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eBay blocks online retailers' Cuba products

Published: 29 Jul 2011 08:40 GMT+02:00

The daily Die Welt reports that German website owners selling items such as Cuban cigars have had their transactions blocked and have even seen their PayPal accounts closed in recent days.

The move is apparently in response to the long-standing US embargo against Cuba, which generally prohibits American companies from doing business there. But there are no such restrictions against European Union companies and, EBay, which is based in California, has allowed Cuba-related transactions by Europeans to go through in the past.

Thomas Altman, who sells Cuban cigars and spirits through his internet store, told Die Welt that PayPal has closed his account despite his protests, making it impossible for him to sell his products.

“We offered a compromise, but PayPal has not addressed it at all,” he said.

A PayPal spokesman confirmed the closure of Altman’s shop and several others to the newspaper, stating that its acting on the policies of its US parent company.

But he offered no alternatives for merchants such as Silke Wolf who said she had lost up to 60 percent of her business through PayPal.

“This has now disappeared and we have no substitute,” she told Die Welt, speculating the move was actually calculated to protect American alcohol brands.

Aggrieved online retailers say they’re mulling their legal options and a class action lawsuit is one possibility.

International trade expert Lothar Harings, with the law firm Graf von Westphalen, thinks they’d likely be successful. He called eBay’s actions “grossly unlawful” in Germany.

“eBay itself is violating EU law, mainly EU blocking regulations,” Harings said.

The regulations, which explicitly allow Europeans to do business with Cuba, were formulated in response to US sanctions against the communist caribbean state.

The Local/mdm

The Local (news@thelocal.de)

Your comments about this article

14:18 July 29, 2011 by cmcintir
Hang on. PayPal isn't keeping anyone from doing business in Cuba. They may not facilitate it, but they're certainly not stopping it. That's like me blaming Visa when my local drink market only takes GiroCard. US companies are prohibited from doing business with Cuba. Stupid or not, that's the rule. PayPal is a US company. I doubt Cuba takes GiroCard. Should we be upset about that? I know the issue is inconsistency. They should pick a side and stick to it.
14:58 July 29, 2011 by ChrisRea
You are correct, PayPal isn't keeping anyone from doing business in Cuba. The article is however about something else: eBay/PayPal is preventing a German trader to sell Cubanese products through his own website. So the German guys have a German website which employed PayPal service as payment solution. But when the German website is to sell Cuban cigars, PayPal closes its account. By providing the payment solution, PayPal does not do business with Cuba, but with Germany.

If PayPal wants to do business in Europe, it has to follow European regulations. Or to pay fines if it does not respect them.
17:21 July 29, 2011 by ErnestPayne
Ebay - managing to shoot itself in the foot with every business decision.
18:09 July 29, 2011 by beatriceco
I've had my own issues with PayPal in the past, and have used Amazon Payments as an alternate to PayPal. Don't be held hostage, there are alternatives, and it is a shame that eBay/PayPal arbitrarily will shut you down and harm your business without much recourse. Here is the Amazon Payments web site link: https://payments.amazon.com/sdui/sdui/index.htm
18:58 July 29, 2011 by cmcintir
ChrisRea, PayPal isn't preventing a German trader selling Cubanese products either. They're only preventing him from using PayPal. If he allowed other forms of payment, there would be no problem. PayPal is in a difficult position. If they are the middlemen for the money, they are doing business with Cuba - transferring money. I can't use a Discovercard at Hornbach. I can't use GiroCard in the UK.

If PayPal was the only way to bank on-line, I would agree with you. They're not. They're a US company that has to follow US law. Are these people forced to use PayPal??
20:59 July 29, 2011 by Bushdiver
What is a Cubanese product? Is it like Vietnamese, or Chinese or just plain Cuban products.
21:16 July 29, 2011 by willowsdad
Sounds like PayPal could use a boycott.
21:26 July 29, 2011 by rick86
Good start,now add N Korea,China,Iran,Syria and several other ''bad guy'' nations and they'd be doing something right.
00:22 July 30, 2011 by ChrisRea
@ cmcintir #5

The German trader counted on PayPal honoring their contract according to the EU legal regulations (as PayPal Europe is registered in Luxembourg). Therefore they did not needed to use another payment service provider. By closing down their account (and this is done on illegal grounds), PayPal prevents them to do business until they enter an agreement with another provider.

