home Export Controls, national security, Trade Security & Related Online Banking, Careful or You’ll be Toast

Online Banking, Careful or You’ll be Toast

Banking is not what it used to be, at least for those of us old enough to remember the days when you’d receive an appliance for opening an account with your local bank. Never quite understood the gift angle by the way.

Anyhow our bank recently updated its Transfer Service User Agreement. I doubt most folks will read it, it is a lawyer and regulators dream. To their credit, however, they did provide good summaries and not a tough slog if you were so inclined to read it. I still think most people will ignore it.

I gave it a quick glance and one item stood out (the section in bold and italics sounded rather ominous):

15. Export control and international use

The United States controls the export of products and information containing encryption (“Controlled Technology”). You agree to comply with such restrictions and not to export or re-export any Controlled Technology within the Transfer Service to countries or persons prohibited under the Export Administration Regulations (“EAR”). By downloading any products or information from this Transfer Service, you are agreeing that you are not in a country where such export is prohibited and that you are not a person or entity to which such export is prohibited. You are responsible for compliance with the laws of your local jurisdiction regarding the import, export, or re-export of any products or information subject to the EAR. XXXXX does not make any representation that any content or use of the Transfer Service is appropriate or available for use in locations outside of the United States. Accessing the Transfer Service from locations where its contents or use is illegal is prohibited by XXXXX. Those choosing to access the Transfer Service from locations outside the United States do so at their own risk and are responsible for compliance with local laws.

Even the most sophisticated business has a difficult time complying with these rules. Do we expect individual Americans to do the same? Granted these provisions are aimed at bad actors, those people who should know better. But I can see many a situation where the Transfer Services prohibited above could be breaking the law without even realizing it.

While you would think that technology has made it easier to catch online criminal activities, it has also made financial transactions a slight bit more complicated as well. Assuming that the banks are cooperating — (and here is one recent case where we know they were not only not cooperating but trying to hide the money from US authorities) —  the government still has a tough time cracking enforcing these rules.

I’ve advised both traditional bricks and mortar businesses as well as new technology or virtual businesses on compliance with U.S. export control and economic sanctions laws and regulations. Our regulatory system needs some significant updating in relation to many subject matters. Export control reform in this arena is surely one of them.

As usual, the trickle down of federal regulatory largesse is impacting ordinary and run of the mill law-abiding citizens. I’d bet there are increased banking fees in there as well. Despite all that, all this new technology and convenience is a good thing. It liberates, innovates, and helps generate prosperity for billions.

%d bloggers like this: