PayPal To Pay $7.7 Million To Settle US Sanctions Violations

PayPal To Pay $7.7 Million To Settle US Sanctions Violations
Image from Flickr by < a href=""> Phil Campbell
Paypal  Phil Campbell PayPal To Pay $7.7 Million To Settle US Sanctions Violations
Image from Flickr by Phil Campbell

Electronic payments company Paypal has agreed to pay $7.7 million settlement over various sanctioned programs, according to a statement by the U.S. Treasury Department on Wednesday.


The settlement, which amounts to exactly $7,658,300, pertains to 486 “apparent violations” Paypal has committed. Owned by eBay Inc., the company has allegedly neglected its process of screening transactions for U.S. sanctions target through the year 2013.

“As a result of this failure, PayPal did not screen in-process transactions in order to reject or block prohibited transactions pursuant to applicable U.S. economic sanctions program requirements,” the U.S. Treasury Department said in its statement.

It was revealed that between October 2009 and April 2013, in a separate incident, Paypal had processed a total of 136 transactions that cost $7,091.77 to or from one of the accounts registered to an individual belonging to the List of Specially Designated Nationals and Blocked Persons of the Office of Foreign Assets Control (OFAC).

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Paypal’s interdiction software had failed to identify Turkish national Kursud Zafer Cire, who is linked to weapons of mass destruction. The statement further said that employees cleared name matches against the Paypal account of Cire on six separate but similar occasions after the software managed to flag the account-holder.

The OFAC found that “PayPal’s management demonstrated reckless disregard for U.S. economic sanctions requirements in deciding to operate a payment system without implementing appropriate controls to prevent the system from processing transactions in apparent violation of OFAC regulations.”

eBay has been planning to separate from Paypal within the year.

“The planned separation of eBay and PayPal will create two more nimble and focused companies that are better able to compete and win in the rapidly evolving commerce and payments markets,” Tony Bates, GoPro President and new board member of eBay Inc., said in a statement.

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