US lifts sanctions on Israeli firm in Iran sale

WASHINGTON – The United States is lifting sanctions it slapped on an Israeli holding company accused of selling an oil tanker to Iran, Israel's mortal enemy and the object of tightening U.S. and international sanctions over its disputed nuclear program.

The State Department issued a brief notice Tuesday, saying it is clarifying culpability for the 2010 sale.

The surprise U.S. move Tuesday followed months of lobbying on behalf of two Israeli brothers who were among that nation's richest men. The billionaire Ofer brothers claimed that the $8.5 million deal, small for their massive conglomerate, was conducted unwittingly with an Iranian shell company. Nonetheless, the company said it was embarrassed.

"This action clears our name," a statement from the Ofer firm said.

The State Department lifted penalties on the "Ofer Brothers Group," a corporate name applied to the brothers' vast holding company. The new notice adds sanctions against two other entities directly involved in the sale of the tanker Raffles Park, and leaves in place sanctions against an Ofer subsidiary based in Singapore. In all cases the State Department said the entities should have known who was actually buying the ship.

The Ofer conglomerate indirectly owns all three entities, but the family business itself is no longer listed as responsible for the sale.

The original sanctions applied in May had banned the Ofer brothers and their Singapore subsidiary from obtaining U.S. export licenses and American bank loans topping $10 million. The sanctions cast a pall on Ofer businesses around the world, in part because of confusion over the corporate name applied by the State Department. The Ofer family says there is no such entity.

The sanctions also caused an outcry in Israel, whose national security policy is heavily organized around Iran's declared intention to extinguish the Jewish state. The sanctions drew calls in Israel for an investigation when media reports suggested that the Ofers' ties with Iran might have been authorized by the Israeli government or linked in some way to Israeli intelligence operations.

Prime Minister Benjamin Netanyahu's office denied that the government had authorized the company's dealings.

The revised State Department notice means no Israeli firm is now held directly responsible for the sale.

The brothers did not live to see the news. Sammy Ofer died in June at 89, Yuli Ofer died last week at 87. The two Romanian emigres built a sprawling business empire that included holdings in international shipping, real estate, chemicals and banking. They divided up their assets in recent years, but media have reported their joint worth ranged from $4 billion to $10 billion.

"We are relieved that the U.S. State Department has made this important clarification," a statement from the family said Tuesday. "This is an important step forward."

Sammy Ofer, a shipping magnate and philanthropist, was listed last year by Forbes magazine as Israel's richest person and No. 109 in the world.

When the sanctions were applied, a spokesman for the Ofer companies had said that the conglomerate checked a U.S. government list of companies affiliated with sanctioned countries, including Iranian shell companies, before finalizing the tanker sale. The Ofers said the client, the United Arab Emirates-based Crystal Shipping, did not appear on the list.

The family hired lawyers and consultants to help show it was not directly involved.

The U.S. sanctions came at an embarrassing time. Netanyahu was in the U.S., winding up a strained visit to Washington in which he publicly differed with President Barack Obama over Mideast peacemaking. Throughout his visit, Netanyahu repeatedly voiced concerns about the Iranian nuclear program.

The Obama administration slapped sanctions on six other foreign companies at the same time in May, including Venezuela's state-owned oil company, claiming its dealings help fund Iran's nuclear program.

The State Department announced the penalties as the administration widened the scope of measures against firms that supply or transport refined petroleum products, including gasoline, to Iran. The penalties were part of new authority granted to the departments of Treasury and State to target companies involved in Iran's energy sector. Like earlier sanctions, these are designed to increase pressure on Iran to prove its nuclear program is peaceful, as it insists.