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PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION

CALDERWOOD & HARKNESS LLP Avenue Louise 480 1050 Brussels, Belgium

Tel: +32 2 647 8800

Fax: +32 2 647 8801

www.calderwoodharkness.com

March 5, 2023

Mr. Nikolaos Andreadis Chairman & Chief Executive Officer Thalassa Shipping & Logistics SA 47 Akti Miaouli 185 35 Piraeus, Greece

Ms. Elena Papadimitriou Chief Financial Officer Thalassa Shipping & Logistics SA 47 Akti Miaouli 185 35 Piraeus, Greece

Re: Standstill Agreement Executed; Bank Guarantee Posted — AADE Customs Classification and Valuation Dispute C&H Matter No.: C&H-2022-ITS-04781

Dear Mr. Andreadis and Ms. Papadimitriou:

We are writing to confirm that the standstill arrangement between Thalassa Shipping & Logistics SA ("TSL" or the "Company") and the Independent Authority for Public Revenue of the Hellenic Republic (Ανεξάρτητη Αρχή Δημοσίων Εσόδων, "AADE") has been formalized and fully executed as of March 1, 2023. As you are aware, this arrangement was a central objective of the strategy we outlined in our previous correspondence and relates to the underlying Assessment Notices issued by AADE — specifically, Assessment Notice No. AADE/ADAN/2022/0073 (Classification) and Assessment Notice No. AADE/ADAN/2022/0074 (Valuation), both dated August 12, 2022 (collectively, the "Assessment Notices" or "ADANs"). The standstill also takes into account the pendency of TSL's Binding Tariff Information Application No. BTI-GR-2022-003847 (the "BTI Application"), which, as previously reported, was referred by AADE to the Directorate-General for Taxation and Customs Union of the European Commission ("DG TAXUD") for consultation on February 7, 2023.

This letter provides a comprehensive summary of the key terms of the standstill agreement, the financial impact of the bank guarantee that has been posted as security, the supplemental submission filed with DG TAXUD, and our recommendations for the period of dormancy that the matter is now entering. We ask that you review this letter carefully and contact us promptly with any questions or concerns.

I. Standstill Agreement — Summary of Key Terms

The standstill agreement (the "Standstill Agreement") was negotiated over the course of several weeks with AADE's external legal advisors, Meridian & Drakos Dikigiriko Grafeio, through their Senior Partner, Panagiotis Drakos. The final form of the Standstill Agreement was countersigned on March 1, 2023 by both Mr. Drakos, on behalf of AADE (acting under delegated authority), and Ms. Aikaterini Vlachopoulou, Chief Customs Auditor of the AADE Piraeus Regional Customs Office, who served as the authorized signatory on behalf of AADE in its capacity as the assessing authority. A fully executed copy of the Standstill Agreement has been delivered to our local counsel, Vournas & Theodorakis Dikigiriko Grafeio, and a copy is maintained in our files. We summarize the key terms below.

A. Enforcement Suspension

AADE has agreed that it will not enforce or seek to collect any of the amounts assessed under Assessment Notice No. AADE/ADAN/2022/0073 (Classification) or Assessment Notice No. AADE/ADAN/2022/0074 (Valuation) during the pendency of the standstill period (the "Standstill Period"). This includes, without limitation, a commitment by AADE to refrain from initiating any compulsory collection proceedings, issuing any garnishment or attachment orders, placing any liens on TSL's assets, or referring any amounts to third-party collection agents or the Greek tax enforcement apparatus. The enforcement suspension applies to both the principal amounts assessed and any interest, surcharges, or penalties associated with the Assessment Notices.

B. Duration. The Standstill Period will remain in effect until the earliest to occur of the following events:

(a) DG TAXUD issues its consultation opinion or classification guidance in response to the referral of BTI Application No. BTI-GR-2022-003847, whether in the form of a formal classification opinion, a recommendation to the Customs Code Committee, or otherwise;

(b) AADE issues a Binding Tariff Information ruling in response to BTI Application No. BTI-GR-2022-003847, following receipt of DG TAXUD's consultation opinion or upon the lapse of any applicable consultation period; or

(c) Either party delivers written notice of termination to the other party, in which case the Standstill Period shall expire sixty (60) calendar days following the date of such written notice.

The open-ended nature of the Standstill Period, subject to the termination-on-notice provision, is favorable to TSL because it avoids the imposition of an arbitrary deadline that could expire before DG TAXUD completes its review. As discussed in greater detail in Section III below, DG TAXUD consultations of this nature have historically required twelve to twenty-four months, and the current Standstill Agreement accommodates that timeline. We note, however, that the sixty-day termination-on-notice provision means that AADE retains the unilateral right to terminate the standstill at any time for any reason, provided it gives adequate written notice. We will actively monitor for any such termination notice throughout the Standstill Period.

C. Security — Bank Guarantee

As a condition to AADE's agreement to the enforcement suspension, TSL was required to post security in the form of a bank guarantee. TSL has arranged for Compass Maritime Bank SA ("Compass Maritime Bank" or "CMB") to issue an irrevocable, unconditional, first-demand bank guarantee in favor of AADE in the amount of €5,000,000 (the "Bank Guarantee"). The material details of the Bank Guarantee are as follows:

• Guarantee Number: CMB-BG-2023-0291

• Issuing Bank: Compass Maritime Bank SA

• Beneficiary: AADE (Piraeus Regional Customs Office)

• Amount: €5,000,000

• Date of Issuance: March 10, 2023

• Delivery to Beneficiary: Completed; the original Bank Guarantee instrument has been delivered to AADE

The €5,000,000 Bank Guarantee represents approximately fifty-seven percent (57%) of the total mid-case assessed amount of approximately €8,818,620. As previously communicated to TSL, the mid-case assessed amount reflects the aggregate of the duties assessed under both ADANs, including reclassification duties and valuation adjustments. While we had initially sought to negotiate a lower guarantee amount, AADE insisted on security covering a meaningful portion of the disputed amounts, and the €5,000,000 figure was accepted as a reasonable compromise that avoided the need for TSL to post security for the full assessed amount — an outcome that would have had significantly greater financial consequences.

