The United States narrowed sanctions applied over an oil tanker sold to Iran last year by affiliates of an Israeli holding company, saying Tuesday that the affiliates should have known better. The sale caused an outcry in Israel, which counts Iran as its mortal enemy and has urged strong international trade and financial sanctions to restrict Iran's lucrative oil business and international trade.
The State Department issued a brief notice Tuesday clarifying culpability for the 2010 sale. A family conglomerate run by billionaire brothers who were probably Israel's most recognizable tycoons is no longer listed. However, three corporate entities indirectly owned by the group are subject to U.S. sanctions for their role in a deal that sullied the family name.
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 Ofer family firm said 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 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.
Word of the move came on the day of Yuli Ofer's funeral.
U.S. officials said the action was meant to provide guidance to banks and companies that did not want to run afoul of U.S. sanctions.
State Department spokeswoman Victoria Nuland said the original sanctions announcement in May "led to the conclusion by some banks and companies that we had intended to sanction all Ofer-owned companies. Our intent was to sanction the specific entities in the Sammy Ofer shipping organization that were responsible for providing a tanker to Iran. "
The sanctions 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 new action removes penalties on the "Ofer Brothers Group," a corporate name the State Department applied to the brothers' vast holding company. In its place the State Department added sanctions against two other entities directly involved in the sale of the tanker Raffles Park. It left in place sanctions against a third affiliate.
In all cases the State Department said the entities should have known who was actually buying the ship.
The original sanctions had banned the Ofer brothers and their Singapore affiliate Tanker Pacific 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.
"We are relieved that the U.S. State Department has made this important clarification," a statement from the Ofer 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.