Compliance

Sanctions Policy

Fontana Trading Europe, Sociedade Unipessoal Lda. and its subsidiaries do not knowingly conduct business with any person, entity, vessel or jurisdiction that is subject to economic or trade sanctions imposed by the European Union, the United Kingdom, the United States or the United Nations Security Council. This policy sets out how we operationalise that commitment.

1. Applicable sanctions regimes

• European Union — sanctions adopted under the Common Foreign and Security Policy, including Council Regulations enforcing asset freezes and sectoral restrictions. Consolidated list maintained by the European External Action Service.
• United Kingdom — sanctions administered by the Office of Financial Sanctions Implementation ("OFSI") under the Sanctions and Anti-Money Laundering Act 2018.
• United States — sanctions administered by the Office of Foreign Assets Control ("OFAC"), including SDN list, sectoral sanctions (SSI list) and country-based programmes. We apply US sanctions on all US-dollar-denominated transactions, all transactions involving US persons or US financial institutions, and where our banking partners require it.
• United Nations — sanctions imposed under UN Security Council Resolutions.
• Portugal — additional national restrictions where they exist.

2. Comprehensively sanctioned jurisdictions

As at the date of this policy, Fontana does not originate from, sell into, or route cargo, payments or documents through the following jurisdictions save under the narrow humanitarian or general-licence exemptions expressly permitted by the applicable regime and after Head of Compliance approval:

• Russia (including Crimea, Donetsk, Kherson, Luhansk, Zaporizhzhia and any other Ukrainian territory occupied by the Russian Federation).
• Belarus.
• Democratic People's Republic of Korea.
• Iran.
• Cuba.
• Syria — subject to case-by-case review as EU, UK and US sanctions and general-licence positions continue to evolve.

Sectoral sanctions (for example on ports, vessels, oil-related entities or specified banks) apply in addition and are checked at transaction level. This list is reviewed at least quarterly against the current position of each authority.

3. Screening at three checkpoints

When	What we screen
Onboarding	Counterparty legal name, trading names, all beneficial owners at 10% or above, all listed directors and officers, registered and operating addresses, bank details
Pre-transaction	All parties on the shipping documents: buyer, notify party, consignee, freight forwarder, shipping line, vessel (IMO number), master, charterer, terminal operator, port of discharge, ultimate destination
Ongoing	Quarterly bulk re-screening of the full counterparty book plus real-time daily delta checks against updated lists

Screening uses an automated tool sourced from a recognised provider, matched against the consolidated EU list, OFAC SDN and consolidated non-SDN lists, HM Treasury Consolidated List, UN Consolidated List, and the CTF/PEP overlay. Vessels are also checked against the OFAC/Kharon and Lloyd's List Intelligence sanctions overlays for dark-fleet or shadow-fleet indicators.

4. Match handling

Any positive match — including partial name matches, phonetic matches or matches at the address level — triggers automatic hold. No cargo moves, no invoice is raised, no payment is released while a match is under investigation. The Head of Compliance:

1. Confirms whether the match is a true hit or a false positive within 24 hours.
2. Where the hit is true: refuses the transaction and terminates the counterparty relationship, reports to the applicable authority (OFSI, OFAC, EU competent authority, Banco de Portugal) where reporting is required, and quarantines any funds already received.
3. Where the hit is a false positive: records the reasoning, whitelists the specific data point with justification, and unblocks.

5. Vessel due diligence

Bulk grain trades cannot be sanction-safe if the vessel is not. For every FOB or CIF fixture we verify:

• Vessel IMO number screening against sanctions lists.
• Beneficial ownership of the vessel (registered owner, group beneficial owner, disponent owner).
• Flag state (with heightened scrutiny for flags of convenience associated with sanctions evasion).
• P&I club membership.
• Automatic Identification System (AIS) history for the prior 24 months, looking for unexplained dark periods, port calls to sanctioned jurisdictions, or ship-to-ship transfers outside recognised zones.

Any vessel with unexplained AIS gaps in the past 24 months is declined unless the operator provides a satisfactory explanation supported by evidence, subject to Head of Compliance sign-off.

6. Payment routing

Payment instructions that do not match the counterparty's KYC-recorded bank account require Head of Compliance approval. Third-party payments and payments through jurisdictions unconnected to the trade route are prohibited absent a documented and verified commercial reason. USD transactions are subject to correspondent-bank sanctions clauses and OFAC screening at the banking layer as well as ours.

7. Contract clauses

Fontana includes a sanctions warranty and termination clause in every trade contract. The clause requires the counterparty to represent that neither it, its beneficial owners, nor the ultimate destination of the cargo is subject to sanctions, and grants Fontana the right to terminate without penalty if that representation ceases to be true.

8. Training and governance

All staff involved in origination, trading, settlement, operations or finance complete sanctions training on joining and every 12 months thereafter. The Head of Compliance reports quarterly to the CEO on: screening volumes, matches identified, matches cleared, matches escalated, list updates absorbed, and any regulatory reporting made.

9. Reporting suspected breaches

Any employee, counterparty or third party who believes a Fontana transaction may involve a sanctioned party is required — or, in the case of third parties, encouraged — to report to compliance@fontana.trade or through the confidential channel described in the Anti-Bribery Policy. Reports may be made anonymously. Retaliation against any person making a good-faith report is a dismissible offence.