D. Preservation of Rights

The Standstill Agreement expressly provides that both parties preserve all rights, claims, and defenses in connection with the underlying dispute. This provision was essential to TSL and was a non-negotiable element of the arrangement. Specifically:

(i) TSL's administrative objections filed with the Directorate of Resolution of Disputes (Διεύθυνση Επίλυσης Διαφορών, "DED") on November 30, 2022 remain pending and are not deemed withdrawn, abandoned, or otherwise compromised by TSL's entry into the Standstill Agreement. However, by mutual agreement, the DED proceedings on TSL's administrative objections to both ADANs are held in abeyance for the duration of the Standstill Period. This is a practical measure designed to avoid the expenditure of administrative resources on proceedings that may become moot or substantially informed by DG TAXUD's eventual classification guidance.

(ii) TSL preserves all rights to file an appeal with the Administrative Court of First Instance of Piraeus (Διοικητικό Πρωτοδικείο Πειραιά) in the event that the DED proceedings do not result in a favorable outcome for the Company. The statutory deadlines for such an appeal are tolled during the period in which the DED proceedings are held in abeyance.

(iii) AADE preserves its right to enforce the Assessment Notices in full upon the termination of the Standstill Period, including the right to draw upon the Bank Guarantee, subject to the terms and conditions of the Bank Guarantee instrument itself and applicable law.

(iv) Nothing in the Standstill Agreement constitutes an admission by TSL of the correctness of the classification or valuation positions taken by AADE in the Assessment Notices, and nothing constitutes a waiver by AADE of its right to assert those positions.

E. Interest Accrual

It is important to note that statutory interest continues to accrue on the assessed amounts during the Standstill Period at the applicable rate of 0.73% per month, as prescribed under Greek customs law. The Standstill Agreement does not provide for a suspension or waiver of interest accrual, and AADE was unwilling to agree to such a provision during the negotiations.

TSL has, however, expressly reserved the right to contest the interest calculation — including the applicable rate, the commencement date of the interest period, and the base amount on which interest is calculated — upon resolution of the underlying dispute. This reservation is important because TSL's position is that no interest should be owed at all if the Assessment Notices are ultimately reversed or modified, and that even if some amount of additional duties were to be found owing, the interest calculation should reflect only the correctly assessed amount.

For your financial planning purposes, we provide the following estimates of the current interest exposure:

• Accrued interest through August 2022 (date of Assessment Notices): Approximately €3,872,000 (as calculated by AADE and reflected in the Assessment Notices, covering the period from the original customs entries through the date of assessment).

• Ongoing monthly interest accrual: Approximately €12,389 per month, calculated on the total additional duties assessed of approximately €1,697,080 at the rate of 0.73% per month.

• Note: The ongoing monthly accrual figure is based on the additional duties component of the Assessment Notices only. Interest on the valuation adjustments assessed under ADAN/2022/0074 is calculated separately and is included in the broader figures previously provided to you.

We will update the running interest accrual calculation on a quarterly basis during the Standstill Period and include the updated figures in our periodic client communications.

F. Cooperation with DG TAXUD

Both parties have agreed to cooperate in good faith in responding to any requests from DG TAXUD for additional information, documentation, or submissions relating to the BTI consultation. This cooperation obligation extends to the provision of technical specifications, commercial documentation, and any other materials that DG TAXUD may reasonably request in the course of its review. We view this provision as beneficial to TSL because it ensures that AADE does not attempt to make ex parte submissions to DG TAXUD that could prejudice TSL's classification position, and it creates a framework for transparency in the consultation process.

II. Bank Guarantee — Financial Impact

We wish to draw your attention to the financial implications of the Bank Guarantee, as these may require coordination between TSL's finance team and its banking relationships.

The €5,000,000 Bank Guarantee has been issued under TSL's existing €75,000,000 revolving credit facility with Compass Maritime Bank SA (the "Facility"), governed by the Facility Agreement dated September 1, 2020 (as amended from time to time, the "Facility Agreement"). As the Bank Guarantee constitutes a contingent liability of Compass Maritime Bank under the Facility, it reduces the available undrawn capacity under the revolving facility by the full €5,000,000 guaranteed amount.

We recommend that Ms. Papadimitriou coordinate directly with Mr. Andreas Papathanasiou, Relationship Manager — Shipping & Logistics Division, Compass Maritime Bank SA, to confirm the precise impact of the Bank Guarantee on the Company's available facility capacity and to ensure that TSL remains in continued compliance with all financial covenants under the Facility Agreement. In particular, we draw your attention to the following:

• Net Debt / EBITDA Covenant: The Facility Agreement contains a financial maintenance covenant requiring TSL to maintain a Net Debt to EBITDA ratio not exceeding 3.5× at each quarterly testing date. Based on TSL's financial statements as of December 31, 2022, the Company's current ratio is approximately 2.9×, which provides headroom of approximately €27.4 million of additional net debt before the covenant threshold would be breached. This estimate has been updated from our earlier preliminary figures, which were based on FY2021 financial data. We note that this headroom analysis should be confirmed by TSL's finance team and its auditors based on the Company's definitive year-end financial statements.

• High-End Liability Scenario: Under the high-end liability scenario, in which TSL's total exposure (including duties, interest, and penalties) reaches approximately €14.7 million, and if the Bank Guarantee were drawn in full, the Net Debt / EBITDA ratio would increase, but based on our current estimates, it is projected to remain within the 3.5× covenant threshold. We strongly recommend, however, that Ms. Papadimitriou prepare a sensitivity analysis incorporating various liability outcomes and their impact on the Company's covenant compliance.

• Material Litigation Disclosure: As you will recall, a material litigation disclosure was provided to Compass Maritime Bank on October 3, 2022, pursuant to Section 6.2(d) of the Facility Agreement, which requires disclosure of any litigation, arbitration, or administrative proceedings involving claims in excess of €2,000,000. That initial disclosure satisfied TSL's formal notification obligation under the Facility Agreement, and no further formal disclosure is currently required as a result of the execution of the Standstill Agreement or the posting of the Bank Guarantee. However, we advise that TSL provide periodic informal updates to Mr. Papathanasiou regarding the status of the dispute as a matter of good practice and relationship management. Maintaining an open dialogue with the Company's primary lender will be important should TSL need to seek any modifications to the Facility Agreement or additional accommodations in connection with this matter.

