HSO CONSORTIUM OFAC + VENEZUELA COMPLIANCE POLICY

01. PURPOSE AND SCOPE

This OFAC + Venezuela Compliance Policy (hereinafter, "the Policy") establishes the principles, controls, and responsibilities governing the operations of HSO Consortium (hereinafter, "the Consortium") in relation to the sanctions regime administered by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury, as well as applicable laws of the Bolivarian Republic of Venezuela, in particular the Hydrocarbons Law (2026 reform) and the Organic Law on Protection of Personal Data (LOPDP).

The purpose of this Policy is to demonstrate, in a clear and auditable manner, that the Consortium operates under a robust compliance architecture that allows it to:

• Negotiate and enter into Contingent Contracts under OFAC General License 49A without the need for an individual license.
• Transition to full operation by obtaining specific licenses aligned with General Licenses 48A and 50A.
• Absolutely prohibit any transaction, association, or communication with sanctioned persons, entities, or jurisdictions (China, Russia, Iran, North Korea, Cuba).
• Comply with Venezuelan laws on hydrocarbons, data protection, and computer crimes.

1.1. Scope

This Policy applies to:

• All members of the Consortium (Venezuelan Adherent Companies and HSO Petroleum Service).
• All employees, contractors, and agents acting on behalf of the Consortium.
• All negotiations, Contingent Contracts, collaboration agreements, and operational activities (once a specific license is obtained).
• The website https://www.hsoconsortium.com and any information systems used by the Consortium.

1.2. Relationship with other documents

This Policy complements and must be read together with:

• HSO Consortium Work Framework and Internal Regulations.
• Privacy Policy, Cookie Policy, Anti-Phishing and Information Security Policy, and HSO Petroleum Service Customer Commitment Policy.

02. LEGAL BASIS: U.S. SANCTIONS REGIME AND VENEZUELAN LAWS

2.1. Office of Foreign Assets Control (OFAC)

The Consortium is governed by the following General Licenses and executive orders, effective as of 2026:

2.2. Applicable Venezuelan legislation

The Consortium also complies with the following Venezuelan laws:

• Constitution of the Bolivarian Republic of Venezuela (arts. 28 and 60): Right to habeas data, privacy, and intimacy.
• Hydrocarbons Law (2026 reform): Regulates investment, exploration, production, and commercialization of hydrocarbons, including contract modalities with PDVSA and Mixed Companies.
• Organic Law on Protection of Personal Data (LOPDP): Establishes principles of lawfulness, consent, security, and data subject rights.
• Infogobierno Law: Regulates the use of information technologies in public and private registries.
• Special Law against Computer Crimes: Criminalizes unauthorized access, phishing, and computer sabotage.

03. CONSORTIUM'S COMPLIANCE ARCHITECTURE

3.1. Guiding principles

• Zero tolerance for sanctions violations: No transactions will be conducted with persons, entities, or jurisdictions listed on OFAC's Specially Designated Nationals (SDN) List, nor with China, Russia, Iran, North Korea, or Cuba.
• Mandatory suspensive condition: Every Contingent Contract will include a clause making material performance conditional upon obtaining a specific OFAC license.
• Transparency and due diligence: Rigorous KYC, AML, and sanctions list screening processes will be applied to all counterparties, partners, and members.
• Separation of phases: Activities permitted under GL 49A (negotiation and execution) are strictly separated from material performance, which only begins after a specific license is obtained.
• Unified control: HSO exercises hierarchical leadership and exclusive representation before OFAC, the U.S. Department of the Treasury, and the U.S. Department of State.

3.2. Internal compliance bodies

3.3. Exclusive powers of HSO in compliance matters

• OFAC liaison: Only HSO may officially communicate with OFAC, the U.S. Department of the Treasury, and the U.S. Department of State to request specific licenses, comfort letters, and file mandatory reports (10-day and 90-day reports).
• Execution of Contingent Contracts: Only the Executive Directorate (HSO) may negotiate and sign Contingent Contracts on behalf of the Consortium.
• Financial administration: HSO manages centralized accounts and ensures that no payment violates E.O. 14373 (payments through Foreign Government Deposit Funds).

