December 31, 2022. Auditors routinely request information regarding pending or threatened litigation and government investigations in order to assess internal controls over financial reporting, evaluate contingent liabilities, and satisfy their obligations under Public Company Accounting Oversight Board ("PCAOB") standards (to the extent applicable) and generally accepted auditing standards. Under the majority rule in U.S. courts, disclosure of privileged attorney-client communications to outside auditors constitutes a waiver of the privilege, because auditors are not within the scope of the attorney-client relationship and their interests are not aligned with those of the client in a manner that would support a common interest privilege. See, e.g., In re Northpoint Holdings Securities Litigation, 1993 WL 561125 (S.D.N.Y. 1993). Accordingly, the disclosure of investigation materials to A&W must be handled separately and with extreme caution. This issue is addressed in Section IX below.
IV. Protocol for Selective Waiver to DOJ
A. Categories of Information Eligible for Disclosure
The following categories of information may be disclosed to DOJ, subject to compliance with the approval process set forth in Section IV.C below. The overarching principle is that Dunmore may share facts with the government without waiving privilege, provided that the disclosures are structured to exclude attorney-client communications, opinion work product, and protected common interest materials.
1. Factual Proffers and Summaries. Oral and written factual summaries of C&H's investigation findings may be disclosed to DOJ. These proffers should describe the relevant facts in a straightforward, narrative manner without attribution to privileged sources and without inclusion of legal analysis, mental impressions, or strategic assessments. Factual proffers may address, among other things:
(a) the fourteen (14) crude oil swap transactions between Dunmore Trading International Ltd. and Petronova Trading FZE and Zenith Petroleum DMCC (approximately $218.7 million aggregate notional value);
(b) the nine (9) transactions within the foregoing group that C&H has identified as potentially tainted by Volkhov's beneficial interest (approximately $156.3 million notional value), including transaction dates, counterparties, volumes, pricing terms, settlement mechanisms, and the factual basis for the determination that Volkhov held a beneficial interest;
(c) the oilfield equipment exports facilitated through Caspian Logistik GmbH (approximately $12.4 million), including descriptions of the goods exported, origin of the goods, shipping routes, end-use certifications (or the absence thereof), and the identity of ultimate consignees;
(d) the payment structuring through Crescent Commercial Bank PJSC (approximately $34.2 million across 127 transactions), including transaction amounts, dates, routing information, correspondent banking relationships, and the factual basis for the conclusion that the structuring was designed to avoid sanctions screening; and
(e) counterparty information regarding Petronova Trading FZE, Zenith Petroleum DMCC, Caspian Logistik GmbH, and Volkhov Industrial Group JSC, including corporate registration details, beneficial ownership information, and the relationships among these entities as established through the internal investigation.
2. Non-Privileged Business Records. Documents produced to DOJ in response to grand jury subpoena GJ No. 22-418 are non-privileged business records and their production does not raise waiver issues. These documents are assigned Bates numbers with the prefix DEH-DOJ (e.g., DEH-DOJ-000001). Production of these documents is mandatory under the subpoena and does not constitute a voluntary disclosure for purposes of the selective waiver analysis. However, the production must be carefully screened to ensure that no privileged documents are inadvertently produced. The privilege review workflow and quality control procedures are described in the Document Review Protocol dated May 15, 2022.
3. Factual Portions of Forensic Reports. Ridgeline Advisory Group LLC ("Ridgeline"), a forensic accounting and financial advisory firm, has been retained by C&H under Engagement No. RAG-2022-0319 (lead engagement partner: Dr. Margaret Liu, CPA, CFE) to conduct forensic analysis of Dunmore's transaction flows, payment patterns, and beneficial ownership structures. Ridgeline's engagement is structured as a consultant retained by counsel in anticipation of litigation, and its reports and communications with C&H are protected by the work product doctrine. However, the factual findings contained in Ridgeline's reports — including transaction flow charts, payment tracing analyses relating to Crescent Commercial Bank PJSC, and beneficial ownership diagrams — may be shared with DOJ as part of factual proffers, provided that:
(a) all sections of Ridgeline's reports that contain legal analysis, strategy recommendations, or the mental impressions and conclusions of C&H attorneys are redacted prior to disclosure;
(b) the disclosed factual findings are presented as Dunmore's own factual submissions, rather than as attorney work product or as a Ridgeline "report" in its entirety; and
(c) the disclosure is approved through the process described in Section IV.C.
