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Square Canada has a Cuban coffee issue
- sova 7y agoSquare should definitely set this right ASAP she's not doing anything against. I wonder if she had named her stand Canada Beans, would this have happened? The nerve
- smnrchrds 7y agoA couple of my friends went to a restaurant together in the US. One of them paid with card, the other friend paid the first friend back by sending him a transfer by PayPal or Venmo, I cannot remember which. The amount was around $10-$20. The description said Persian restaurant or Iranian restaurant, because that's the kind of restaurant they had gone to. The transfer was blocked and the transfer amount remained in frozen state for over a year. Ask anyone from one of the countries sanctioned by the US, like Cuba or Iran. This kind of experience is not new and it is not an exception. I no longer get surprised, just more and more disappointed.
- WrtCdEvrydy 7y agoOFAC lists are no joke, you will go to jail for disregarding it.
- mirimir 7y agoThe name of an ethnic restaurant has nothing to do with the corresponding country, legally speaking. That's just a stupid software glitch.
- WrtCdEvrydy 7y agoNah, you think the guy doing this is working that hard?
- mirimir 7y agoThen he ought to be fired.
- WrtCdEvrydy 7y agoAmerican workers are scared of being perceived as anything else other than a YES MAN. The guy being told he has two-three days to implement OFAC can't say NO or they'll find someone to replace him that will say YES so he'll implement the shortest answer that causes that 'feature' to be marked as 'complete'
- mirimir 7y agoEven a random Excel geek would know that a "name" field is not the place to go for OFAC implementation. Or at least, not for a restaurant. I'm sure that they can link to corporate and banking data.
- nullc 7y agoIt doesn't really matter what someone knows, what matters is the payoff matrix: Apply OFAC blacklisting extremely overly aggressively ... suffer an insignificant number of pissed off customers (who probably don't even leave you because everyone else is also awful). Apply it as non-agressively as you think the law permits, or somewhat more than that... and find out that you're facing criminal charges because a prosecutor thinks the line was slightly different where you thought it was. The situation is made more complicated in part because if prosecution isn't aggressive there are enormous sums of money ready to flow through whatever loophole exists and plenty of _bankers_ happy to help guide clients in blacklisted places through them. [ https://www.nytimes.com/2019/04/09/business/standard-chartered-sanctions-violations.html https://www.nytimes.com/2019/04/09/business/standard-charter... ]
- stouset 7y ago“Setting things right” would, in this case, potentially set Square afoul of federal law. Worse, not doing so may violate Canadian law. International law is wildly complicated and full of landmines. I suspect Square would strongly prefer to just disburse $14,000 and set things right. Unfortunately the cost of doing so potentially involves prison time for anyone who made that happen. Even something as innocuous-sounding as explaining to the merchant why they can’t release their funds is potentially grounds for an arrest. Whenever you see an article or blog post about Square, Stripe, Venmo, PayPal, or any other financial company having a pissed-off customer who’s owed money and can’t even get a support person to explain what’s wrong, the answer is virtually inevitably OFAC, and there is often literally no legal path forward to make the affected party whole at that point.
- sova 7y agoWow. Thanks for mentioning so, I had no idea is was such a widespread problem. All due to cutting corners on implementation while still wanting it to look legit.
- kspaans 7y agoI believe Stripe and/or has the same issue. One of the roasters I like to buy from in Toronto has beans from Cuba, but can't sell them online.
- lemmox 7y agoThe vendor claims to buy beans from a Canadian distributor. It's not immediately obvious how to get from "bought beans in Montreal, sold Coffee in Toronto" to "funds frozen for doing business with Cuba." The devil must be in the details of the embargo.
- koolba 7y agoOnce something gets flagged as a potential violation, it turns into a guilty until proven innocent situation. Square has much more to lose than just some bad PR or the spread on $14K so they’re fine with freezing the money until they get a clear ruling from the US regulators that could put them in a proverbially vice. The name “Havana” probably tipped off something and now it’ll be stuck like that until a high enough exec decides to take the heat for cutting it loose. If you want to try this out yourself (don’t do this...), send money to a friend via Venmo or equivalent, put something blatantly criminal in the description like “Heroin” or “ISIS tuition”, and see what happens.
- deleted 7y ago[deleted]
- tbyehl 7y agoI always put something suggestive of prostitution when I Zelle money to my partner. Have not seized our money, yet.