The irony is that in this case PayPal would need to transfer money from/to Cuba only if some Cuban guys would like to buy Cuban cigars from Germany. So actually they cannot be the middle man in doing business with Cuba. They would only service a German trader who already bought its merchandise from Cuba.
08:45 July 30, 2011 by gnteichrib
Germany and the E.U. & U.K. have legislation in place to protect their sovereignty as Canada does, regarding the Torricelli and Helms Burton Acts. These are the U.S. legislation in force that attempt to bully U.S. foreign based subsidiaries to comply with the trade embargo against Cuba.

The E.U. Council Regulation (EC) No. 2271/96 of 22 November 1996 protects against the effects of the extra-territorial application of legislation adopted by a third country, and actions based thereon or resulting therefrom.

In Canada, my Parliament enacted the Foreign Extraterritorial Measures Act (FEMA) amendments forbidding Canadian companies and Canadian-based U.S. subsidiaries, involved with Cuba, from complying with any directive from any U.S. entity attempting to influence or harass any company operating in Canada. Enacted in 1992 in response to ratification of the Torricelli Act, the amended FEMA responded, once again, to infringements on Canadian sovereignty found in the Helms Burton Act.

The E.U. has to "man-up" and follow their legislation in place!
09:44 July 30, 2011 by Landmine
What it boil;s down to is Ebay and PayPal are US companies subject to US laws. I am sure they don;t like doing this but they have no choice. If as a user you can't do business with Cuba, then use a non US base company -very simple...
13:54 July 30, 2011 by ChrisRea
Yes, Landmine, Ebay/PayPal might be forced to follow US law. However, their operations in the EU are subject to EU regulations as well. So if they do not respect them, they have to pay. If they do not want to respect EU regulations, they should do no business in Europe.
20:59 July 30, 2011 by PierceArrow
Three cheers for PayPal! Fidel Castro is a Stalinist scumbag, and so are his henchmen. BTW, if Richard Nixon had been elected in 1960 instead of the brat Kennedy, Nixon would have take Castro out by giving air support to the Cuban rebels at the Bay of Pigs and scared the scheiBe out of USSR dictator Nikita Kruschev. Think about it! No Cuban missile crisis. No Che Guevara making terror all over the world. Perhaps even no Berlin wall and no JFK going to West Berlin to say (in the exact English translation) "I am a jelly donut!"
08:35 July 31, 2011 by ChrisRea
:D Ha, ha, ha! You made my day, PierceArrow! I think you could make a fortune if you start writing comic fiction. Stay away however from science fiction, because there things have to make a bit of sense.
16:09 July 31, 2011 by wenddiver
That's the image Germany needs, let's all get behind another totalitarian Government, a real Dictatorship, that shoots women and Children down in cold blood who try to escape the Dictatorship. You get bonus points on the bad guy scale for helping a group that has provided the weapons for every tin pot genocidal Dictator in Africa.

Torture,firing squads, exporting violent revolution, a Cuban Coast Guard that mahine Guns people trying to escape or imprisions them for life and a real Old Time Soviet Stooge to boot, who wouldn't want to support that??? I mean if you can make a couple of EUROS, pull yourself up by your own Jack Boots and go ahead, you may be to busy selling stuff to Iran to do it tomorow.

Respect. Don't ever change.
03:54 August 1, 2011 by DavidtheNorseman
There is a simple alternative. Set up a European-based PayPal-style online bank and have EU ebay transactions offered through it (by legislation if necessary).

This is just another example of the wild new World we live in....one evening in about 45 seconds I bought something in in overseas from myself (Hong Kong or such as I recall) then payed out my ebay balance since I was there to ebay whose servers are in California if I recall correctly and the amount went into their Swiss accounts. Since I do not live in Asia, the US or Switzerland it boggles the mind how many legal jurisdictions were involved....the technology is ahead of the legal agreements at present. My condolences to the German merchants, because having the rug pulled out is rough and I would think they may certainly have a legal case. For what it is worth, PayPal probably had zero choice since they must obey the direct government orders of the jurisdiction of where they do business (or find themselves in jail shortly).
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