4. Witness Interview Summaries (Factual Content Only). C&H has conducted, or plans to conduct, witness interviews of approximately forty-seven (47) individuals across three interview rounds: twenty-two (22) interviews in the first round (May–June 2022), fifteen (15) interviews in the second round (anticipated August–October 2022), and ten (10) interviews in the third round (anticipated November 2022–March 2023). Factual summaries derived from these interviews may be shared with DOJ as part of factual proffers, subject to the following conditions:
(a) only factual information obtained from the witnesses — i.e., the substance of what the witness said regarding events, transactions, knowledge, and communications — may be disclosed;
(b) all legal analysis, mental impressions of the interviewing attorneys, credibility assessments, and annotations reflecting C&H's litigation strategy must be separated from the factual content and withheld;
(c) factual summaries should be prepared as standalone documents that do not reference or incorporate the underlying interview memoranda (which are protected work product); and
(d) the disclosure is approved through the process described in Section IV.C.
5. Compliance Program Assessments. Factual descriptions of Dunmore's pre-existing sanctions compliance program, trade compliance controls, and the remediation measures being implemented may be shared with DOJ. The DOJ Evaluation of Corporate Compliance Programs expressly considers the adequacy of a company's compliance program as a factor in charging and sentencing decisions, and the provision of factual information about the compliance program is an important element of cooperation. However, C&H's legal analysis regarding the adequacy or inadequacy of the compliance program — including assessments of whether the program was "effective" within the meaning of the U.S. Sentencing Guidelines — constitutes opinion work product and must be withheld. Factual descriptions may include the organizational structure of the compliance function, the specific screening tools and databases used, the frequency of compliance training, the results of prior compliance audits, and the specific remediation steps being undertaken.
B. Categories of Information NOT Eligible for Disclosure
The following categories of information are not eligible for disclosure to DOJ under any circumstances without a separate, case-specific waiver determination approved through the process described in Section IV.C and a specific finding by Victoria Chambers that the disclosure is in Dunmore's interest notwithstanding the risks identified below.
1. Opinion Work Product. All internal memoranda, analyses, and other documents containing the legal analysis, mental impressions, conclusions, opinions, and strategy recommendations of C&H attorneys are absolutely protected and may not be disclosed to DOJ. This category includes, but is not limited to, the following:
(a) investigation plan memoranda, including the Investigation Plan and Work Stream Assignments dated April 18, 2022;
(b) the Sanctions Framework Analysis prepared by Conrad Reeves, dated April 27, 2022, which analyzes the application of E.O. 13662, E.O. 14024, and the Ukraine-/Russia-Related Sanctions Regulations to the transactions at issue;
(c) the Export Control Analysis prepared by Conrad Reeves, dated May 5, 2022, which analyzes the application of the EAR and ECRA to the oilfield equipment exports;
(d) the U.S. Person Analysis prepared by Jasmine Thornton, dated May 10, 2022, which analyzes whether the relevant Dunmore entities and employees qualify as "U.S. persons" under OFAC's regulatory framework and whether the transactions involved a sufficient U.S. nexus;
(e) individual culpability assessments for Derek Hargrave, Natasha Sorokin, Gerald Fisk, and other Dunmore personnel, which analyze the state of mind and potential criminal exposure of individual actors; and
(f) all other memoranda, e-mails, notes, and documents reflecting C&H attorneys' legal theories, strategic assessments, evaluation of evidence, or recommendations regarding the defense of this matter.
