Stonewin Sanctions Compliance Policy

Revised October 2024

1. INTRODUCTION; CORPORATE COMMITMENT STATEMENT

1.1. Stonewin is part of a privately owned oil trading group operating around the world. Please see Stonewin’s website for your reference (www.stonewin.org). The group’s primary focus is on the supply and trading of petroleum products to end-users across Europe, the Middle East, Asia, the USA, South America, and Africa.

1.2. Stonewin is committed to complying with all applicable laws and regulations governing economic sanctions, including export or import controls, embargos, trade restrictions, listing of persons or entities, asset freezing, or any other economic sanctions adopted by the United Nations, the United Kingdom, the European Union, any member state of the European Union, and the United States of America (“Sanctions”).

1.3. No business operations, including but not limited to government business, supply of marine fuels and trading, may be carried out contrary to Sanctions by any individual operating on behalf of Stonewin. Any violation of Sanctions infringes the values of Stonewin and could have serious reputational, financial and criminal consequences for Stonewin and the individuals involved. Any behaviour in violation of Sanctions will not be tolerated and may lead to disciplinary actions.

1.4. Stonewin does not carry out any business with high-risk countries such as North Korea, Iran, Cuba, Venezuela, Syria, Russia, Belarus and non-government-controlled areas of Ukraine.

1.5. Stonewin will take appropriate action against any employee or director whose actions are found to violate this SCP. Disciplinary action may also be taken against employees of Stonewin who knowingly fail to report such violations, or who retaliate against others who in good faith report such violations. Discipline may include actions up to and including the termination of employment or any business agreement or relationship with Stonewin.

1.6. Stonewin aims to ensure that any risks of non-compliance with Sanctions are detected early to mitigate and manage such risks to avoid Sanctions violations.

1.7. This Sanctions Compliance Policy (“SCP”) sets out the framework for how Stonewin aims to comply with Sanctions and is based on 7 core elements of compliance:

1. management commitment to compliance;
2. risk assessment;
3. organisation structure and responsibilities;
4. training and awareness raising;
5. sanctions screening procedures;
6. performance review, audits, reporting and corrective actions; and
7. recordkeeping and documentation.

1.8. The SCP applies to all directors and employees of Stonewin.

1.9. The purpose of the SCP is:

• to set out internal procedures and processes to ensure Stonewin complies with Sanctions; and
• to determine those responsible for ensuring the observance of such procedures and processes.

1.10. Stonewin will review this SCP on a regular basis and will introduce revisions where necessary or appropriate. Stonewin will implement all the necessary procedures, to ensure and validate on a regular basis, the proper adherence of this SCP by all employees and directors.

2. MANAGEMENT COMMITMENT TO COMPLIANCE

2.1. The management of Stonewin is committed to supporting the effective implementation of the measures set out in this SCP. This is done by allocating sufficient resources to Sanctions compliance, integrating Sanctions compliance into the daily operations of Stonewin, providing training to relevant employees, and fostering a culture of compliance throughout Stonewin by regularly communicating the compliance commitments of Stonewin.

2.2. The management of Stonewin expects all employees of Stonewin to comply with Sanctions. This obligation is stated as Stonewin’s Corporate Commitment Statement in paragraph 1.3 above and it is repeated in detail internally within Stonewin.

2.3. The management is overall responsible for supervising compliance with Sanctions. The day-to-day supervision of the business of Stonewin, including ensuring that all relevant employees are adequately trained to handle Sanctions compliance, is also the responsibility of the management.

2.4. To promote a culture of compliance throughout Stonewin, management will ensure employees know that they should report any violation or risk of violation of Sanctions.

2.5. In cases of violations or suspected violations of Sanctions, the management of Stonewin will take measures to identify the root cause of such violations or suspected violations, including what steps are needed to reduce such occurrences in the future.

3. RISK ASSESSMENT

3.1. This SCP applies a risk-based approach to Sanctions compliance and Stonewin will continuously monitor the risks of the business operations. The point of departure for the risk assessment is the industry in which Stonewin is providing its services (delivery of fuel to governments and defence institutions, supply of marine fuels and cargo trading). Stonewin carries out its business worldwide. Due to the international nature of Stonewin’s business and the customer base, Stonewin conducts careful due diligence.

3.2. Based on the risk assessment of Stonewin’s business operations, Stonewin has designed a sanctions screening procedure in the form of Standards of Procedure (“SOPs”), which contain steps to be undertaken by all relevant employees of Stonewin. The SOPs is a manual for screenings and due diligence, which describes the type of business the employees may and may not do.

3.3. The procedures explained in paragraph 3.2 are based on legal advice received from external lawyers.

3.4. In case of any changes to Stonewin’s business operations, including but not limited to areas of supply, customer locations, new business opportunities, etc., Stonewin will conduct a new risk assessment prior to undertaking any such new business.

4. ORGANISATION STRUCTURE AND RESPONSIBILITIES

4.1. The management is responsible for supervising on a day-to-day basis compliance with Sanctions and that the SOPs are implemented into the modus operandi of relevant employees.

