Insult to injury – first no Paypal; now no Payoneer!
We have been holding a discourse for quite a while about Paypal not including Pakistan on the list of countries in which they operate. They operate in 189 countries of the world. The only ones they don’t operate in are Cuba, Pakistan, Iran, North Korea, Afghanistan and Syria. This post from Faisal Khan provides the details. We have been trying to find out why this is so. Several people have tried to get an answer from Paypal, we have also tried to find out from the US Department of Commerce if there is any US regulation that is stopping Paypal from offering its services in Pakistan. As the efforts continue to bring Paypal here, insult has been added to injury as freelancers and small companies using Payoneer cards very recently received this message:
Due to a change in requirements from our regulators, as of June 1, 2010 Payoneer cards will be blocked for transactions in the countries listed by the US government as having strategic Anti Money Laundering (AML) deficiencies. This change will affect card usage in the following countries: Angola, Ecuador, Ethiopia, Pakistan, Turkmenistan and Sao Tome and Principe.
If your card is in use in one of the countries listed, we encourage you to use all funds by May 31, while transactions are still possible in these countries.
Please note that beyond May 31 your card will continue to be fully functional in all countries not banned by the US government, and we will be happy to load payments to the card without any change.
We apologize for the inconvenience and hope that the Payoneer card will continue to provide you with valuable service.
This means that all the freelancers and small businesses from Pakistan who used oDesk, Elance.com, Freelancer.com, RentaCoder, guru.com (there are many such individuals and companies who have been providing quality services to customers around the world through these sites) suddenly find themselves without a payment mechanism.
Some of the youngsters who have been affected wrote to me and asked if I could help. I know they are not members of P@SHA but they are part of the technology community (and this will affect more than just technology providers – it will affect anyone that is using Payoneer as a service to do any kind of online business).
So why has this suddenly happened? Didn’t we have an Anti-Money Laundering Ordinance in place? Of course we did – and that kept us off the list of high risk Money Laundering countries although everyone knew that we would only be taken off the list completely once we had a permanent law in place.
Are the claims regarding the AML deficiencies that they mention in the message sent to providers valid?
Check this out:
The FATF welcomes Pakistan’s efforts to ensure that its Anti-Money Laundering
Ordinance (AMLO) remains in effect and to implement a permanent AML/CFT
framework through legislation. However, FATF remains concerned regarding the
ML/FT risks posed by Pakistan and reaffirms its public statement of 28 February 2008
regarding these risks. In particular, the FATF expresses concern that Pakistan’s Anti-
Money Laundering Ordinance (AMLO) will expire on 26 March 2010. The FATF
strongly urges Pakistan to implement a permanent AML/CFT framework before the
expiration of the AMLO and strongly encourages Pakistan to establish a
comprehensive AML/CFT framework.
I am not sure how good or bad this Ordinance is.
Advocate Nighat Dad tells us that The Asia Pacific Group on Financial Action Task Force (FATF), did not blacklist Pakistan but actually upgraded Pakistan’s ranking from the list of high risk countries to the lowest risk countries or Category III.
FATF had given Pakistan a February 2010 deadline for formal conversion of the ordinance into an Act of Parliament and it was expected that strict action might be taken against Pakistan, including dishonouring of letters of credit, if it failed to pass an Anti-Money Laundering and Combating Terrorist Financing Act.
However, President Zardari signed the approved legislation on Anti-Money Laundering and Terrorist Financing Act on 26, March 2010 after getting approval from both houses of parliament. Here is the link to AML Act 2010 http://www.na.gov.pk/acts/act_2010/anti_money_laundering_act2010_260310.pdf
The FATF is now scheduled to meet at Amsterdam in June 2010. In the meantime Nighat is going to have an indepth look at the Act because there appears to be concern in some quarters that parts of the Act have been amended and may infringe on Privacy, Human Rights and rights of businesses. Some parliamentarians actually suggested that the Act needs to be discussed again clause by clause. We are going to have Nighat and some other experts look at it before we comment any further on this.
If anyone has suggestions for alternate payment mechanisms that these kids can use in the meantime, kindly let us know.