- parliament32 7y agoI've put everything from "erotic services" to "5kg of cocaine" in the memo fields of cheques, bank transfers, and interac e-transfers and never had an issue of any sort.
- chrisgarand 7y agoFrom my understanding of the article, they are Cuban beans. TL:DR - Funds routed through the US are subject to US laws and regulation, no matter if the origin, and terminating point consider the act legal. Long: If they held the funds, it's because someone at the ACH saw the business name, and automatically assumed that there was a potential liability (that happens, it's rare, but they will shut you out until you talk to them to prove your innocence). If they were the more enterprising type, the person who made the call looked up their web site and read how they purchase their beans from Cuba. While fully legal in Canada, if the funds are routed through the US(I can almost guarantee it), JP Morgan can be held liable, and as such they would like to avoid the repercussions of the US government.
- dwoozle 7y agoIf the US government forcibly projects its demented foreign policy agenda onto transactions in entirely unrelated countries, it will be a free bonus to non-US companies competing with the US tech incumbents.
- bch 7y agoI used to (nearly 20 years ago) roast coffee in Whitehorse, Yukon Territory Canada, and folks from Alaska would often stop in the shop. People that bought Cuban coffee often requested it be rebagged and just labelled “coffee” for about the same reason.
- paxys 7y ago> "I was kind of shocked and mad, because we're a Canadian company using Cuban goods bought and sold in Canada," Using an American payment company and an American bank, both of which are subject to American laws and aren't going to risk breaking a trade embargo, regardless of whether this particular case is 100% legal or not. Also not sure why the headline says Square Canada when the article makes it clear that it is JPMorgan Chase which is holding up the payment.
- throwaway5573 7y agoSo what’s the solution here? Use China’s Unionpay network?
- paxys 7y agoOr, you know, literally any Canadian payment processor
- jesseb 7y agoSuch as?
- PhasmaFelis 7y ago30 seconds on Google suggests Payfirma, Moneris, and TD Merchant Services, all headquartered in Canada. I haven't deep-dived on any of them, so those specific ones may not be suitable. But Canadian banks exist, and Canadian payment processors exist. This can't be hard.
- Canada 7y agoThey need to just give her the $14k immediately and then eat it if it's a problem. Stop processing the transactions going forward or until it's sorted out, but do not steal her money. Also, I found this distasteful: "I want to clarify that Square is not experiencing a technical glitch. While I cannot speak with you about Monica's individual case, I can tell you that Square's Customer Success team spoke with Monica yesterday, and she now knows the reason" How incredibly tone deaf to use such a condescending, bullshit phrase as "customer success team" when speaking with the media in a situation where they are clearly failing the customer. A simple "we spoke with her" would do.
- azernik 7y agoIf the question is legal liability for violating sanctions, releasing the $14K could put them on the hook for much more than $14K in liability.
- Canada 7y agoNo excuse. This is Square Canada. They made a promise to this client and it's not like they stopped taking money on her behalf as soon as they realized there was a problem. Whatever backend problems they have are their own problem and their own liability. If they aren't able to do that then maybe this company should not be operating in Canada in the first place. [edit: oops, I meant Square not Stripe!]
- eloff 7y agoSquare, not stripe.
- jpiasetz 7y agoNot releasing can put them in violation of Canada's Foreign Extraterritorial Measures Act so they are between a rock and a hard place (particularly Foreign Extraterritorial Measures (United States) Order, 1992 https://laws-lois.justice.gc.ca/eng/regulations/SOR-92-584/page-1.html https://laws-lois.justice.gc.ca/eng/regulations/SOR-92-584/p...)
- riffic 7y agoIt's beyond time to end the embargo against Cuba.
- wideasleep1 7y agoAnd it's beyond time Cuba end it's 2 ounce coffee rations every 15 days for Cuban citizens. That wouldn't last me 15 minutes. per Wiki: "Domestic distribution is currently limited to two ounces of coffee rations every 15 days for Cuban citizens.[13]
- onemoresoop 7y agoThey have rations to make it accessible to all, they are a poor country crippled by a long lasting embargo. Cubans are very sweet people. Their politics attempted to keep they away from american greedy companies. Just look around the caraibean region. Countries that played ball with the US are in a very bad shape, a la economic hit man and such. Cuba managed to keep the people poor but with dignity, education, health care, for all its citizens. They manage with what they have and they’d do much better if it wasnt for the embargo. I don’t get why this is being downvoted. I’d rather get a comment on why you disagree
- vinay427 7y agoI don't know if this is why it's being downvoted, but there are a few too many assumptions here for my taste. To start, it's unclear why they'd do much better if it wasn't for the embargo while you also claim they benefit from keeping themselves away from "american greedy companies." For example: How do you expect trade resulting from an end to the embargo would be handled differently, and how would Cuba be less susceptible to the relative economic dependence on the US that affects many other countries in the region?