4.2. The day-to-day compliance for each specific transaction as detailed in Section 6 is carried out by the employees in charge of the relevant transaction. A ‘relevant transaction’ could be the supply of marine fuel or entering into a charterparty. The management is responsible for making sure that the employees are equipped with skills necessary to carry out due diligence and that more complicated cases of due diligence are dealt with by the employees in consultation with Mrs Valeria Dovgaluka and/or Management.

4.3. The management will obtain legal advice from external lawyers when deemed necessary.

4.4. By signing an employment agreement with Stonewin employees confirm that they have received, read, understood, and undertake to comply with the SCP.

5. TRAINING AND AWARENESS RAISING

5.1. Stonewin is committed to ensuring that it has an adequate training program for all relevant employees of Stonewin, such as attending training courses and/or tailored internal or external seminars on Sanctions compliance.

5.2. When new Sanctions are adopted which could be relevant for Stonewin, the management will seek legal advice on the possible implications for Stonewin when deemed necessary. If external legal counsel is deemed necessary advice will be sought from external legal counsel.

5.3. Compulsory training will be provided to relevant employees on an ongoing basis. Training will include lessons learnt from performance reviews, audits, reporting and corrective actions.

5.4. Stonewin will ensure new employees receive adequate training in Sanctions compliance by implementing such training in the onboarding of new employees.

6. SANCTIONS SCREENING PROCEDURE

6.1. Stonewin conducts due diligence of its customers, suppliers and each transaction to make sure no Sanctions are being violated, including that any fuel is sourced in compliance with Sanctions. Due diligence is carried out by way of applying the business knowhow accumulated within Stonewin combined with sanctions screenings. The act of screening is the core element of this SCP.

6.2. Any new business partner is subject to a sanctions screening by Stonewin. This includes screening the business partner and its ultimate beneficial owners against the sanctions lists of the Office of Financial Sanctions Implementation (OFSI), the EU and the Office of Foreign Asset Control (OFAC), respectively. Existing customers are subject to screening on an ongoing basis depending on the risk profile of the customer and the closeness of the relation between Stonewin and the customer.

6.3. Before engaging in any transaction, Stonewin will conduct necessary due diligence to ensure the transaction complies with all Sanctions. The due diligence carried out is based on the risk of the transaction. Screenings are carried out using screening platforms, such as Dow Jones, Infospectrum, Sea live, Clarksons and Vesseltracker. In cases of bunker supplies, the due diligence includes recent port calls of the vessel receiving marine fuel, whether any signs of ‘AIS spoofing’ are noticeable, whether the cargo on board the vessel was loaded in or originates from any country that is subject to Sanctions and whether the vessel is destined for any country subject to Sanctions. In cases of chartering vessels and trading cargo, screenings are conducted to identify whether the business itself is subject to Sanctions or is owned or controlled by any party subject to Sanctions. The vessel in question is subject to a vessel vetting procedure, including an assessment of whether the vessel to be chartered has called ports recently in any country that is subject to Sanctions and whether the customer is seeking to carry cargo that originates in a sanctioned country and is to be loaded or discharged in any country. Stonewin further strives to detect any signs (‘red flags’) of sanctions circumvention. Stonewin has outlined the procedure for screening in the SOPs, including all questions and circumstances to consider as a part of such screening.

6.4. Sanctions screening is performed by means of collection of information and documents provided by Stonewin’s customers and business partners unless Stonewin knows or suspects that those customers and business partners, or the information provided, are unreliable or dishonest.

7. PERFORMANCE REVIEW, AUDITS, REPORTING AND CORRECTIVE ACTIONS

7.1. The management is committed to ensuring the effectiveness of the SCP and related SOPs by reviewing regularly that relevant employees act in accordance with the SCP, including that screening procedures are conducted in accordance with Section 6 of this SCP. Such reviews include random control checks as part of daily operations to ensure any wrongdoings are detected in an early stage.

7.2. The management is responsible for ensuring that this SCP operates effectively to ensure compliance with Sanctions. This will be done by way of audits checking that the SOPs operate adequately and efficiently to ensure the necessary due diligence is carried out. In cases of any weaknesses identified, the management is responsible for updating this SCP and/or the SOPs and the credit and compliance system. Such updating will be carried out with the assistance of external lawyers to ensure the SCP is adequate and operates efficiently and in accordance with Stonewin’s risk profile.

7.3. The management is responsible for ensuring that whistleblowing and escalation procedures are in place and that employees know how to report suspected or actual incidents of breaches of Sanctions.

7.4. Any change in Stonewin’s business, customer base or operations which may affect Stonewin’s risk profile will be communicated to the law firm assisting Stonewin with the compliance of Sanctions to make sure any necessary changes are made to this SCP.

8. RECORDKEEPING AND DOCUMENTATION

8.1. To ensure the effective implementation of the SCP and SOPs, Stonewin documents the screenings described in Section 6. Records are kept for at least 5 years.

8.2. Documented screenings will be used for auditing as described in paragraph 7.2. As part of auditing, the records will be inspected for completeness, accuracy and quality.