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PayPal sanctions violations lead to $7.7M fine

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PayPal sanctions violations lead to $7.7M finePayPal has agreed to pay a $7.7 million fine due to its violation of sanctions. The US does not let companies like PayPal effectively do business with citizens of certain countries, but PayPal was facilitating the transfer of money to sanctioned areas. Until 2013, there was no effective transaction screening process at PayPal. That led to around $40,000 in bad transactions going through. As much as $7,000 in transactions went over PayPal to Kursad Zafer Cire, a Turkish man who is said to be in the black market for nuclear weapons.

To deal with this particular issue in 2011, PayPal implemented a short-term fix that ended up being ineffective. It took until 2013 for any real screening policy and process to be in place, thereby catching other disallowed transactions.

The Treasury Department settled with PayPal after it found a “long term solution” had been lacking for such an extended period of time. Eventually, the solution was to begin “screening live transactions against OFAC’s List of Specially Designated Nationals and Blocked Persons (the “SON List”) and an expanded version of PayPal’s list of sanctions-related keywords.”

Reports have recently stated the Treasury Department is looking at more non-bank financial companies like PayPal to catch issues such as sanctions violations.

Via [Ars Technica]

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