JERUSALEM—An Israeli company sanctioned by the U.S. for selling an oil tanker to Iran tried to clear its name Wednesday, saying it did business unwittingly with an Iranian shell company.
The punishment raised eyebrows in Israel -- a country that considers Iran's nuclear program an existential threat, and where the sanctioned company, the Ofer Brothers Group, holds a dominant position in the economy.
Ofer Brothers spokesman Motti Scherf told Israel Radio the company checked a U.S. government list of companies affiliated with sanctioned countries, including Iranian shell companies, before finalizing the $8.5 million sale last September. He said the client, the United Arab Emirates-based Crystal Shipping, did not appear on the list.
In February, Scherf said, the company "received an indication that this sale was more complex and problematic than what we thought at first." He said the sale has been under U.S. investigation for the past few weeks,
The sanctions were still "embarrassing" and "stunned" the company, he said.
Scherf said Ofer Brothers did not act maliciously and is discussing the issue with the Obama administration. He said he is optimistic the company will be removed from the group of U.S. sanctioned companies.
Brothers Sammy and Yuli Ofer own Zim Israel Navigation Ltd., among the world's largest shipping companies, and own shares in Israel Corp., Israel's largest holding company, with interests in fertilizers, chemicals, energy and transportation. Sammy Ofer, 84, is one of Israel's richest men, with a net worth in the billions.
The Obama administration slapped sanctions on six other foreign companies Tuesday, 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.
President Barack Obama signed an executive order Monday giving the departments of Treasury and State more leeway in targeting companies involved in Iran's energy sector in order to increase pressure on Iran to prove its nuclear program is peaceful, as it insists.
The Israeli company, along with Tanker Pacific of Singapore, are accused of failing to exercise due diligence in participating in the 2010 sale of an oil tanker to the Iranian national shipping company, which already is under U.S. and European sanctions. The two firms are now barred from getting loans of more than $10 million from American banks and from getting U.S. export licenses.
Scherf, the Ofer Brothers Group spokesman, said it was difficult to track which companies are affiliated with Iran. He claimed that the moment that Iranian shell companies are added to the U.S. government's list, which can be seen online, they change their names and website domains.
Yigal Palmor, an Israeli Foreign Ministry spokesman, said Israel outlaws business with countries under U.S. commerce sanctions, but would not comment on sanctions against the Ofer Brothers Group, saying only that the ministry was "studying the issue."
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Associated Press writer Matthew Lee in Washington contributed to this report.