III. Supplemental Submission to DG TAXUD

On March 15, 2023, Calderwood & Harkness (Brussels office), in coordination with our local counsel Vournas & Theodorakis Dikigiriko Grafeio, filed a supplemental submission with DG TAXUD, transmitted through AADE in accordance with the established consultation procedure (the "Supplemental Submission"). The purpose of the Supplemental Submission is to provide DG TAXUD with additional evidentiary materials and legal analysis in support of TSL's classification position — namely, that both the ship-to-shore ("STS") gantry cranes and the automated stacking crane ("ASC") systems that are the subject of the dispute are correctly classified under Combined Nomenclature subheading 8426 19 00 (other self-propelled cranes and lifting machinery) rather than under heading 8428 (other lifting, handling, loading, or unloading machinery), as asserted by AADE.

The Supplemental Submission included the following exhibits:

1. Expert Opinion of Dr. Lukas Brenner. Dr. Brenner is the Managing Director of Argonaut Trade Consulting GmbH, based in Berlin, and a former member of the World Customs Organization ("WCO") Harmonized System Committee, on which he served from 2008 to 2016. Dr. Brenner's opinion addresses the technical characteristics and principal function of the STS gantry cranes and ASC systems and concludes that both types of equipment fall squarely within the scope of heading 8426 as "cranes" within the meaning of the Harmonized System Explanatory Notes.

2. Survey of EU Member State BTI Rulings. Calderwood & Harkness conducted a comprehensive survey of Binding Tariff Information rulings issued by EU member state customs authorities on STS cranes and ASC systems. The survey demonstrates that a clear majority of member states have classified these types of equipment under heading 8426, which supports TSL's position and undermines AADE's reliance on heading 8428.

3. Summary of WCO HS Committee Precedent. We provided a summary of relevant WCO Harmonized System Committee decisions and classification opinions addressing automated cranes, semi-automated container handling equipment, and related machinery. These precedents support the conclusion that the automation features of the ASC systems do not alter their fundamental classification as cranes under heading 8426.

The Supplemental Submission also directly addresses the divergence between two significant BTI rulings issued by other EU member states:

• Dutch BTI Ruling NL-BTI-2021-01234, which supports classification of STS cranes and similar equipment under heading 8426, consistent with TSL's position; and

• German BTI Ruling DE-BTI-2020-05678, which supports classification of ASC systems under heading 8428, consistent with AADE's position.

This divergence between member state BTI rulings is precisely the type of inconsistency that DG TAXUD's consultation procedure is designed to resolve, and TSL has requested that DG TAXUD confirm classification under heading 8426 and provide uniform guidance to all member states — potentially through the adoption of a classification regulation pursuant to Article 57(4) of the Union Customs Code ("UCC") or through a recommendation issued via the Customs Code Committee under the advisory or examination procedure.

We note that no timeline for DG TAXUD's response has been communicated. Based on historical precedent with similar consultations, we estimate that the process may take twelve to twenty-four months from the date of referral, resulting in an estimated resolution window of approximately Q1 2024 through Q1 2025. We will continue to monitor DG TAXUD's progress closely throughout this period.

IV. Current Matter Status — Entering Dormant Phase

With the Standstill Agreement fully executed and in effect, the BTI Application pending before AADE subject to DG TAXUD consultation, TSL's administrative objections held in abeyance before the DED, and all core work product completed, the matter is now entering a dormant phase in which active litigation and advisory work will be substantially reduced pending developments at the DG TAXUD level. We provide below a summary of the completed work product and procedural milestones achieved to date:

• BTI Application: BTI Application No. BTI-GR-2022-003847 was filed on November 15, 2022 and is currently pending DG TAXUD consultation.

• Administrative Objections: Administrative objections to both ADAN/2022/0073 and ADAN/2022/0074 were filed with the Directorate of Resolution of Disputes (DED) on November 30, 2022 and are currently held in abeyance pursuant to the Standstill Agreement.

• Supplemental DG TAXUD Submission: Filed on March 15, 2023 as described in Section III above.

• Expert Retentions: Expert consultants have been retained and are on standby for the duration of the dormancy period. Dr. Lukas Brenner and Argonaut Trade Consulting GmbH (Berlin) are engaged for customs classification analysis. Mr. Spyros Makris and Kestrel & Palladian LLP are engaged for customs valuation advisory services. These retentions will remain in place and can be activated promptly if and when the matter exits the dormant phase.

• Insurance Claim Notice: A claim notice was filed with Oceanos Underwriters SA (Policy No. OCU-FIN-2021-GR-0487) through TSL's insurance broker, Aether Insurance Brokers (contact: Fiona Hartwell), on October 15, 2022. Oceanos issued a reservation of rights letter dated November 22, 2022, to which Calderwood & Harkness responded on December 12, 2022. The insurance claim remains open and active.

• Material Litigation Disclosure to Lender: As described in Section II above, disclosure was provided to Compass Maritime Bank on October 3, 2022 pursuant to Section 6.2(d) of the Facility Agreement.

• Demand and Preservation Letter to Customs Broker: A formal demand and preservation letter was sent to Peloros Customs Agency S.A. (attention: Stavros Liapis) on December 15, 2022, preserving TSL's rights to seek contribution or indemnification from its customs broker in connection with the disputed customs entries and putting Peloros on notice of its obligation to preserve all relevant documents and records.

• Internal Document Preservation: An internal TSL document preservation notice was issued on October 20, 2022 to all relevant personnel and departments within the Company, requiring preservation of all documents, communications, and data relating to the Hailong contracts, the Nereus Maritime Advisory engagement, the Technology License Agreement, customs entries, the AADE audit, and related matters.

V. Monitoring and Next Steps During Dormancy

Although the matter is entering a dormant phase, Calderwood & Harkness will maintain active monitoring protocols to ensure that TSL is promptly advised of any material developments and that all procedural deadlines, administrative requirements, and protective measures are maintained throughout the Standstill Period. The monitoring framework is as follows:

• Monthly — DG TAXUD Monitoring: Christy Bauer (Lead Associate, Calderwood & Harkness Brussels) will monitor DG TAXUD on a monthly basis for the publication of any classification regulations, Customs Code Committee meeting agendas and minutes, updates to the European Binding Tariff Information database (EBTI-3), and any other public communications or regulatory developments that may be relevant to TSL's classification dispute.