2. Attorney-Client Communications. All communications between C&H and Dunmore personnel — including, without limitation, CEO Callum Renshaw, General Counsel Marcus Wellbourne, CFO Sandra Whitfield, and Chief Compliance Officer Priya Nayar — that were made for the purpose of seeking or rendering legal advice are protected by the attorney-client privilege and may not be disclosed to DOJ. This includes oral communications, written correspondence, e-mail exchanges, text messages, video conference discussions, and any other form of communication between C&H and Dunmore personnel in their capacity as representatives of the corporate client.
3. Common Interest Communications. All communications shared among the parties to the Joint Defense / Common Interest Agreement dated April 25, 2022 — including communications between C&H and Harwood & Pennington LLP (counsel for Greystone Capital Partners Fund IV, L.P.) and communications involving Thornbury Infrastructure Fund II, L.P.'s legal representatives — are protected by the common interest privilege. These communications may not be disclosed to DOJ without the consent of all parties to the JD/CIA, as discussed in Section VII below.
4. Privilege Log Entries. The privilege log itself, prepared and maintained by Elena Vasquez and Thomas Bradshaw, and the substantive content of the approximately 12,847 documents anticipated to be withheld on privilege grounds, are protected and may not be disclosed to DOJ. The privilege log will be produced to DOJ in connection with document productions, as is customary, but the log entries themselves do not constitute a waiver of the underlying privilege. The specificity of the privilege log entries must be sufficient to sustain the privilege assertions but must not be so detailed as to reveal the substance of the privileged communications.
5. Litigation Strategy and Defense Planning. All documents, communications, and analyses reflecting C&H's assessment of DOJ's litigation posture, Dunmore's defense theories, declination strategy, plea negotiation parameters, trial preparation materials, and any other information related to the defense of Dunmore in this matter are protected by the work product doctrine and the attorney-client privilege. These materials represent the core of C&H's adversarial preparation and, as opinion work product, are entitled to the highest degree of protection.
C. Approval Process for Disclosures
No member of the C&H engagement team may disclose information that is potentially protected by the attorney-client privilege or the work product doctrine to DOJ, the FBI, OFAC, or any other government agency without first completing the following approval process.
Step 1: Written Request. Any team member who proposes to disclose potentially privileged or work-product-protected information must prepare a written request (which may be in the form of an e-mail) identifying: (a) the specific information proposed for disclosure, described with sufficient particularity to permit meaningful evaluation; (b) the source of the information (e.g., witness interview, internal document, forensic report, attorney analysis); (c) the privilege or protection at issue (attorney-client privilege, fact work product, opinion work product, or common interest privilege); (d) the proposed recipient (specifying the individual government personnel); and (e) the reason for the proposed disclosure, including the cooperation credit or other benefit anticipated.
Step 2: Responsible Partner Approval. Victoria Chambers, as Responsible Partner, must approve all proposed disclosures. For significant or novel waiver decisions — including any decision that could establish a precedent for future disclosures, any disclosure involving information derived from witness interviews of senior management, and any disclosure of information that overlaps with materials shared under the JD/CIA — Howard Quinn, as Billing Partner, must also approve the disclosure. Approval must be documented in writing (e-mail is sufficient) and retained in the matter file.
Step 3: Client Consent. Marcus Wellbourne, General Counsel of Dunmore, must provide client consent in writing (e-mail is sufficient) before any selective waiver is effectuated. The privilege belongs to the client, and Dunmore alone has the authority to waive it. C&H may recommend waiver and may advise on the risks and benefits, but the ultimate decision rests with the client. The written consent should specifically identify the information to be disclosed and confirm that Dunmore consents to the selective waiver for the limited purpose of disclosure to DOJ (or OFAC, as applicable).
