Square Canada has a Cuban coffee issue (opens in new tab)

> 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.

I think once the initial tech boom ends and good engineering talent becomes cheaper and more abundant, we're going to see a lot of countries building their own systems for the things that governments typically have control over. Exchange of money and proof of identity will probably be highest among those.

"countries like Germany or Denmark have their own card systems or prefer cash"?

Denmark is an almost cashless society, and the cards I have from danish banks are mastercard - is there a different card system in Germany?

Curious 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).

In a certain sense, you didn't "vote on" the sanctions, but, when the system works as it should (prior to the current US administration, for instance) these kinds of decisions that affect international infrastructure are made with broad consensus---including the approval of people you _did_ vote for, or at least the approval of other nations whose interests are broadly aligned with yours.

This alignment of interests has reduced the transaction costs of building global systems like payments infrastructure, because of the assumption that parties with the technical ability to control their functionality will be constrained implicitly by international norms. I wouldn't dismiss this outright as "hegemony"---it worked well for a long time---but it's natural in the current political context to wonder if assuming good faith from all parties involved will be as reasonable in the coming decades as it was in the past.

This was my main takeaway from the article. Call a spade a spade. "Square's Government Fear team spoke with Monica yesterday, and she now knows the reason."

It's completely legitimate for a corporation to be afraid of the government, and have a team to manage risks. It's not legitimate to call stealing $14,000 of someone's money "customer success". What Square's team did was fail the customer. That's not success.

I agree. Unless there is an actual law telling them to hold the cash. I would let go of it. Cut out future transfers as you said. Why PayPal like companies can just steal cash like that is beyond me. They should be legally liable for the laws broken if they keep someone elses cash.

If the question is legal liability for violating sanctions, releasing the $14K could put them on the hook for much more than $14K in liability.

“We’re not experiencing a technical glitch, this was entirely an organisational screw-up”

She may have a case if she sues. It would depend on the fine print in the Square Canada agreement. If they say they process money through the US, she might be out of luck. If they don't then she has a case.

Yes, 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

Hey I just stopped in at midnight sun coffee roasters for the first time last week. Good place.

And 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]

What is even the justification for the embargo at this point?

The 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.

A 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.

“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.

She’s transacting with Square Canada: that Square Canada transacts with a US bank is not her problem unless it is spelled out in her merchant agreement.

If I ordered an expensive item, the seller or the shipping company chose to mail it through a jurisdiction where the item was illegal, and it was confiscated, I would 100% expect them to take responsibility for replacing my item immediately. They can wrangle the cost back from the confiscators on their own time.

I don't see this as any different. Square took on the responsibility to deliver this woman's money, and it has failed in that responsibility. Exactly how they failed should not be her problem. They need to make it right.

It is illegal for a Canadian company, in Canada, to be subject to or comply with American extraterritoriality laws surrounding Cuba.

https://laws-lois.justice.gc.ca/eng/regulations/SOR-92-584/p...

So what’s the solution here? Use China’s Unionpay network?

It 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/p... .

Once 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.

The US banking system is incredibly risk adverse. They do things like automatically flag transactions with words that might indicate a violation of US sanctions, such as Havana or Cuba. Venmo, for example, is infamous for questioning transactions with keywords like this.

From 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.