• Monthly — AADE Communications Monitoring: On a monthly basis, we will confirm with Vournas & Theodorakis (Alexandros Vournas, Managing Partner, and Maria-Christina Georgiou, Senior Associate) that no communications have been received from AADE, Meridian & Drakos, or any other Greek government authority in connection with the dispute or the Standstill Agreement.

• Quarterly — Client Check-In: We recommend scheduling quarterly check-in communications with TSL to provide a brief status update on the matter. We propose the following schedule: April 2023, July 2023, October 2023, and January 2024. These check-ins may be conducted by email or brief telephone call, as TSL prefers.

• As Needed — Bank Guarantee Renewal: We will monitor the Bank Guarantee (CMB-BG-2023-0291) to ensure that it remains in effect for the full duration of the Standstill Period. Should the Bank Guarantee approach its expiry date or require renewal, we will coordinate with TSL and Compass Maritime Bank to ensure continuity of the guarantee.

• Prior to March 31, 2023 — Insurance Policy Renewal: The Oceanos Financial Lines Policy (Policy No. OCU-FIN-2021-GR-0487) is due for renewal on or about March 31, 2023. It is critical that TSL ensure the policy is renewed and that the pending claim is carried forward under the renewed policy. We recommend that Ms. Papadimitriou coordinate with Fiona Hartwell at Aether Insurance Brokers to confirm renewal and continued coverage. Given the proximity of this deadline, we urge prompt action on this item.

• Quarterly — Interest Accrual Update: We will update the running interest accrual calculation on a quarterly basis and include the updated figures in our periodic communications to TSL.

• Ongoing — Standstill Termination Monitoring: We will maintain vigilance for any written notice of termination of the Standstill Agreement from AADE. As noted above, the Standstill Agreement provides for sixty (60) calendar days' notice, and receipt of such a notice would trigger an immediate need to reassess strategy and prepare for active proceedings.

VI. Recommended Client Actions

We ask that TSL take the following actions in the near term:

1. Coordinate with Compass Maritime Bank. Ms. Papadimitriou should contact Mr. Andreas Papathanasiou at Compass Maritime Bank SA regarding the impact of the €5,000,000 Bank Guarantee on the Company's available capacity under the revolving credit facility and to confirm continued compliance with the Net Debt / EBITDA financial covenant and all other applicable covenants under the Facility Agreement.

2. Renew Insurance Policy. TSL should ensure that the Oceanos Financial Lines Policy (Policy No. OCU-FIN-2021-GR-0487, sublimit €3,000,000, retention €250,000) is renewed upon its scheduled expiry on or about March 31, 2023. It is essential that the pending claim be carried forward under the renewed policy, and that Oceanos be notified of the renewal with specific reference to the ongoing claim. Failure to renew or to maintain notification of the claim could jeopardize TSL's ability to recover under the policy if the dispute ultimately results in a liability.

3. Continue Document Preservation. All TSL personnel must continue to comply with the document preservation notice issued on October 20, 2022. All documents, communications (including emails, text messages, and instant messages), contracts, internal memoranda, technical specifications, financial records, and data related to the Hailong contracts, the Nereus Maritime Advisory engagement, the Technology License Agreement, customs entries made by or on behalf of TSL, and the AADE audit must be preserved in their entirety. No documents falling within the scope of the preservation notice may be destroyed, deleted, or modified under any circumstances.

4. Notify Calderwood & Harkness of Any Communications. TSL should promptly notify Calderwood & Harkness of any communications received — whether by letter, email, telephone, or otherwise — from AADE, Meridian & Drakos Dikigiriko Grafeio, DG TAXUD, the DED, or any other governmental authority or third party relating to the dispute, the Assessment Notices, the BTI Application, or the Standstill Agreement.

5. No Direct Communications with AADE. TSL personnel should not communicate directly with AADE or its counsel, Meridian & Drakos, regarding the substance of the dispute without first consulting with Calderwood & Harkness. All substantive communications with AADE should be channeled through our local counsel, Vournas & Theodorakis, to ensure consistency of position and to preserve all applicable privileges.

VII. Fee and Billing Update

During the dormant phase, Calderwood & Harkness's billing on this matter will be minimal, reflecting primarily the monitoring activities described in Section V above and periodic client updates. Based on the anticipated scope of dormancy-phase work, we estimate monthly costs of approximately $1,500 to $3,000 per month, consisting primarily of associate-level time for monitoring activities, brief coordination with local counsel, and quarterly client communications.

Calderwood & Harkness will continue to render monthly invoices for any time incurred and expenses advanced in connection with this matter. All invoices remain payable within thirty (30) days of the date of invoice, in accordance with the terms of the engagement letter dated September 22, 2022. Should significant unexpected developments arise — such as a termination of the Standstill Agreement, a request from DG TAXUD for additional submissions, or any communication from AADE — we would notify TSL promptly and discuss the anticipated scope and cost of any responsive work before proceeding.

We are pleased that the standstill arrangement has been successfully formalized, as it provides TSL with meaningful protection from enforcement action during the critical period in which DG TAXUD considers the classification issue. We believe the Company is well positioned to benefit from a favorable DG TAXUD opinion, and we remain confident in the strength of TSL's classification arguments.

Our team will continue to monitor this matter actively during the dormancy period and will promptly advise you of any material developments. Should you wish to schedule a call or meeting to discuss any aspect of this letter or the status of the dispute, please do not hesitate to contact us.

Please direct any questions to James Prentice (james.prentice@calderwoodharkness.com; +32 2 647 8812) or Christy Bauer (christy.bauer@calderwoodharkness.com; +32 2 647 8834).

