The US Patriot Act of 2001 was originally enacted to combat terrorism, and prohibits the transmission of funds that are known to have been derived from a criminal offence or are intended to be used to promote or support unlawful activity. The Patriot Act was recently applied in a civil claim against a US based online payment services company (PAYPAL) which was providing payments on behalf of offshore online gambling operators. The Patriot Act purports to have extraterritorial jurisdiction, but this has yet to be tested.
With regard to specific products supplied by the NETeller Group, the distribution of a NETeller card in the US, which enables Members to withdraw funds accredited to their accounts by Merchants, may constitute an infringement of the Interstate Transportation of Wagering Paraphernalia Act (18U.S.C. § 1953) which makes it an offence to supply any ‘‘device’’ for wagering. This Act has been interpreted widely in previously successful prosecutions.
It is the Directors’ understanding that there has been only a small number of cases/prosecutions in relation to online gambling and that most of these have been where there have been assets or relevant individuals located in the US. The Group does not maintain offices, nor are any of its assets located, in the US. The Group has contractual arrangements with two US companies (which are related to two of the Directors as described in paragraph 7.6 of Part VI of this document) and which both clear monies through the ACH system on the Group’s behalf. There can be no assurance that the US will not threaten or try to prosecute the NETeller Group under federal law at some stage under existing or future regulation. NETeller continues to monitor the position carefully.  |