- kemonocode 7y agoThey are a poor country ravaged by a tyrannical regime that has lasted as long as it has because Cuba is but a slight annoyance to the US after the Cuban Missile Crisis- nothing more, nothing less. Even if there was no embargo, the Castros would still be there doing as they wish. God knows they're trying to do the same with Venezuela. EDIT: None of this means I'm pro-embargo, or into US meddling into things they have no business in. Just that ultimately these embargoes do little in the grand scheme of things to stop dictatorial regimes. A tyrant has no reason to play by the rules, especially when money is involved.
- PhasmaFelis 7y agoSquare says it's "working on" getting Mustelier her money back. I feel like, at this point, they ought to simply pay her out of their own pocket. They were the ones who put her money in a bank that was not fit for purpose. Even if they didn't realize this would happen, they've violated their obligation to her, and they need to fix it now, not after a few more months of wrangling.
- stouset 7y agoThe fact that they’re “working on it” should be a strong hint that it is not as simple as writing the merchant a check and wiping their hands of the situation. As a US financial entity, Square is subject to the same laws and regulations as JP Morgan, the bank holding on to the frozen funds.
- tareqak 7y agoBy operating in Canada, Square Canada is subject to Canadian federal law: https://laws-lois.justice.gc.ca/eng/regulations/SOR-92-584/page-1.html https://laws-lois.justice.gc.ca/eng/regulations/SOR-92-584/p... .
- stouset 7y agoBy being a US-based company, they are also subject to US law. If you believe you have a general solution to the problem of incompatible edge cases in international financial regulation, there are many, many companies who would be willing to make you a very rich person in exchange for that information.
- tareqak 7y agoI don’t have a solution for the general case. I do think I have a solution for the specific case: Mustelier would have to get a Canadian lawyer and sue for damages plus lawyer and court fees. Square Canada would settle for this amount and ask her to sign an NDA and offer extra for her to sign the NDA. Square Canada would write-off the settlement as a loss. Square Canada would forfeit the amount frozen by JP Morgan Chase. Yes, this solution is probably still not good enough. Maybe Square Canada’s US parent would still have to pay a fine. I understand the what US law will be broken if JP Morgan Chase releases the funds in that a U.S. entity would be party to a transaction involving Cuban goods. However, right now, said U.S. entity is effectively party to a theft involving Cuban goods and Canadian funds.
- refurb 7y agoMustelier is Canadian and says she has no idea why a U.S. embargo is affecting her Canadian business. The article claims her money is going through a US bank. Not surprised this happened at all.
- tareqak 7y agoIt was Square Canada’s choice to route her money through a US bank. If her merchant account agreement has no mention of this possibility, then she is totally in the clear. Some other commenters have already linked the relevant Canadian law that is broken by the stopped payment: https://laws-lois.justice.gc.ca/eng/regulations/SOR-92-584/page-1.html https://laws-lois.justice.gc.ca/eng/regulations/SOR-92-584/p... .
- bearcobra 7y agoI once bought cigars at the Duty Free on my way into the US. Spent the next 2 hours dealing with an agent who'd clearly just been transferred from the southern boarder since the receipt said "Havana Style". I really hope the US is able to normalize relations with Cuba some day.
- bigiain 7y agoMight be just a coincidence, but it seems Square is turning it's back on the coffee/cafge industry that it did a lot of it's brand building on the back of: https://sprudge.com/square-just-increased-their-transaction-rates-and-cafes-are-screwed-151533.html https://sprudge.com/square-just-increased-their-transaction-... They've used the industry for good PR like this: https://squareup.com/au/en/townsquare/2018-australian-coffee-report https://squareup.com/au/en/townsquare/2018-australian-coffee... I guess they'd prefer to not have sub $5 transactions any more...
- faramarz 7y agoThere is a bigger story here and I'm glad it's made visible to more of the general public, and I really hope more people listen intently; the underlying technology running your favorites apps are sitting on servers on US soil and prone to US laws. that needs to be a title of the next headline, especially for anyone installing apps under the disguise of "privacy".
