American online payment gateway giant PayPal has been imposed a Rs 96 lakh penalty by the Financial Intelligence Unit for aviolating India’s anti-money laundering processes.
This is for the first time that the FIU, an agency under the Union finance ministry, has undertaken punitive action against an online payment system operating in the country like it has done against public, private and cooperative banks in the past for not following anti-money laundering procedures in keeping their financial channels clean.
Defeating and Frustrating
The company has also been charged with “defeating and frustrating” the tenets of public interest and the provisions of the Prevention of Money Laundering Act (PMLA)
which aims to keep the country’s financial system safe from economic crimes, terrorist financing and black money transactions.
Deadline for payment of fine
The order directs the company to pay the fine within 45 days and also register itself as a reporting entity with the FIU.
However, they can appeal against the order can also be made before the Appellate Tribunal of the PMLA within 1.5 months.
Issued order
“…I, in exercise of powers conferred upon me under section 13(2)(d) of the PMLA, 2002 impose a total fine of Rs 96 lakh only on PayPal Payments Private Limited which will be commensurate with the violations committed by it.”
It said that “there is ample evidence of the willful violation of the law and, therefore, PayPal cannot be let off with a penalty that should normally be imposed for minor violations”.
Comment from PayPal
“We take our obligations seriously across 200 markets where our payments platform is present.
We are carefully reviewing the matter and we cannot comment further at this point.”
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