PayPal agrees to pay £5.1m fine for not blocking prohibited payments

Step 3: PayPal Merchant Tools

PayPal has agreed to pay a $7.7 million (5.1million) fine for allowing transactions involving items being sent to and from Cuba, Iran and Sudan, despite sanctions against the countries.

The US Treasury Department said PayPal failed to check the identities and details of those making the payments, one of which was a payment for $7,000 that was linked to weapons of mass destruction.

It also believes PayPal allowed around 500 'illegal' payments to go through, totalling almost $44,000 (29,500). However, PayPal did voluntarily tell the Treasury's Office of Foreign Assets Control (Ofac) about the payments.

PayPal said the reason these payments went through was because there was a delay in scanning the transactions between 2009 and 2013.

PayPal's chief compliance officer Gene Truono said in a statement: "We recognise that prior to April 2013, PayPal did not have a system that could scan payments in real time in order to block prohibited payments. There was a delay in the scanning, which allowed some prohibited payments to be processed."

A PayPal representative told the BBC: "Since then, we've taken additional steps to support compliance with Ofac regulations with the introduction of real-time scanning of payments and improved processes."

One of the most concerning events was the allowing of payments by Kursad Zafer Cire, who had been identified by the US State Department in 2009 as someone involved in weapons of mass destruction. PayPal allowed 136 payments to or from an account associated with him throughout the period.

Truono said: "Government compliance is a priority and a central component of how we do business around the world."

Clare Hopping
Freelance writer

Clare is the founder of Blue Cactus Digital, a digital marketing company that helps ethical and sustainability-focused businesses grow their customer base.

Prior to becoming a marketer, Clare was a journalist, working at a range of mobile device-focused outlets including Know Your Mobile before moving into freelance life.

As a freelance writer, she drew on her expertise in mobility to write features and guides for ITPro, as well as regularly writing news stories on a wide range of topics.