February 28, 2020
The online money-transfer platform PayPal has started blocking any payments where the words “Iran” or “Cuba” appear.
In an attempt to prevent violations of US sanctions laws, the platform (and its subsidiary Venmo) implements a system that automatically flags payments that include any of a list of keywords deemed potentially suspect in the memo.
The magazine Jewish Currents this after a number of payments to journalists who covered a story on Iran were flagged because that nation’s name was included in the memo.
The magazine said nine paychecks to JC staff and contributors are currently being held up by PayPal. PayPal said the memo line reported the payment was for “January plus Iran piece.”
The message from PayPal said: “Please provide the following information: An explanation of the reference to ‘Iran;’ The purpose of the payment, including a complete and detailed explanation of what is intended to be paid for.”
In a subsequent investiga-tion, the magazine that the incident is representative of a larger pattern in PayPal’s flagging system, discovering that the platform “has a fairly eager trigger finger when it comes to anything having to do with foreign sanctions,” despite a pretty lax attitude toward a variety of other potentially illegal behaviors, including prostitution, human trafficking, weapons and murder.
For example, while words like “ISIS,” “Persian,” “Cuba” and “North Korea” were flagged in Slate’s test, PayPal didn’t bat an eye at arguably more aggressive terms referring to arguably more egregious behaviors such as “weapons of mass destruction,” “assassination” and “human trafficking.”
“PayPal takes its regulatory and compliance obligations seriously, including US economic and trade sanctions administered by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC),” the company told Slate in a statement. “Our goal is to deliver as seamless of a payments experience as possible while we do our job in making sure payments made on our platforms comply with applicable law.”