Step 4: Disclosure Log Entry. Following each approved disclosure, Elena Vasquez, Paralegal Manager, must create a contemporaneous entry in the Disclosure Log (described in Section X.B below), recording: (a) the date of the disclosure; (b) a description of the information disclosed; (c) the recipient (identifying the specific government personnel); (d) the approval chain (identifying each person who approved the disclosure and the date of approval); and (e) the basis for the determination that the disclosure does not create an unintended broader waiver of privilege.
D. Form and Manner of Disclosures to DOJ
The form and manner in which disclosures are made to DOJ is critical to the preservation of the selective waiver. The following requirements apply to all disclosures:
Oral Proffers. All oral proffers to AUSA Meredith Calloway, Trial Attorneys Samuel Kovacs and Diana Pressman, and FBI Special Agent Paul Reinhardt must be preceded by an oral caveat, delivered on the record at the outset of each session, substantially as follows:
"Dunmore Energy Holdings Ltd. makes this voluntary disclosure pursuant to its selective waiver of attorney-client privilege and work product protection for the limited purpose of cooperation with the Department of Justice. This disclosure is intended to share factual information with the Department and does not constitute a general waiver of any privilege or protection as to any other person, entity, or proceeding. Dunmore reserves all rights to assert the attorney-client privilege, the work product doctrine, and any other applicable protections in any other context."
The caveat should be delivered at the beginning of each proffer session, even if the same caveat was delivered at prior sessions. The C&H attorney conducting the proffer should note the delivery of the caveat in his or her contemporaneous notes of the session.
Written Submissions. All written submissions to DOJ, including proffer letters, white papers, factual summaries, investigation reports, and any other written documents provided to the government, must include the following header legend on the first page and, to the extent practicable, on each subsequent page:
CONFIDENTIAL — SUBJECT TO SELECTIVE WAIVER DISCLOSURE TO THE DEPARTMENT OF JUSTICE DOES NOT CONSTITUTE A WAIVER OF ATTORNEY-CLIENT PRIVILEGE OR WORK PRODUCT PROTECTION AS TO ANY OTHER PERSON OR ENTITY
The initial proffer letter delivered to AUSA Calloway on July 15, 2022, included this legend. All supplemental proffers, whether oral or written, must continue to include the appropriate caveats and legends.
Separate Filing and Correspondence. All DOJ-related correspondence — including submissions, proffer materials, cover letters, and responsive communications from DOJ — must be maintained in a separate, clearly labeled subfolder within the master matter file for Matter No. 1016-00009. The subfolder is designated "Materials Disclosed to DOJ" and is maintained by Elena Vasquez. No materials from this subfolder may be shared with any party other than the C&H engagement team and Dunmore's General Counsel without a separate waiver determination.
E. Consideration of FRE 502(d) Protective Order
It is our strong recommendation that C&H seek a protective order pursuant to Federal Rule of Evidence 502(d) from the U.S. District Court for the District of Columbia — the court that issued grand jury subpoena GJ No. 22-418 — providing that disclosure of privileged or work-product-protected materials to DOJ in connection with the grand jury proceedings and the broader DOJ investigation does not constitute a waiver of the attorney-client privilege or work product protection in any federal or state proceeding.
A FRE 502(d) order would provide the strongest available legal protection for Dunmore's selective waiver position. Unlike the selective waiver doctrine, which is subject to the circuit split described in Section III.A, a FRE 502(d) order is binding on all courts — federal and state — and would effectively moot any argument that Dunmore's cooperation with DOJ resulted in a broader waiver. The Advisory Committee Notes to Rule 502 expressly contemplate that 502(d) orders will be used to facilitate government investigations and reduce the risk of inadvertent or selective waiver claims.