We thank you for your continued confidence in Calderwood & Harkness.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

James Prentice Partner

By: ________

Christy Bauer Senior Associate

cc: Garrett Simmons, Associate, Calderwood & Harkness LLP Alexandros Vournas, Managing Partner, Vournas & Theodorakis Dikigiriko Grafeio

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION
CALDERWOOD & HARKNESS LLP Avenue Louise 480 1050 Brussels, Belgium
Tel: +32 2 647 8800
Fax: +32 2 647 8801
www.calderwoodharkness.com
March 5, 2023
Mr. Nikolaos Andreadis Chairman & Chief Executive Officer Thalassa Shipping & Logistics SA 47 Akti Miaouli 185 35 Piraeus, Greece
Ms. Elena Papadimitriou Chief Financial Officer Thalassa Shipping & Logistics SA 47 Akti Miaouli 185 35 Piraeus, Greece
Re: Standstill Agreement Executed; Bank Guarantee Posted — AADE Customs Classification and Valuation Dispute C&H Matter No.: C&H-2022-ITS-04781
Dear Mr. Andreadis and Ms. Papadimitriou:
We are writing to confirm that the standstill arrangement between Thalassa Shipping & Logistics SA ("TSL" or the "Company") and the Independent Authority for Public Revenue of the Hellenic Republic (Ανεξάρτητη Αρχή Δημοσίων Εσόδων, "AADE") has been formalized and fully executed as of March 1, 2023. As you are aware, this arrangement was a central objective of the strategy we outlined in our previous correspondence and relates to the underlying Assessment Notices issued by AADE — specifically, Assessment Notice No. AADE/ADAN/2022/0073 (Classification) and Assessment Notice No. AADE/ADAN/2022/0074 (Valuation), both dated August 12, 2022 (collectively, the "Assessment Notices" or "ADANs"). The standstill also takes into account the pendency of TSL's Binding Tariff Information Application No. BTI-GR-2022-003847 (the "BTI Application"), which, as previously reported, was referred by AADE to the Directorate-General for Taxation and Customs Union of the European Commission ("DG TAXUD") for consultation on February 7, 2023.
This letter provides a comprehensive summary of the key terms of the standstill agreement, the financial impact of the bank guarantee that has been posted as security, the supplemental submission filed with DG TAXUD, and our recommendations for the period of dormancy that the matter is now entering. We ask that you review this letter carefully and contact us promptly with any questions or concerns.
I. Standstill Agreement — Summary of Key Terms
The standstill agreement (the "Standstill Agreement") was negotiated over the course of several weeks with AADE's external legal advisors, Meridian & Drakos Dikigiriko Grafeio, through their Senior Partner, Panagiotis Drakos. The final form of the Standstill Agreement was countersigned on March 1, 2023 by both Mr. Drakos, on behalf of AADE (acting under delegated authority), and Ms. Aikaterini Vlachopoulou, Chief Customs Auditor of the AADE Piraeus Regional Customs Office, who served as the authorized signatory on behalf of AADE in its capacity as the assessing authority. A fully executed copy of the Standstill Agreement has been delivered to our local counsel, Vournas & Theodorakis Dikigiriko Grafeio, and a copy is maintained in our files. We summarize the key terms below.
A. Enforcement Suspension
AADE has agreed that it will not enforce or seek to collect any of the amounts assessed under Assessment Notice No. AADE/ADAN/2022/0073 (Classification) or Assessment Notice No. AADE/ADAN/2022/0074 (Valuation) during the pendency of the standstill period (the "Standstill Period"). This includes, without limitation, a commitment by AADE to refrain from initiating any compulsory collection proceedings, issuing any garnishment or attachment orders, placing any liens on TSL's assets, or referring any amounts to third-party collection agents or the Greek tax enforcement apparatus. The enforcement suspension applies to both the principal amounts assessed and any interest, surcharges, or penalties associated with the Assessment Notices.
B. Duration. The Standstill Period will remain in effect until the earliest to occur of the following events:
(a) DG TAXUD issues its consultation opinion or classification guidance in response to the referral of BTI Application No. BTI-GR-2022-003847, whether in the form of a formal classification opinion, a recommendation to the Customs Code Committee, or otherwise;
(b) AADE issues a Binding Tariff Information ruling in response to BTI Application No. BTI-GR-2022-003847, following receipt of DG TAXUD's consultation opinion or upon the lapse of any applicable consultation period; or
(c) Either party delivers written notice of termination to the other party, in which case the Standstill Period shall expire sixty (60) calendar days following the date of such written notice.
The open-ended nature of the Standstill Period, subject to the termination-on-notice provision, is favorable to TSL because it avoids the imposition of an arbitrary deadline that could expire before DG TAXUD completes its review. As discussed in greater detail in Section III below, DG TAXUD consultations of this nature have historically required twelve to twenty-four months, and the current Standstill Agreement accommodates that timeline. We note, however, that the sixty-day termination-on-notice provision means that AADE retains the unilateral right to terminate the standstill at any time for any reason, provided it gives adequate written notice. We will actively monitor for any such termination notice throughout the Standstill Period.
C. Security — Bank Guarantee
As a condition to AADE's agreement to the enforcement suspension, TSL was required to post security in the form of a bank guarantee. TSL has arranged for Compass Maritime Bank SA ("Compass Maritime Bank" or "CMB") to issue an irrevocable, unconditional, first-demand bank guarantee in favor of AADE in the amount of €5,000,000 (the "Bank Guarantee"). The material details of the Bank Guarantee are as follows:
• Guarantee Number: CMB-BG-2023-0291
• Issuing Bank: Compass Maritime Bank SA
• Beneficiary: AADE (Piraeus Regional Customs Office)
• Amount: €5,000,000
• Date of Issuance: March 10, 2023
• Delivery to Beneficiary: Completed; the original Bank Guarantee instrument has been delivered to AADE
The €5,000,000 Bank Guarantee represents approximately fifty-seven percent (57%) of the total mid-case assessed amount of approximately €8,818,620. As previously communicated to TSL, the mid-case assessed amount reflects the aggregate of the duties assessed under both ADANs, including reclassification duties and valuation adjustments. While we had initially sought to negotiate a lower guarantee amount, AADE insisted on security covering a meaningful portion of the disputed amounts, and the €5,000,000 figure was accepted as a reasonable compromise that avoided the need for TSL to post security for the full assessed amount — an outcome that would have had significantly greater financial consequences.
D. Preservation of Rights
The Standstill Agreement expressly provides that both parties preserve all rights, claims, and defenses in connection with the underlying dispute. This provision was essential to TSL and was a non-negotiable element of the arrangement. Specifically:
