What if an arms trader used the name “Tickets Limited”? Would they block all payments mentioning tickets? Surely not, as it would hurt their business, clearly illustrating that their conduct is not at all due to “compliance with mandatory laws and nothing we can do about it” but “we did the math and we feel we can screw you over in this case.”
Example, I know one of the largest banks in Europe used to have payments they sent to one of their South American branch offices blocked from time to time because their address in Brazil or Argentina or something was on a street called "Avenue de Cuba".
A false negative can get you a fi ne of $250,000 and criminal penalties.
This isn't an issue of ( or not just an issue of) "not solving scale". Even if filtering issues if this sort were 99.9999% solved the risk asymmetry would still come down on taking an abundance of caution on nation-state levels of "oh crap" if you miss something.
I've worked in fintech/self-banking institutions. PayPal is a mockery of the entire industry. The example of the literal worst implementation anyone can think of and which leaves everyone scratching their head at how they manage to get away with running as fast and loose as they do.
Or you can do searches.
if they say that they will process payments unless prohibited by government sanctions and then do not process payments that is not prohibited I guess they would be getting sued for those payments.
Wrong. Assets under U.S. jurisdiction that are owned by or being transferred to persons or organizations on the Specially Designated Nationals and Blocked Persons List must be frozen. Furthermore, the Department of Treasury has a right to seize these funds without due process.
The Washington concept of NATIONAL SECURITY<tm> is a brain-eating parasite that seemingly renders compliance managers unable to tell the difference between categorically different things, such as US Senators and IRA terrorists, or Serbian companies named Tardigard and products, sold by companies completely unconnected with Serbia, with descriptions that contain the word tardigard.
As Bruce Schneier (IIRC) observed: these people are 'too dangerous' to let fly, but not dangerous enough to arrest.
Safe enough for firearms as well:
> In a 2010 report, the Government Accountability Office noted that "Membership in a terrorist organization does not prohibit a person from possessing firearms or explosives under current federal law," and individuals on the No Fly List are not barred from purchasing guns.[25] According to GAO data, between 2004 and 2010, people on terrorism watch lists—including the No Fly List as well as other separate lists—attempted to buy guns and explosives more than 1,400 times, and succeeded 1,321 times (more than 90% of cases).[26]
But then I think another part of the reason is that most of the international terrorist types that were originally expected to be blocked by the No Fly List were generally not in the US, and so not subjects to US Gov charges or even gathering evidence.
Because it renders them liable. The whole system will turn against you if you give it an opportunity to nail you for using discretion.
And this happens everywhere in society after a certain size is reached due to the need to hold people accountable without actually being able to fully evaluate who or what is to blame (due to the situation being too complex or not having all the facts/data). But politically, someone(s) has to go down.
Perhaps we aren't scaling the judiciary system propley & allowed it to become overly complex so that only a certain subsect of the population can navigate it efficiently and an even smaller portion of that can litigate for others.
Yep.
This is how you tell the difference between financial crime that the authorities don't care about and financial crime they do.
Look for personal liability.
It seems to me we build big opaque structures that prevent accountability. Your national internet provider rips you off? You'll probably be able to reverse the transaction, but good luck getting any information at all about what happened.
If you can fake ID, and you're on some list, why on Earth would you use the same name? And if you can't fake ID, then it will be linked to, you know, ID numbers, birthdays, and more.
I can't even imagine how "just names" ended up on that list, as a match requirement. How many John Smiths are there?
Very, very strange. I don't get it.
what country is that? AFAIK in the US most businesses can refuse to do business with you for any reason, except a very limited set of reasons related to discrimination[1].
> 44) Consumers should be guaranteed access to a range of basic payment services. Services linked to payment accounts with basic features should include the facility to place funds and withdraw cash. Consumers should be able to undertake essential payment transactions such as receiving income or benefits, paying bills or taxes and purchasing goods and services, including via direct debit, credit transfer and the use of a payment card. Such services should allow the purchase of goods and services online and should give consumers the opportunity to initiate payment orders via the credit institution’s online facility, where available. However, a payment account with basic features should not be restricted to online usage as this would create an obstacle for consumers without internet access.
https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
Depends very much on jurisdiction. PayPal is active in many jurisdictions, too.
Unfortunately, PayPal's advanced KYC and AML verification process is hilariously incompetent and rigid.
Some months ago, they asked me to provide charity information for my personal account, and subsequently limited my receiving/sending privileges.
Phone calls to them trying to sort this out have always ended up at some call centre in the Philippines, where the agents can only tell their users that the account limitation is "for their safety".
That account of mine is still limited.
They've also limited the personal account of a friend of mine (who was interestingly enough ex-PayPal) before, also asking for charity information.
In the US, which is presumably where the sanctions trigger originates (the company is on OFAC's list), a review of a transaction is just that. Even opening an account doesn't require a review of your customer's entire financial history, merely that, for a business account, you understand the nature of your customer's business.
> In that climate there's no good reason not to massively over-filter, the risks of a false negative are way too high.
There is, however, good reason to do an actual review and not outright block transactions. The advice PayPal gave its customer, "change the wording on your website to prevent this from happening," is exactly what competant regulatory training tells you not to do. Changing the wording of a transaction to obviate the need for a review is in itself a red flag. PayPal is utterly incompentant.
This keyword stuff is no kind of protection for them, especially if their own reps are advising people to just circumvent the list, which itself probably is a TOS violation.