Hacker News Reader

Comment by nieve | Hacker News Reader

Farther down the thread:

  A few people mentioned OFAC sanctions, so I investigated a bit more. In Dec 2019, US Dept of Treasury sanctioned companies linked to Serbian arms dealer Slobodan Tesic, including Cyprus-based Tardigrade Ltd. So PayPal flags tardigrade ornaments by mistake.

View on HN

Part of this is no doubt Paypal's fault, but part of it is also the fault of the US's over-the-top trade sanctions laws. The penalties for getting it wrong are so severe, it creates a strong incentive for companies to err on the side of caution even when doing so produces idiotic outcomes like this one.

I don’t think it has to do with err on the side of caution. I don’t think PayPal has the technology to implement better blocking.

The problem is that if you make a false negative error, there is the risk of severe legal sanctions, if you make a false positive error, there are zero negative legal consequences. Hence the law encourages everyone to prefer false positive errors to false negative errors, and this is the result. If the legal incentives were different, the outcome would be different.

The law could provide an efficient recourse in case of false positives – e.g. a legislated right to appeal, legislated SLAs for considering appeals (and penalties for failing to meet them), indemnification for the provider if they grant an appeal in good faith, an expedited process for judicial review of denied appeals, etc – but the law doesn't, and since there is no incentive for an efficient recourse, nobody provides one

I understand the legal issue for PayPal, but then they got really lucky in this case. Tardigrade isn’t really a widely used word, so just blocking the word completely is “fine”, but what if the arms dealer in question operated under the name “Arts and crafts ltd”? Would PayPal have used another blocking system?

I don’t blame PayPal for their reaction, but I also doubt that they actually have better solutions than keyword blocking.

So, you think this is more of a prop 65 scenario?

Is it possible you could spell the word correctly? It is Serbian, not English.

Reply on news.ycombinator.com