Thursday, May 26, 2011

US State Department Sanctions Shipping Companies Over Iran

Ofer Brothers Denies Deliberately Selling Tanker to Rogue State
Shipping News Feature

USA / IRAN / UK / UAE / SINGAPORE / ISRAEL / VENEVUELA / MONACO – The announcement by the US State Department that it has imposed sanctions upon seven shipping and associated companies continues to cause consternation amongst both the boards of those organisations affected and in the wider world of national politics.

On Tuesday the State Department identified Petrochemical Commercial Company International (PCCI) (Jersey/Iran), Royal Oyster Group (UAE), Speedy Ship (UAE/Iran), Tanker Pacific (Singapore), Ofer Brothers Group (Israel), Associated Shipbroking (Monaco), and Petróleos de Venezuela (PDVSA) (Venezuela) of violating the Iran Sanctions Act and announced that these companies will face a range of sanctions as punishment.

PCCI, Royal Oyster Group and Speedy Ship are accused of being ‘…among the largest current suppliers of refined petroleum products to Iran and all three regularly engaged in deceptive practices in order to ship these products to Iran and evade U.S. sanctions.’

The sanctions they face include being prohibited from U.S. foreign exchange transactions, U.S. banking transactions, and all U.S. property transactions.

Israeli-based Ofer Brothers, one of the world’s biggest privately-owned shipping interests, in combination with Tanker Pacific and Associated Shipbroking of Monaco, are accused of arranging the sale in September 2010 of the tanker Raffles Park, valued at $8.65 million, to the Islamic Republic of Iran Shipping Lines (IRISL), which is alleged to be heavily involved in supporting Iran's nuclear and weapon proliferation activities.

In a statement the State Department said that:

‘We believe that Tanker Pacific and Ofer Brothers Group failed to exercise due diligence and did not heed publicly available and easily obtainable information that would have indicated that they were dealing with IRISL. The Secretary will hold companies accountable, as required by the ISA, when they know or “should have known” they were providing sanction able goods or services to Iran. With the imposition of today’s sanctions, Tanker Pacific and Ofer Brothers Group are barred from securing financing from the Export-Import Bank of the United States, from obtaining loans over $10 million from U.S. financial institutions, and from receiving U.S. export licenses.’

‘Associated Shipbroking knowingly acted on behalf of an IRISL front company. Accordingly, with the imposition of today’s sanctions, Associated Shipbroking is now prohibited from U.S. foreign exchange transactions, U.S. banking transactions and all U.S. property transactions.’

Additionally, Petróleos de Venezuela (PDVSA), the state-owned oil company of Venezuela, is stated to have delivered at least two cargoes of reformate, a blending component that improves the quality of petroleum, to Iran between December 2010 and March 2011.

PDVSA is now forbidden from competing for U.S. government procurement contracts, from securing financing from the Export-Import Bank of the United States, and from obtaining U.S. export licenses, though not in regard to the export of crude oil to the United States.

The State Department’s actions and accusations have engendered strong denials from both Ofer’s and its subsidiary Tanker Pacific, the latter company stating that they had cooperated fully with the US Governments requests for information regarding the sale of the Raffles Park and were ‘startled’ by the revelation and subsequent sanctions.

Tanker Pacific further stated that they: ‘…assured the American authorities that all appropriate action was taken at the time of the transaction to ascertain that the parties involved were not connected to the Iranian shipping company, IRISL, or any other entity subject to sanctions. It is Tanker Pacific’s firm policy not to transact with any such parties.’

Meanwhile, PDVSA’s boss Rafael Ramirez, who also happens to be Venezuela’s Energy and Petroleum Minister, was less diplomatic.

"The imperialists can go to hell. Their sanctions mean nothing us. No one is going to impose this kind of action against us," he said.

The involvement of Ofer Brothers has also caused a storm in Israel. The company controls Zim Integrated Shipping Services, effectively the shipping company of the State of Israel, as well as a controlling 53% stake in Israel Corp., the country’s biggest largest holding company.

Now there are growing calls for the Israeli government to launch an investigation into the allegations to find if there is a link between one of Israel’s biggest corporations and Iran. The Ometz organisation, a ‘watchdog’ collective committed to ensuring the moral principles of the State of Israel, has written a letter to the country’s Attorney General demanding action on the grounds that:

“In light of the centrality and importance of the Ofer Brothers’ holdings to the Israeli economy, and in light of the published information on Ofer Brothers’ ownership of companies registered in other countries, Ometz believes that it is important that the police investigation include trade activities of Israeli companies owned by the Ofer brothers with non-Israeli companies to see if they have been used, either directly or indirectly, to transfer goods or information to countries with whom trade is forbidden by Israeli law.”

With the ever-present stresses in the Middle-East gradually rising due to social upheaval in the Arab world and accusations of large-scale arms smuggling on the part of the Iranian government, this involvement by Ofer Brother’s with one of Israel’s sworn enemies’ looks to be leading to tough questions for the company.