PayPal accepts $7.7M settlement with Treasury

PayPal on Wednesday accepted a $7.7 million settlement with the Treasury Department over charges it violated a myriad of U.S. economic sanctions.

Reuters reported that Treasury charged PayPal with inadequately monitoring its financial transactions for entities it sanctions.


It alleges the company repeatedly authorized financial dealings with blacklisted parties ranging from arms dealers to rogue regimes such as Iran.

Wednesday’s announcement of a settlement absolved 486 outstanding charges Treasury had filed against PayPal for alleged violations. Its case argued that PayPal had repeatedly broken U.S. law from 2006 to 2013 by not adequately screening its transactions.

At issue is the recipients PayPal authorized financial transactions for. Treasury contends the online payments company allowed deals involving hostile nations like Cuba, Iran and Sudan.

During others, it argued, PayPal ignored warnings that the U.S. had blacklisted individuals as enemies of the state.

Treasury referred to one such incident involving Kursud Zafer Cire, a blacklisted Turkish national, as an “egregious case.” It first sanctioned Cire in 2009 for his ties to weapons of mass destruction proliferators.

The agency’s case alleged that despite this, PayPal processed 136 transactions involving Cire’s account from 2009 to 2013. Treasury estimated it cleared more than $7,000 for Cire despite six alerts he was on U.S. blacklists.

PayPal began implementing better screening procedures in April 2013 over the charges. It also hired new management in its compliance division and cooperated with Treasury’s investigation.

EBay Inc. owns PayPal and plans on splitting it off from its marketplace division later this year. 

The company, based in San Jose, Calif., signed a settlement with Treasury on Monday.