Money Laundering Authority To Probe Distributor Payments Via Pay Pal
PayPal the service used by thousands of distributors selling products on eBay is facing action under the Anti-Money Laundering and Counter-Terrorism Financing Act as authorities probe over 300 breaches.
According to News Corp the global payments giant PayPal has become the latest big-name target of financial crimes regulator Austrac who is probing their compliance with laws surrounding the compulsory reporting of the transfer of funds in and out of Australia.
Austrac believes that money has been transferred to criminals and terrorists after both the Federal and State Police forces in NSW, Victoria and Queensland provided them with information relating to questionable activities.
Information is believed to have been discovered during raids on homes and businesses during the past 12 months.
The people tasked with the investigation are the Austrac enforcement unit who are currently assessing PayPal Australia’s compliance with laws surrounding the compulsory reporting of the transfer of funds in and out of Australia.
The Australian claims that the PayPal revelations come as Westpac and Austrac continue to squabble over which facts they agree on in a legal case against the bank alleging 23 million breaches of the same rules.
The action against Westpac shook the bank to its core in November when an Austrac court filing showed some of the transactions were linked to financing sexual exploitation of children in The Philippines.
Sources said the number of PayPal’s potential breaches had to be considered against the fact it facilitated a large number of small-value amounts on sites such as eBay.
These sites are widely used by CE and audio retailers and distributors to sell both current and run out model stock.
The legal notices PayPal has been hit with allow Austrac to gather its own information ahead of the auditor presenting its report.
A final decision on legal action is expected after the audit report is submitted.
Thomson Reuters Asia Pacific regulatory intelligence expert Nathan Lynch said the matter was complicated by PayPal being the biggest reporter of international funds transfer transactions in Australia, accounting for about 70 per cent. “The entire global payments industry is watching this,” he said of the Westpac and PayPal matters with Austrac.