Sanctions and Export Controls

1. Introduction, Purpose and Definitions

Grindrod Logistics in partnership with Maersk (Grindrod Logistics) is committed to complying with Sanctions and Export Controls laws. Grindrod Logistics may be held liable for activities on the part of its joint venture. This Commit Rule sets out the measures that Grindrod Logistics follows to identify, mitigate and manage its Sanctions and Export Controls risks in the jurisdictions in which it operates.

Grindrod Logistics Sanctions and Export Controls are complex and govern international trade.

This Rule contains actions and procedures required by Employees and anyone acting on behalf of Grindrod Logistics to ensure compliance with relevant Sanctions and Export Controls laws and international best practices.

This Rule forms part of the Sanctions and Export Controls Compliance Programme together with the Sanctions and Export Controls - Compliance Framework Guideline (“Guideline”).

The risk of each, even unintended, violation of Sanctions and Export Controls is significant in terms of fines, reputation, loss of business and brand. More serious Sanctions and Export Controls violations can cause authorities to impose audits, blacklist, penalise or sanction Grindrod Logistics, or deny it access to essential parts of equipment or government contracts. Individuals risk imprisonment for intentional violations.

For a full breakdown of the definitions, please refer to the downloadable document available at the end of this page.

2. Instructions for all Employees

2.1 Expectations and Responsibilities of Employees

It is the responsibility of all Employees to ensure Grindrod Logistics complies with Sanctions and Export Controls laws, this Rule and related standards and procedures. All Employees are required to seek advice from the Grindrod Logistics Legal & Compliance team if they have any questions or concerns pertaining to Sanctions and Export Controls. No Employee can engage in, allow other Employees to engage in, approve or tolerate any conduct that violates Sanctions and Export Controls laws, standards and procedures.

Grindrod Logistics Legal & Compliance team is tasked with oversight, implementation and/or operational responsibility of rolling out the Grindrod Logistics Sanctions and Export Controls Compliance Framework, as per the Sanctions and Export Controls Guideline, which includes providing standards and procedures, training and continuous advice.

Employees with management responsibility are accountable not only for their own actions but also for the conduct of their staff and anyone appointed to act on behalf of Grindrod Logistics. Each manager is at all times responsible for ensuring such compliance of their reports with Sanctions and Export Controls standards and procedures.

2.2 The Rule

2.3 Grindrod Logistics Compliance Framework

The Guideline on the Sanctions and Export Controls Compliance Framework has been designed to respond to the various Sanctions and Export Controls risks facing Grindrod Logistics. All Grindrod Logistics entities must implement the Framework to protect Grindrod Logistics and to prevent such violations.

2.4 Complying with Sanctions Requirements

Due to Grindrod Logistics’ global operations, it is subject to various Sanctions regimes, such as:

EU Sanctions

Maersk is incorporated under the laws of Denmark. Denmark is an EU member state. As a result, EU Sanctions therefore apply to Grindrod Logistics’ business globally, whether or not in the EU, including aircrafts and/or vessels.

Grindrod Logistics and its Employees are not permitted to have commercial or financial dealings with Restricted Parties subject to EU Sanctions or otherwise in violation of EU Sanctions.

Grindrod Logistics vessels may not carry cargo involving a Restricted Party on an EU Sanctions list without the approval of the Grindrod Logistics Compliance team.

UN Sanctions

Grindrod Logistics is incorporated under the laws of South Africa. South Africa is an UN member state. As a result, UN Sanctions therefore apply to Grindrod Logistics’ business globally, whether or not in South Africa, including aircrafts and/or vessels.

Grindrod Logistics and its Employees are not permitted to have commercial or financial dealings with Restricted Parties subject to UN Sanctions or otherwise in violation of UN Sanctions.

Grindrod Logistics vessels may not carry cargo involving a Restricted Party on an UN Sanctions list. Grindrod logistics requires its employees to take sanctions risks and requirements into consideration and to immediately report any concerns to the Legal and Compliance team.

US Sanctions

The US, via OFAC, imposes Sanctions whereby US Persons may not do business, or where US financial instruments (for example, US dollars or US banks), may not be used to facilitate transactions with a Restricted Party.

Maersk US companies and Grindrod Logistics US Employees are both US Persons and thus are not permitted to have commercial or financial dealings with Restricted Parties listed by the US authorities, parties that are known to be owned or controlled by a Restricted Party or otherwise in violation of US Sanctions. Grindrod Logistics may have such dealings, if legal, with prior approval from Grindrod Logistics Compliance Team and subject to no US Person, US dollars or US banks being party to or involved in such dealings. This is also provided that no secondary sanctions apply to the relationship or transactions. Secondary sanctions are those that target non-US parties to penalty by the US government for doing business with US sanctioned parties or countries, even where such business has no US ties to it.