04. ABSOLUTE RESTRICTIONS AND PROHIBITIONS

In strict compliance with GL 46B, 48A, and 49A, HSO Consortium will not engage in, nor permit its members or agents to engage in, the following activities:

05. DUE DILIGENCE AND VERIFICATION PROCESSES

5.1. KYC / AML / Sanctions Screening

Before accepting any new member, business partner, or counterparty (including PDVSA, Mixed Companies, IOCs, or crude buyers), the Compliance Committee must:

Collect the following information:

• Full name, country of incorporation, and tax identification number.
• Ultimate beneficial owners (UBO) with >5% participation.
• Copy of sector licenses or permits (if applicable).

Screen against the following lists:

• OFAC SDN List.
• EU sanctions lists (as additional reference).
• Politically Exposed Persons (PEP) lists and financial crime databases.

Document the results in a due diligence report, which will be retained for at least 5 years.

5.2. Vessel and logistics verification

For any operation involving maritime transport (crude oil purchase, equipment supply), the following must be obtained:

• The vessel's IMO number.
• Verification that the vessel is not on the SDN List or any OFAC sanctions list.
• Confirmation that the vessel's flag does not belong to a prohibited jurisdiction (China, Russia, Iran, North Korea, Cuba).

5.3. Ongoing monitoring

• Screenings will be repeated periodically (every 90 days) and upon any change in the counterparty's status.
• HSO Insight software is used for real‑time monitoring of product traceability and financial flows.

06. MANDATORY CONTRACTUAL CLAUSES

6.1. OFAC suspensive condition (Condition Precedent)

"Performance, material execution, and disbursement of funds under this contract are expressly and strictly conditioned upon the prior obtaining of a specific authorization or license from the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury."

6.2. Governing law and jurisdiction (for the operation phase)

"This contract shall be governed by the laws of the State of New York and the federal laws of the United States. Any dispute arising out of this contract shall be resolved exclusively by the federal or state courts located in New York City, or through binding arbitration under the rules of the International Chamber of Commerce (ICC), with the seat in New York."

6.3. Prohibition of sanctioned counterparties

"The parties hereby declare under oath that they are not blocked persons or entities by OFAC, nor are they located or organized under the laws of China, Russia, Iran, North Korea, or Cuba. Any breach of this declaration shall result in immediate termination of the contract with no liability to the complying party."

6.4. Payment channeling (E.O. 14373)

"Any payment due to PDVSA, the Venezuelan Government, or any blocked entity shall be made exclusively through the Foreign Government Deposit Funds designated by the U.S. Department of the Treasury, in accordance with Executive Order 14373."

07. REGULATORY REPORTING AND INFORMATION OBLIGATIONS

7.1. Reports to OFAC and other U.S. agencies

7.2. Internal reports and audits

• The Compliance Committee will prepare a quarterly report for the Strategic Committee.
• An independent external audit on sanctions compliance will be conducted annually.
• Any employee or Consortium member may report suspected violations to legal@huronsmithoil.com (anonymous ethics hotline).

08. CONSEQUENCES OF NON-COMPLIANCE

• Immediate investigation by the Compliance Committee.
• Temporary suspension of participation in the Consortium and access to systems.
• Permanent termination of the HSO Consortium Agreement and exclusion from the Consortium, in case of a material violation (transaction with a sanctioned country, falsification of documentation, omission of regulatory reports).
• Reporting to authorities (OFAC, U.S. Department of the Treasury, Venezuelan Public Prosecutor's Office) depending on severity.
• Joint liability for damages caused to the Consortium or third parties.
• HSO Consortium reserves the right to initiate civil and criminal legal actions against violators, under U.S. laws (including the International Emergency Economic Powers Act, IEEPA) and Venezuelan laws (Special Law against Computer Crimes, Criminal Code).

09. TRAINING AND AWARENESS

• All employees of HSO and adhering companies involved in negotiations, contracts, or financial management.
• Legal representatives and authorized agents.
• Training will cover: Identification of red flags, reporting procedures, updates on changes to OFAC general licenses and Venezuelan legislation.
• Attendance and evaluation records will be maintained.

10. POLICY UPDATES

• Reviewed at least annually.
• Updated when material changes occur in: OFAC General Licenses or Executive Order 14373, Venezuela's Hydrocarbons Law, Consortium's structure.
• Amendments communicated to all members and published on https://www.hsoconsortium.com with 30 days' notice where possible.

11. COMPLIANCE CONTACT INFORMATION

CONTROLLED DOCUMENT – This OFAC + Venezuela Compliance Policy forms an integral part of the HSO Consortium Work Framework and Internal Regulations. Non-compliance may result in contractual and legal sanctions.