Fighting Money Laundering & Terrorist Financing

Issue in Detail

Point of View

  • Criminals and terrorists attempt to move money and conceal its real sources and destinations. Money laundering, as it is known, is the effort by criminals and terrorists to convert illicit proceeds of crime into what appears to be legitimate sources of revenue, or to move funds from one member of a criminal enterprise or terrorist group to another without raising suspicions. For criminals, profiting from their crimes is their goal; for terrorists the funds are necessary to carry out their destructive acts.
  • We regard fighting financial crimes as a strategic business priority. We invest heavily in keeping our sites, such as PayPal, from being used to launder money. Our efforts are complemented by close cooperation with law enforcement at an international level.
  • Our government relations team engages regularly with policy makers to share our experiences and ensure there is an effective legal framework and commitment to fighting money laundering around the globe.

Position and Action

  • Money laundering, just like the Internet, knows no borders. It therefore requires action and cooperation between policymakers and law enforcement at an international level.
  • The fight against money laundering relies on financial services providers such as PayPal to be alert to uses of their systems that appear to be suspicious. Laws in many countries require financial services providers to report suspicious activities to the appropriate regulators.
  • PayPal takes its obligations to report suspicious activities seriously. In the United States, PayPal files suspicious activity reports (SARs) with the Financial Crimes Enforcement Network (FinCEN). In other countries it files similar reports with the appropriate regulator. In addition, PayPal cooperates with law enforcement when it receives inquiries for additional information based on its SAR filings.
  • Furthermore, PayPal recognizes that money laundering efforts often cross national borders. We strongly believe that law enforcement has to be given the necessary resources to investigate cybercrime offences. Unfortunately this is not the case at the moment. Cybercrime is often too low in law enforcement’s priorities, especially if the victims fail to report it or the sums involved are small.
  • Furthermore, law enforcement, prosecutors and judges often do not have the necessary technical means and knowledge to investigate and prosecute this type of crimes. We strongly support public-private partnerships in this area.
  • Regarding terrorist financing, PayPal is vigilant to prohibit organizations that have been designated as those who commit, threaten to commit, or support terrorism from using PayPal for transactions. In the United States for example, the Department of the Treasury designates these individuals and PayPal is vigilant to prevent them from using PayPal. PayPal checks every user of PayPal.