US Sanctions apply to the following activities:

Secure, source, canvass or promote any business or business activities within Grindrod Logistics for an external company, supplier or contractor where such employee stands to gain directly or indirectly as friends, family, or in any other way which may be deemed to be personal or unethical.

• performed within, or undertaken from, the US (persons of any nationality while in the US);

• involving US Persons wherever located (including but not limited to approval or facilitation by such US Persons);

• involving US companies organised under US law and/or their foreign branches (foreign companies that are owned or controlled by US Persons are also subject to US Sanctions);

• involving US flagged or owned vessels;

• involving goods, services, software or technology subject to US law (i.e. US-origin items as well as foreign-made items containing more than the minimum amount of controlled US content), even if no US Person or US company is involved in the transaction; and

• involving US currency (because US dollar transfers generally clear through the US financial system even if the sender and the recipient are non-US Persons) or US banks (even if US currency is not involved).

Neither US banks nor US dollars may be used in any transactions involving a Highly Sanctioned Country. This includes payments to or receipts from any parties involved in such transactions, even if they are not in a Highly Sanctioned Country.

Grindrod Logistics US Person Employees must inform their managers and consult with Grindrod Logistics Compliance team if their work may involve a Restricted Party listed by US authorities or a Highly Sanctioned Country. In addition, they must immediately withdraw themselves from any discussions or decisions relating to such transactions.

Grindrod Logistics US Person Employees may only travel to Highly Sanctioned Countries on business with the approval of the Grindrod Logistics Compliance team.

Grindrod Logistics US flagged/owned vessels may not call ports in Highly Sanctioned Countries, carry cargo owned by a Restricted Party listed by the US authorities or originating from or bound for a Highly Sanctioned Country, other than with Grindrod Logistics Legal & Compliance team prior approval. Also, US leased containers may not be used in trade involving the Highly Sanctioned Countries.

2.5 Transacting with Highly Sanctioned Countries and High Risk Countries

The countries against which the EU and the US impose comprehensive Sanctions are called the “Highly Sanctioned Countries”. The countries against which the EU and the US impose significant, but not comprehensive Sanctions are called the “High Risk Countries”.

Any new, planned or actual dealing with Highly Sanctioned Countries or High Risk Country must immediately be reported to the Grindrod Logistics Legal & Compliance team for review. No dealings with such countries will commence or proceed without approval from the Grindrod Logistics Legal & Compliance team following their review. Refer to the Sanctioned Country List or other specific instructions on certain countries subject to Sanctions on the Grindrod Logistics Intranet.

2.6 Transacting with Highly Sanctioned Countries and High Risk Countries

Shipments and transactions to countries bordering a Highly Sanctioned Country or High Risk Country, so called neighbouring countries, must be treated as high risk shipments if there is any link to a Highly Sanctioned Country or High Risk country. If such link is established the shipment or transaction must be immediately flagged to Grindrod Logistics Legal & Compliance team for approval.

2.7 Sanctions Screening

It is Grindrod Logistics’ obligation to check if a Third Party with whom Grindrod Logistics wants to do business with is on a Restricted Party list. This includes Grindrod Logistics’ customers, vendors and banks. If confirmed, the relationship cannot be entered into, and if existing it must be suspended with immediate effect until approved by Grindrod Logistics Legal & Compliance team. If not approved, the relationship cannot be established and if existing must be terminated.

2.8 Grindrod Logistics Compliance Framework

Export Controls regulations cover the actions required to identify items that are subject to export/import and re-export restrictions or prohibitions and whether licenses or other approvals are required when Grindrod Logistics exports/imports them from one country to another. Exports/imports do not only take place from Grindrod Logistics to a Third Party but also within Grindrod Logistics. For example, when one terminal or Inland Services company exports an item to another terminal or company in another country or when spare parts are sent from a warehouse to a Maersk vessel.

It is the responsibility of Grindrod Logistics and its customers that are engaging in export-controlled transactions to ensure that all required licenses or approvals are in place and that the necessary licenses are obtained with the support of the Grindrod Logistics Legal & Compliance team.