Jasmine Thornton will prepare a draft 502(d) order for review by Victoria Chambers. Once approved internally, the draft order will be submitted to AUSA Calloway for discussion. It is anticipated that DOJ will not oppose such an order, as DOJ has a strong institutional interest in encouraging voluntary cooperation and recognizes that privilege waiver concerns can deter cooperation. However, in the event that DOJ is unwilling to support a court order or that the court declines to enter one, an alternative approach would be to negotiate a written confidentiality agreement with DOJ memorializing the parties' understanding that Dunmore's disclosures are made on a selective waiver basis and that DOJ will not contend, in any proceeding, that the disclosures constituted a waiver of privilege as to other parties. While such an agreement would not have the binding legal effect of a 502(d) order, it would serve as evidence of the parties' intent and could support a selective waiver argument before a court.
V. Protocol for Selective Waiver to OFAC
A. Anticipated OFAC Voluntary Self-Disclosure
Dunmore is evaluating, and ultimately intends to submit, a voluntary self-disclosure to OFAC regarding apparent violations of OFAC-administered sanctions programs. The VSD was ultimately filed on June 1, 2023; however, as of the date of this memorandum, the decision to file has not yet been finalized and the VSD is in the early stages of preparation. The same selective waiver principles set forth in Sections III and IV apply with equal force to the OFAC VSD.
The OFAC VSD will include factual descriptions of apparent violations involving: (i) the crude oil swap transactions involving Petronova Trading FZE and Zenith Petroleum DMCC, to the extent these transactions constituted dealings with the property or interests in property of Volkhov Industrial Group JSC (a Directive 2 entity and, subsequently, an SDN) in apparent violation of OFAC's Ukraine-/Russia-Related Sanctions Regulations; and (ii) any additional apparent violations identified during the course of the internal investigation. The VSD will be structured to provide comprehensive factual information while preserving the attorney-client privilege and work product protections in accordance with this protocol.
Coordination between DOJ disclosures and OFAC disclosures is essential. The factual information provided to each agency must be consistent — inconsistencies could undermine Dunmore's credibility and cooperation posture with both agencies. At the same time, the scope and timing of disclosures to each agency may differ: DOJ disclosures are made in the context of a criminal investigation with potential felony charges, while OFAC disclosures are made in the context of a civil/administrative enforcement framework. The legal consequences of waiver may also differ between the two contexts, although the practical risks (third-party discoverability) are the same.
B. OFAC-Specific Disclosure Guidelines
The following guidelines supplement the general protocol set forth in Section IV and apply specifically to disclosures made to OFAC:
Selective Waiver Legend. All written submissions to OFAC, including the VSD itself, initial notification, supplemental filings, and any correspondence, must include the same selective waiver legend specified in Section IV.D for DOJ submissions. Oral communications with OFAC personnel must be preceded by the same oral caveat.
Primary Point of Contact. All communications with OFAC, including communications with OFAC Compliance Analyst Erin Matsuda, are to be handled by Conrad Reeves, Senior Counsel, who serves as the primary point of contact with OFAC. Conrad must obtain prior approval from Victoria Chambers before making any substantive disclosure to OFAC, in accordance with the approval process described in Section IV.C. Routine procedural communications (e.g., scheduling, confirmation of receipt) do not require prior approval but should be documented.
Reconciliation Log. Because the factual information provided to OFAC may overlap substantially with the factual information provided to DOJ, a reconciliation log must be maintained tracking what information has been disclosed to each agency. This log will be maintained by Elena Vasquez in coordination with Jasmine Thornton and Conrad Reeves. The purpose of the reconciliation log is threefold: (i) to ensure consistency between DOJ and OFAC disclosures; (ii) to avoid disclosing to OFAC any information that has not been approved for disclosure under the selective waiver protocol; and (iii) to create a contemporaneous record that will support Dunmore's position in any future waiver dispute.
