PayPal has agreed to pay a $7.7m settlement to the US Treasury Department for allowing transactions that violated sanctions against Cuba, Sudan and Iran.
According to reports, the company processed payments including $7000 from a person who is allegedly involved in nuclear-weapons proliferation. The Treasury Department also highlighted transactions worth $44,000 were processed which involved goods and services from Cuba, Sudan and Iran, violating US sanctions.
PayPal admitted its failure to identify its customers and mentioned that its automated interdiction filter was not "working properly" between 2009 and 2013, when the transaction took place.
The Wall Street Journal cited PayPal Chief Compliance Officer Gene Truono as saying: "Government compliance is a priority and a central component of how we do business around the world.
"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."
According to reports, the latest allegations against PayPal is one in a series of US cases filed against financial institutions for using inadequate systems to monitor and block transactions that violate sanctions.