Export of Military and Dual-Use items

Export of Military and Dual-Use items require prior authorisation from the authorities of the exporting and/or importing country. In addition to the Export Controls regulations, Sanctions regulations may impose further restrictions on exports/imports of Military and Dual-Use items. Grindrod Logistics Legal & Compliance team must approve an export or re-export of an item considered to be a Military or Dual-Use item.

When Grindrod Logistics is acting as a transporter, it is the party exporting items that must obtain required export (or re-export) licenses. At times, Grindrod Logistics as carrier/transporter may need a license in addition to the ordinary export and import licenses to carry/transport a Military or Dual-Use cargo. Grindrod Logistics Legal & Compliance team or its designee must approve and apply for such additional license.

Illegal Wildlife Trade

Grindrod Logistics has a zero-tolerance policy towards illegal wildlife trade. Grindrod Logistics will not facilitate or tolerate any shipment or service involving wildlife or wildlife products, where such trade is contrary to the Convention on International Trade in Endangered Species of Wildlife Fauna and Flora (CITES) and is as such illegal under international and national laws.

2.9 Written Agreements

The engagement of a Third Party by Grindrod Logistics requires a prior written agreement. The agreement shall include the Grindrod Logistics Standard Compliance Clause, containing at least a Sanctions and Export Controls Clause. Material deviations require approval by the Grindrod Logistics Legal & Compliance team.

2.9.1 Books and Records

Employees are prohibited from making any false or misleading statements in Grindrod Logistics Books and records for any reason and must ensure that records reflect the true nature of the transaction and shipments.

All transactions must be correctly approved and coded to the correct expense description and based on Grindrod Logistics’ accounting rules and guidance.

2.9.2 Third Parties

Grindrod Logistics cannot do through Third Parties what it is not permitted legally to do itself. When Grindrod Logistics engages any Third Party, the following requirements for Third Party engagement must be complied with:

An integrity screening must be performed on Third Parties who interact on our behalf with Government officials, or procure business on our behalf (for example, an agent). Red flags must be addressed, and mitigating measures implemented if required. Compliance approval is required before engaging with any such Third Parties.

At a minimum, the Third Party should be reputable and compatible with the Grindrod Logistics Governance, Policies and Procedures and the Grindrod Logistics Code of Conduct and governing approval authority levels that may apply within the business.

2.9.3 Compliance Declaration

On a regular basis, Grindrod Logistics will as part of its Compliance controls require a selected group of Employees to sign a “Compliance declaration” that they comply with this Rule.

2.9.4 Indemnification

Individuals who violate Sanctions and Export Controls laws may face criminal prosecution potentially resulting in prison sentence, monetary fines or other governmental action. Companies such as Grindrod Logistics may not indemnify their Employees against liability under these laws, which means that penalties can be levied against individuals without reimbursement by Grindrod Logistics or an insurer. This is also applicable to Employees who are no longer employed at Grindrod Logistics in respect of past conduct, while employed at Grindrod Logistics.

2.9.5 Interaction with Regulators and Authorities

All contact with regulators and authorities in respect of Sanctions or Export Controls inquiries or investigations must be done in conjunction with Grindrod Logistics Legal & Compliance team.

The Legal & Compliance team must be notified of any Sanctions and Export Controls investigations (instigated internally or externally) or visits/raids by a regulatory authority.

2.9.6 Reporting Obligations and Disciplinary Action

Grindrod Logistics will not tolerate the dishonest or unlawful achievement of results by any Employee, whether directly or via a Third Party. A violation of this Rule may result in disciplinary action.

No Employee will be penalised or be subject to other adverse consequences for refusing an action that could lead to a Sanctions and Export Controls violation, even if it may result in Grindrod Logistics and/or any of its subsidiaries or shareholders losing business. Any actions to the contrary (retaliation or adverse consequences) should be reported as per the paragraph below.

Any violation or suspected violation of Sanctions and Export Controls laws or this Rule, must be reported immediately to any of the following:

• Your manager; or

• Any member of the Grindrod Logistics Legal & Compliance team; or

• The Grindrod Logistics Whistle-blower System (Whistleblower Reporting at Maersk | Speak Up Securely |Maersk); or

• Any member of the Grindrod Logistics Executive Committee.

Failure to report a violation constitutes a violation of the Rule.

3. Instructions for Specific Functions, Departments, Geographies and Brands

In addition to the Rule, relevant instructions for specific functions, departments, geographies and brands are set out in the governing approval authority levels that may apply within the business.

Guideline – Sanctions and Export Controls Compliance Framework

Click here to download the full policy.