Grand Jury Secrecy and OFAC Dissemination. An important distinction between DOJ and OFAC must be noted. Information provided to DOJ in the grand jury context is subject to grand jury secrecy requirements under Federal Rule of Criminal Procedure 6(e), which limits DOJ's ability to disseminate such information to third parties. OFAC, by contrast, is not subject to the same secrecy constraints. Information disclosed to OFAC may, in theory, be more readily disseminated — whether to other Treasury Department components, other federal agencies, or in the context of administrative proceedings that may become part of the public record. This difference in dissemination risk must be factored into the waiver calculus when determining what information to disclose to OFAC. In general, information disclosed to OFAC should be limited to what is necessary for the VSD and should not include any information beyond what has already been approved for disclosure to DOJ, unless a separate determination is made that the additional disclosure is warranted.
VI. Protocol Regarding Individual Counsel
A. Information-Sharing Limitations
The involvement of individual counsel for key Dunmore employees creates significant privilege complexities. The following information-sharing limitations apply:
Gerald Fisk. Fisk is represented by Catherine Blackthorn of Blackthorn & Associates LLP, located at 700 Louisiana Street, Suite 4300, Houston, Texas 77002. Potential adverse interests between Fisk and Dunmore have been identified based on preliminary investigation findings, including Fisk's role in originating several of the transactions at issue and questions regarding the extent of his knowledge of Volkhov's beneficial ownership of Petronova. No C&H privileged analysis, investigation memoranda, witness interview summaries, or other work product may be shared with Blackthorn or with Fisk (in his personal capacity, as distinguished from his capacity as a Dunmore employee subject to corporate direction). Communications with Fisk in his capacity as a Dunmore employee for purposes of the internal investigation remain subject to Dunmore's corporate privilege, as established by the Upjohn warnings delivered at the outset of each interview.
Derek Hargrave. Hargrave is represented by James Overstreet of Overstreet & McClain PLLC, located at 2200 Ross Avenue, Suite 3600, Dallas, Texas 75201. Hargrave was placed on administrative leave effective July 1, 2022, following C&H's preliminary assessment that Hargrave may have had direct involvement in the structuring of payments through Crescent Commercial Bank PJSC and may have been aware of Volkhov's beneficial interest in Petronova. No C&H privileged analysis may be shared with Overstreet. Additionally, Hargrave's personal counsel may assert individual privilege over certain of Hargrave's communications — particularly communications with personal counsel and personal notes or documents created in contemplation of personal legal exposure. To the extent such individually privileged materials are identified during the document review process, they must be preserved and logged on the privilege log separately from materials subject to Dunmore's corporate privilege. C&H should not review or disclose Hargrave's individually privileged materials without consultation with Jasmine Thornton and, if necessary, Victoria Chambers.
Natasha Sorokin. Sorokin is anticipated to retain Philip Keane of Wexford Keane LLP, located at 2000 K Street NW, Suite 650, Washington, D.C. 20006, although formal retention has not yet been confirmed as of this memorandum date. Sorokin was placed on administrative leave effective May 16, 2022, following the discovery of evidence suggesting that Sorokin may have failed to implement adequate sanctions screening procedures and may have disregarded compliance red flags. The same information-sharing restrictions applicable to Fisk and Hargrave apply to Sorokin. Upon confirmation of Keane's retention, the team should promptly establish appropriate information barriers.
Indemnification and Advancement. Dunmore's indemnification and advancement obligations to its officers and directors — which were analyzed in a separate memorandum prepared by Howard Quinn dated May 5, 2022 — do not create a common legal interest between Dunmore and the individual employees' personal counsel. The obligation to advance defense costs is a contractual and statutory duty; it does not imply an alignment of legal interests sufficient to support a common interest privilege. Accordingly, Dunmore's indemnification and advancement obligations do not justify sharing privileged investigation materials with individual counsel.
B. Upjohn Warning Compliance
All witness interviews conducted by C&H in connection with the internal investigation are subject to the Witness Interview Protocol & Upjohn Warning Script dated April 18, 2022, which was prepared by Jasmine Thornton and approved by Victoria Chambers. In accordance with th

MEMORANDUM

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

MATTER NO.: 1016-00009

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