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Sanctions-busted

Iran can’t shop at Costco any more

We’ve previously noted the scale of the business that continues with Iran despite US sanctions. But to stay on the right side of the law, some American companies are taking the opportunity to report every picayune transaction to the Securities and Exchange Commission (SEC), which is responsible for monitoring breaches. Good thing, too. Because it turns out that Iranian embassy staff in Japan were busily shopping at Costco’s 15 stores there.

The reports from US retailer Costco—flagged via the creatively dubbed IRANNOTICE, a special SEC form created just for this purpose—show that, during the first half of fiscal year 2013, the Embassy of the Islamic Republic of Iran in Japan held two memberships at the discount warehouse chain, known in the US for its wine selection, organic produce and bargain high-end meat. The cards were used by four employees to ring up a total of about $5,178 in merchandise or services over six months. No word on what they bought.

Iran’s critics may be happy to hear that both memberships have now been canceled, though not before the embassy spent another $319. All told, Costco estimates that it made $168 in profits from the memberships since the start of its fiscal year in September—a rather ascetic 3.05% profit margin on sales to the Islamic Republic.

Two Iran Air employees also had a card in the UK, where Costco has 24 stores, but haven’t been using it. Just to be on the safe side, Costco canceled that membership, too.

“The Company does not intend to continue these activities,” Costco concluded in its quarterly report.

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