[LINK] AMC-CTF guards Australia against $1500 Villains

[Roger Clarke]

Cash strapped and brassed off, filmmaker casts PayPal as the villain
Date: August 27 2009
The Sydney Morning Herald
Rick Feneley
http://www.smh.com.au/technology/cash-strapped-and-brassed-off-filmmaker-casts-paypal-as-the-villain-20090826-ezt9.html?skin=text-only

DAVID STEINHOFF is developing a $60 million war-romance feature film 
in Sydney, so he was shocked when PayPal blocked a modest cash 
transfer from the US - just in case he was a money launderer or 
terrorist. Or possibly even a child pornographer.

A week later, Mr Steinhoff still does not have his money, and he is 
wondering why the Australian Government has ''subcontracted'' PayPal 
to do security checks on its citizens.

A shareholder in his company, Presence Films, transferred $US1500 
($1794) on Thursday last week with this message in the subject field: 
''You've got money!''

But no he didn't. When Mr Steinhoff used the internet to try to 
withdraw the funds on Friday, he received this message: ''Your 
account has been limited.'' And this: ''Australian law requires 
PayPal to collect information about you and your business.''

Alarmed, the producer obeyed the direction to upload one 
proof-of-identity document, and was advised it may take 72 hours to 
process.

''We're a film development company, so we run on the smell of an oily 
rag,'' Mr Steinhoff said at his Fox Studios office. ''I we don't have 
cash, we can't pay the bills.''

On Saturday, he called PayPal. He says he was advised that the 
Attorney-General had requested PayPal perform identity checks on 
money transfers exceeding $700, as part of a crackdown on terrorism. 
He noted that, to hold a corporate bank account in Australia, his 
company had to be registered with the Australian Securities and 
Investment Commission and provide 100 points of identity to the bank.

He logged on again on Sunday to check the progress of his money and 
found that PayPal needed more documents - a rates notice and utility 
bill - before it would restore his account access. On Monday he 
called AUSTRAC, in the Attorney-General's Department, and says he was 
told they were investigating terrorism and child pornography and 
PayPal was helping in their investigations.

On Tuesday he contacted the Herald, worried that Australia was 
entrusting an ''offshore company'' to gather information on its 
citizens, with no guarantee that it could not be used against them or 
for identity theft.

Mr Steinhoff did not realise, but every financial institution - not 
only PayPal - is obliged to run identity checks when transactions 
reach a threshold under "know your customer" obligations covered by 
the Anti-Money Laundering and Counter-Terrorism Financing Act of 2006.

The Attorney-General's Department said PayPal was required to act 
when a customer's account balance exceeded $1000. A spokesman could 
not explain the $700 figure that Mr Steinhoff said he was quoted, nor 
the mention of child pornography, given that the act refers to action 
against money laundering and terrorism. He said amounts of $1000 or 
less may not require the checks, but ''only where PayPal determines 
the risk of money laundering and terrorism financing is low''.

PayPal advised Mr Steinhoff that his account was restored on Tuesday, 
but that the money may not be deposited into his bank until Monday.

''That's 11 days later,'' Mr Steinhoff said. He wonders how many 
businesses are having their cash flow - seemingly petty amounts, but 
critical to their operation - frozen the same way.

Commercial obligations prevent disclosure of details about the film, 
but $60 million is a big budget for an Australian production. The 
person who sent the money was a senior US military non-commissioned 
officer who had worked in intelligence in Afghanistan. ''What he had 
to say about all this was pretty heavy-duty. He was upset,'' Mr 
Steinhoff said.

On the matter of privacy, PayPal stresses it is bound by law to 
protect customers' personal information. A spokeswoman could not 
discuss the particular case, but said usual bank clearance procedures 
could explain the lag in the funds hitting Mr Steinhoff's account.

PayPal sent another message on Tuesday, requesting he answer a survey 
on how it had met his needs on this matter. In block letters, it 
said: ''AFTER 5 DAYS, THIS INVITATION WILL EXPIRE.''

Expire it will. Mr Steinhoff has a movie to make.


-- 
Roger Clarke                                 http://www.rogerclarke.com/
			            
Xamax Consultancy Pty Ltd      78 Sidaway St, Chapman ACT 2611 AUSTRALIA
                    Tel: +61 2 6288 1472, and 6288 6916
mailto:Roger.Clarke at xamax.com.au                http://www.xamax.com.au/

Visiting Professor in Info Science & Eng  Australian National University
Visiting Professor in the eCommerce Program      University of Hong Kong
Visiting Professor in the Cyberspace Law & Policy Centre      Uni of NSW