- molteanu 7y agoYes, that was made visible by the blocking of github accounts for developers in Iran, Syria and Crimea [1]. The US can disrupt whole businesses just by blocking access to fundamental services, tools or equipment. That's some nice political power right there. Free stuff is always a double-edged sword. You can't have free Google, free Youtube, free FB, free Github, free everything unless you also give back something. In this case, it limits the options of Nation States where most of its citizens use these free services on a daily basis. One wrong move, and the Government of said Nation State will have a nice (color?!) revolution on their back. In the end, good for US for having the brains and the determination to build all these systems, conspicuously. I'm sure Russia does the same or is striving to do the same. Different methods, same desired outcomes. It will be interesting to see what China will have in store in the coming years. [1] https://news.ycombinator.com/item?id=20552797 https://news.ycombinator.com/item?id=20552797
- theabsurdman 7y agoAmusingly, they literally show someone serving coffee with an endorsement from a coffee shop on their Canadian sign-up page for food & beverage services. https://squareup.com/ca/en/solutions/quick-service https://squareup.com/ca/en/solutions/quick-service
- kuschku 7y agoAnd this is exactly why the US domination of the payment industry is so dangerous, why companies like mastercard/VISA need to end, and why maybe sometimes it's understandable countries like Germany or Denmark have their own card systems or prefer cash. Running all transactions through companies subject to foreign laws makes you subject to those foreign laws. And there is no reason US laws should affect e.g. a Canadian in Canada doing business in Canada with other Canadians. The current situation is extremely unjust, because as German in Germany interacting with other Germans, I'm suddenly subject to US laws on which I can't even vote. Being subject to laws which I can't influence in any way democratically is unacceptable, and needs to end. Either we as society should go back to cash, build our own payment systems to replace the US-based solutions, or end the US hegemony that even allows the US to spread its laws this way.
- yeldarb 7y agoCurious how you feel about GDPR (the EU asserts its authority to bind an American entity with servers in America running a service targeted at American consumers so long as a single EU citizen chooses to visit the site).
- cameronbrown 7y agoIn theory* In practice if you've got no presence in the EU, what can they realistically do? Extradite over GDPR?
- jpambrun 7y agoYou could have one GDPR compliant site in the EU and a different international one.. or just block EU. Nobody is infringing on someone else's sovereignty in that case.
- cpach 7y agoSome sites actually do block visitors from the EU. E.g. the Chicago Tribune.
- pilsetnieks 7y ago
- alams 7y agoUS government and US payment companies like Visa and Mastercard complaining about India building its own payment processing systems (RuPay). Countries who depends on US and its companies for technology are very much vulnerable to these type of bullying. Countries need to look on bigger picture and develop self sustainable technology ventures and US should stop bullying countries with technology to retain the trust.
- 14 7y agoThis is where it is too bad bitcoin did not become more mainstream allowing people to just exchange money without permission. But perhaps these are the incidences that will lead to the mainstream use of things like bitcoins.
- Throwawaytrait 7y agoIf America is to deserve its own sovereignty, it must accept that of the rest of the world. Cuba has never done anything wrong to the USA. Some old racist cowards embargoed Cuba 60 years ago for reasons that just don't fucking matter anymore. It's 2019, it's time for Amerikkkans to stop attacking other nations with embargoes and sanctions because their culture and government system is different. Israel is committing genocide, we give them $15bn in welfare every year. We don't embargo them. They are a non-secular, fake presidency run by the religious extremists. No sanctions and embargoes. Saudi Arabia is committing genocide, we are spending billions to help them. They are also undeniably responsible for 9/11. No sanctions, no embargoes, nothing done about Khashoggi. Iran has NEVER attacked US soil, but Israel hates them, let's starve them to death and bomb them off the face of the earth to keep them from selling their oil and screwing our profits! Venezuela has NEVER attacked US soil or lifted a single finger against us. However, we failed at installing a puppet dictator who would play ball, so now we are starving them and or eventing them from selling their oil. Americans are assholes.
- raverbashing 7y agoSomebody needs to buy Cuban coffee in Canada, repackage it with a nice "produced in Central America/Aerated in Canada" sticker and sell it to the end coffee stands.
- kemonocode 7y agoPeople are all fine and dandy with the status quo until they fall on the wrong side of a dispute involving their money. Perhaps those cryptocurrency wackos aren't so crazy after all. Perhaps.