(i) TSL's administrative objections filed with the Directorate of Resolution of Disputes (Διεύθυνση Επίλυσης Διαφορών, "DED") on November 30, 2022 remain pending and are not deemed withdrawn, abandoned, or otherwise compromised by TSL's entry into the Standstill Agreement. However, by mutual agreement, the DED proceedings on TSL's administrative objections to both ADANs are held in abeyance for the duration of the Standstill Period. This is a practical measure designed to avoid the expenditure of administrative resources on proceedings that may become moot or substantially informed by DG TAXUD's eventual classification guidance.
(ii) TSL preserves all rights to file an appeal with the Administrative Court of First Instance of Piraeus (Διοικητικό Πρωτοδικείο Πειραιά) in the event that the DED proceedings do not result in a favorable outcome for the Company. The statutory deadlines for such an appeal are tolled during the period in which the DED proceedings are held in abeyance.
(iii) AADE preserves its right to enforce the Assessment Notices in full upon the termination of the Standstill Period, including the right to draw upon the Bank Guarantee, subject to the terms and conditions of the Bank Guarantee instrument itself and applicable law.
(iv) Nothing in the Standstill Agreement constitutes an admission by TSL of the correctness of the classification or valuation positions taken by AADE in the Assessment Notices, and nothing constitutes a waiver by AADE of its right to assert those positions.
E. Interest Accrual
It is important to note that statutory interest continues to accrue on the assessed amounts during the Standstill Period at the applicable rate of 0.73% per month, as prescribed under Greek customs law. The Standstill Agreement does not provide for a suspension or waiver of interest accrual, and AADE was unwilling to agree to such a provision during the negotiations.
TSL has, however, expressly reserved the right to contest the interest calculation — including the applicable rate, the commencement date of the interest period, and the base amount on which interest is calculated — upon resolution of the underlying dispute. This reservation is important because TSL's position is that no interest should be owed at all if the Assessment Notices are ultimately reversed or modified, and that even if some amount of additional duties were to be found owing, the interest calculation should reflect only the correctly assessed amount.
For your financial planning purposes, we provide the following estimates of the current interest exposure:
• Accrued interest through August 2022 (date of Assessment Notices): Approximately €3,872,000 (as calculated by AADE and reflected in the Assessment Notices, covering the period from the original customs entries through the date of assessment).
• Ongoing monthly interest accrual: Approximately €12,389 per month, calculated on the total additional duties assessed of approximately €1,697,080 at the rate of 0.73% per month.
• Note: The ongoing monthly accrual figure is based on the additional duties component of the Assessment Notices only. Interest on the valuation adjustments assessed under ADAN/2022/0074 is calculated separately and is included in the broader figures previously provided to you.
We will update the running interest accrual calculation on a quarterly basis during the Standstill Period and include the updated figures in our periodic client communications.
F. Cooperation with DG TAXUD
Both parties have agreed to cooperate in good faith in responding to any requests from DG TAXUD for additional information, documentation, or submissions relating to the BTI consultation. This cooperation obligation extends to the provision of technical specifications, commercial documentation, and any other materials that DG TAXUD may reasonably request in the course of its review. We view this provision as beneficial to TSL because it ensures that AADE does not attempt to make ex parte submissions to DG TAXUD that could prejudice TSL's classification position, and it creates a framework for transparency in the consultation process.
II. Bank Guarantee — Financial Impact
We wish to draw your attention to the financial implications of the Bank Guarantee, as these may require coordination between TSL's finance team and its banking relationships.
The €5,000,000 Bank Guarantee has been issued under TSL's existing €75,000,000 revolving credit facility with Compass Maritime Bank SA (the "Facility"), governed by the Facility Agreement dated September 1, 2020 (as amended from time to time, the "Facility Agreement"). As the Bank Guarantee constitutes a contingent liability of Compass Maritime Bank under the Facility, it reduces the available undrawn capacity under the revolving facility by the full €5,000,000 guaranteed amount.
We recommend that Ms. Papadimitriou coordinate directly with Mr. Andreas Papathanasiou, Relationship Manager — Shipping & Logistics Division, Compass Maritime Bank SA, to confirm the precise impact of the Bank Guarantee on the Company's available facility capacity and to ensure that TSL remains in continued compliance with all financial covenants under the Facility Agreement. In particular, we draw your attention to the following:
• Net Debt / EBITDA Covenant: The Facility Agreement contains a financial maintenance covenant requiring TSL to maintain a Net Debt to EBITDA ratio not exceeding 3.5× at each quarterly testing date. Based on TSL's financial statements as of December 31, 2022, the Company's current ratio is approximately 2.9×, which provides headroom of approximately €27.4 million of additional net debt before the covenant threshold would be breached. This estimate has been updated from our earlier preliminary figures, which were based on FY2021 financial data. We note that this headroom analysis should be confirmed by TSL's finance team and its auditors based on the Company's definitive year-end financial statements.
• High-End Liability Scenario: Under the high-end liability scenario, in which TSL's total exposure (including duties, interest, and penalties) reaches approximately €14.7 million, and if the Bank Guarantee were drawn in full, the Net Debt / EBITDA ratio would increase, but based on our current estimates, it is projected to remain within the 3.5× covenant threshold. We strongly recommend, however, that Ms. Papadimitriou prepare a sensitivity analysis incorporating various liability outcomes and their impact on the Company's covenant compliance.
• Material Litigation Disclosure: As you will recall, a material litigation disclosure was provided to Compass Maritime Bank on October 3, 2022, pursuant to Section 6.2(d) of the Facility Agreement, which requires disclosure of any litigation, arbitration, or administrative proceedings involving claims in excess of €2,000,000. That initial disclosure satisfied TSL's formal notification obligation under the Facility Agreement, and no further formal disclosure is currently required as a result of the execution of the Standstill Agreement or the posting of the Bank Guarantee. However, we advise that TSL provide periodic informal updates to Mr. Papathanasiou regarding the status of the dispute as a matter of good practice and relationship management. Maintaining an open dialogue with the Company's primary lender will be important should TSL need to seek any modifications to the Facility Agreement or additional accommodations in connection with this matter.
