Neftaly Internal Audit for Export Controls in Holdings

Objective:
The purpose of the internal audit for export controls within Neftaly Holdings is to ensure that all subsidiaries and affiliated entities operate in full compliance with international and local export control regulations. This audit aims to identify potential risks, assess the effectiveness of existing control measures, and provide actionable recommendations to mitigate compliance breaches.

Scope:

• Review of all exports of goods, technology, software, and services from Neftaly Holdings’ subsidiaries.
• Assessment of adherence to international trade regulations, including but not limited to:
  • U.S. Export Administration Regulations (EAR)
  • International Traffic in Arms Regulations (ITAR)
  • European Union Dual-Use Regulations
  • Local export licensing requirements in operational jurisdictions
• Evaluation of internal policies, processes, and training programs related to export compliance.
• Examination of internal record-keeping and reporting practices to ensure traceability and audit readiness.

Audit Approach:

1. Risk Assessment:
   • Identify high-risk products, technologies, and markets.
   • Evaluate potential exposure to sanctions, embargoes, or restricted party lists.
2. Policy and Procedure Review:
   • Assess the comprehensiveness and clarity of current export control policies.
   • Evaluate alignment of internal procedures with regulatory requirements.
3. Transaction Testing:
   • Sample and review recent export transactions for compliance with licensing and documentation requirements.
   • Verify classification accuracy of controlled goods and software.
4. Training and Awareness:
   • Assess the effectiveness of employee training programs on export compliance.
   • Determine awareness levels among staff handling international shipments or technology transfers.
5. Reporting and Monitoring:
   • Evaluate mechanisms for reporting potential violations.
   • Review monitoring tools and dashboards for ongoing compliance oversight.

Key Audit Findings & Recommendations:

• Findings: Identification of gaps in licensing procedures, inconsistencies in documentation, or insufficient training coverage.
• Recommendations:
  • Enhance export control training programs for relevant personnel.
  • Strengthen classification and screening procedures for all outbound transactions.
  • Implement robust monitoring tools to flag high-risk transactions in real time.
  • Ensure comprehensive documentation retention to meet audit and regulatory requirements.

Conclusion:
The internal audit underscores Neftaly Holdings’ commitment to maintaining the highest standards of export compliance. By systematically reviewing policies, transactions, and staff awareness, the audit ensures that Neftaly mitigates regulatory risks, avoids potential sanctions, and reinforces its reputation as a responsible global operator.

Next Steps:

• Implement recommended corrective actions within defined timelines.
• Schedule follow-up audits to monitor progress and assess the effectiveness of improvements.
• Maintain continuous alignment with evolving international export control regulations.