III. Supplemental Submission to DG TAXUD
On March 15, 2023, Calderwood & Harkness (Brussels office), in coordination with our local counsel Vournas & Theodorakis Dikigiriko Grafeio, filed a supplemental submission with DG TAXUD, transmitted through AADE in accordance with the established consultation procedure (the "Supplemental Submission"). The purpose of the Supplemental Submission is to provide DG TAXUD with additional evidentiary materials and legal analysis in support of TSL's classification position — namely, that both the ship-to-shore ("STS") gantry cranes and the automated stacking crane ("ASC") systems that are the subject of the dispute are correctly classified under Combined Nomenclature subheading 8426 19 00 (other self-propelled cranes and lifting machinery) rather than under heading 8428 (other lifting, handling, loading, or unloading machinery), as asserted by AADE.
The Supplemental Submission included the following exhibits:
1. Expert Opinion of Dr. Lukas Brenner. Dr. Brenner is the Managing Director of Argonaut Trade Consulting GmbH, based in Berlin, and a former member of the World Customs Organization ("WCO") Harmonized System Committee, on which he served from 2008 to 2016. Dr. Brenner's opinion addresses the technical characteristics and principal function of the STS gantry cranes and ASC systems and concludes that both types of equipment fall squarely within the scope of heading 8426 as "cranes" within the meaning of the Harmonized System Explanatory Notes.
2. Survey of EU Member State BTI Rulings. Calderwood & Harkness conducted a comprehensive survey of Binding Tariff Information rulings issued by EU member state customs authorities on STS cranes and ASC systems. The survey demonstrates that a clear majority of member states have classified these types of equipment under heading 8426, which supports TSL's position and undermines AADE's reliance on heading 8428.
3. Summary of WCO HS Committee Precedent. We provided a summary of relevant WCO Harmonized System Committee decisions and classification opinions addressing automated cranes, semi-automated container handling equipment, and related machinery. These precedents support the conclusion that the automation features of the ASC systems do not alter their fundamental classification as cranes under heading 8426.
The Supplemental Submission also directly addresses the divergence between two significant BTI rulings issued by other EU member states:
• Dutch BTI Ruling NL-BTI-2021-01234, which supports classification of STS cranes and similar equipment under heading 8426, consistent with TSL's position; and
• German BTI Ruling DE-BTI-2020-05678, which supports classification of ASC systems under heading 8428, consistent with AADE's position.
This divergence between member state BTI rulings is precisely the type of inconsistency that DG TAXUD's consultation procedure is designed to resolve, and TSL has requested that DG TAXUD confirm classification under heading 8426 and provide uniform guidance to all member states — potentially through the adoption of a classification regulation pursuant to Article 57(4) of the Union Customs Code ("UCC") or through a recommendation issued via the Customs Code Committee under the advisory or examination procedure.
We note that no timeline for DG TAXUD's response has been communicated. Based on historical precedent with similar consultations, we estimate that the process may take twelve to twenty-four months from the date of referral, resulting in an estimated resolution window of approximately Q1 2024 through Q1 2025. We will continue to monitor DG TAXUD's progress closely throughout this period.
IV. Current Matter Status — Entering Dormant Phase
With the Standstill Agreement fully executed and in effect, the BTI Application pending before AADE subject to DG TAXUD consultation, TSL's administrative objections held in abeyance before the DED, and all core work product completed, the matter is now entering a dormant phase in which active litigation and advisory work will be substantially reduced pending developments at the DG TAXUD level. We provide below a summary of the completed work product and procedural milestones achieved to date:
• BTI Application: BTI Application No. BTI-GR-2022-003847 was filed on November 15, 2022 and is currently pending DG TAXUD consultation.
• Administrative Objections: Administrative objections to both ADAN/2022/0073 and ADAN/2022/0074 were filed with the Directorate of Resolution of Disputes (DED) on November 30, 2022 and are currently held in abeyance pursuant to the Standstill Agreement.
• Supplemental DG TAXUD Submission: Filed on March 15, 2023 as described in Section III above.
• Expert Retentions: Expert consultants have been retained and are on standby for the duration of the dormancy period. Dr. Lukas Brenner and Argonaut Trade Consulting GmbH (Berlin) are engaged for customs classification analysis. Mr. Spyros Makris and Kestrel & Palladian LLP are engaged for customs valuation advisory services. These retentions will remain in place and can be activated promptly if and when the matter exits the dormant phase.
• Insurance Claim Notice: A claim notice was filed with Oceanos Underwriters SA (Policy No. OCU-FIN-2021-GR-0487) through TSL's insurance broker, Aether Insurance Brokers (contact: Fiona Hartwell), on October 15, 2022. Oceanos issued a reservation of rights letter dated November 22, 2022, to which Calderwood & Harkness responded on December 12, 2022. The insurance claim remains open and active.
• Material Litigation Disclosure to Lender: As described in Section II above, disclosure was provided to Compass Maritime Bank on October 3, 2022 pursuant to Section 6.2(d) of the Facility Agreement.
• Demand and Preservation Letter to Customs Broker: A formal demand and preservation letter was sent to Peloros Customs Agency S.A. (attention: Stavros Liapis) on December 15, 2022, preserving TSL's rights to seek contribution or indemnification from its customs broker in connection with the disputed customs entries and putting Peloros on notice of its obligation to preserve all relevant documents and records.
• Internal Document Preservation: An internal TSL document preservation notice was issued on October 20, 2022 to all relevant personnel and departments within the Company, requiring preservation of all documents, communications, and data relating to the Hailong contracts, the Nereus Maritime Advisory engagement, the Technology License Agreement, customs entries, the AADE audit, and related matters.
V. Monitoring and Next Steps During Dormancy
Although the matter is entering a dormant phase, Calderwood & Harkness will maintain active monitoring protocols to ensure that TSL is promptly advised of any material developments and that all procedural deadlines, administrative requirements, and protective measures are maintained throughout the Standstill Period. The monitoring framework is as follows:
• Monthly — DG TAXUD Monitoring: Christy Bauer (Lead Associate, Calderwood & Harkness Brussels) will monitor DG TAXUD on a monthly basis for the publication of any classification regulations, Customs Code Committee meeting agendas and minutes, updates to the European Binding Tariff Information database (EBTI-3), and any other public communications or regulatory developments that may be relevant to TSL's classification dispute.
• Monthly — AADE Communications Monitoring: On a monthly basis, we will confirm with Vournas & Theodorakis (Alexandros Vournas, Managing Partner, and Maria-Christina Georgiou, Senior Associate) that no communications have been received from AADE, Meridian & Drakos, or any other Greek government authority in connection with the dispute or the Standstill Agreement.
• Quarterly — Client Check-In: We recommend scheduling quarterly check-in communications with TSL to provide a brief status update on the matter. We propose the following schedule: April 2023, July 2023, October 2023, and January 2024. These check-ins may be conducted by email or brief telephone call, as TSL prefers.
• As Needed — Bank Guarantee Renewal: We will monitor the Bank Guarantee (CMB-BG-2023-0291) to ensure that it remains in effect for the full duration of the Standstill Period. Should the Bank Guarantee approach its expiry date or require renewal, we will coordinate with TSL and Compass Maritime Bank to ensure continuity of the guarantee.
• Prior to March 31, 2023 — Insurance Policy Renewal: The Oceanos Financial Lines Policy (Policy No. OCU-FIN-2021-GR-0487) is due for renewal on or about March 31, 2023. It is critical that TSL ensure the policy is renewed and that the pending claim is carried forward under the renewed policy. We recommend that Ms. Papadimitriou coordinate with Fiona Hartwell at Aether Insurance Brokers to confirm renewal and continued coverage. Given the proximity of this deadline, we urge prompt action on this item.
• Quarterly — Interest Accrual Update: We will update the running interest accrual calculation on a quarterly basis and include the updated figures in our periodic communications to TSL.
• Ongoing — Standstill Termination Monitoring: We will maintain vigilance for any written notice of termination of the Standstill Agreement from AADE. As noted above, the Standstill Agreement provides for sixty (60) calendar days' notice, and receipt of such a notice would trigger an immediate need to reassess strategy and prepare for active proceedings.
VI. Recommended Client Actions
We ask that TSL take the following actions in the near term:
1. Coordinate with Compass Maritime Bank. Ms. Papadimitriou should contact Mr. Andreas Papathanasiou at Compass Maritime Bank SA regarding the impact of the €5,000,000 Bank Guarantee on the Company's available capacity under the revolving credit facility and to confirm continued compliance with the Net Debt / EBITDA financial covenant and all other applicable covenants under the Facility Agreement.
2. Renew Insurance Policy. TSL should ensure that the Oceanos Financial Lines Policy (Policy No. OCU-FIN-2021-GR-0487, sublimit €3,000,000, retention €250,000) is renewed upon its scheduled expiry on or about March 31, 2023. It is essential that the pending claim be carried forward under the renewed policy, and that Oceanos be notified of the renewal with specific reference to the ongoing claim. Failure to renew or to maintain notification of the claim could jeopardize TSL's ability to recover under the policy if the dispute ultimately results in a liability.
3. Continue Document Preservation. All TSL personnel must continue to comply with the document preservation notice issued on October 20, 2022. All documents, communications (including emails, text messages, and instant messages), contracts, internal memoranda, technical specifications, financial records, and data related to the Hailong contracts, the Nereus Maritime Advisory engagement, the Technology License Agreement, customs entries made by or on behalf of TSL, and the AADE audit must be preserved in their entirety. No documents falling within the scope of the preservation notice may be destroyed, deleted, or modified under any circumstances.
4. Notify Calderwood & Harkness of Any Communications. TSL should promptly notify Calderwood & Harkness of any communications received — whether by letter, email, telephone, or otherwise — from AADE, Meridian & Drakos Dikigiriko Grafeio, DG TAXUD, the DED, or any other governmental authority or third party relating to the dispute, the Assessment Notices, the BTI Application, or the Standstill Agreement.
5. No Direct Communications with AADE. TSL personnel should not communicate directly with AADE or its counsel, Meridian & Drakos, regarding the substance of the dispute without first consulting with Calderwood & Harkness. All substantive communications with AADE should be channeled through our local counsel, Vournas & Theodorakis, to ensure consistency of position and to preserve all applicable privileges.
VII. Fee and Billing Update
During the dormant phase, Calderwood & Harkness's billing on this matter will be minimal, reflecting primarily the monitoring activities described in Section V above and periodic client updates. Based on the anticipated scope of dormancy-phase work, we estimate monthly costs of approximately $1,500 to $3,000 per month, consisting primarily of associate-level time for monitoring activities, brief coordination with local counsel, and quarterly client communications.
Calderwood & Harkness will continue to render monthly invoices for any time incurred and expenses advanced in connection with this matter. All invoices remain payable within thirty (30) days of the date of invoice, in accordance with the terms of the engagement letter dated September 22, 2022. Should significant unexpected developments arise — such as a termination of the Standstill Agreement, a request from DG TAXUD for additional submissions, or any communication from AADE — we would notify TSL promptly and discuss the anticipated scope and cost of any responsive work before proceeding.
We are pleased that the standstill arrangement has been successfully formalized, as it provides TSL with meaningful protection from enforcement action during the critical period in which DG TAXUD considers the classification issue. We believe the Company is well positioned to benefit from a favorable DG TAXUD opinion, and we remain confident in the strength of TSL's classification arguments.
Our team will continue to monitor this matter actively during the dormancy period and will promptly advise you of any material developments. Should you wish to schedule a call or meeting to discuss any aspect of this letter or the status of the dispute, please do not hesitate to contact us.
Please direct any questions to James Prentice (james.prentice@calderwoodharkness.com; +32 2 647 8812) or Christy Bauer (christy.bauer@calderwoodharkness.com; +32 2 647 8834).
We thank you for your continued confidence in Calderwood & Harkness.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
James Prentice Partner
By: ________
Christy Bauer Senior Associate
cc: Garrett Simmons, Associate, Calderwood & Harkness LLP Alexandros Vournas, Managing Partner, Vournas & Theodorakis Dikigiriko Grafeio

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