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Alibaba operates some of the world's largest e-commerce
platforms, including Alibaba.com and AliExpress.com.
The U.S. alleges that Alibaba’s U.S.-based payment processor,
AUS Merchant Services, violated federal law by failing to
prevent merchants from selling and importing illegal products
into the U.S. through Alibaba.com and AliExpress.com.
Alibaba acknowledges in an agreement with the Justice Department
that between January 2016 and December 2024, it failed to stop
roughly 80,000 product sales involving unlawful imports that
violated the Federal Food, Drug, and Cosmetic Act and other
federal laws.
A news release on the settlement resolution says that Alibaba
employees raised concerns that the company’s compliance controls
were inadequate and failed to prevent the sale of illegal
products — and, in some instances, merchants used Alibaba’s
messaging service to direct buyers to third-party messaging
platforms to facilitate illegal sales.
In a statement, Alibaba said the firm and the U.S. government
reached a mutually satisfactory resolution to bring stricter
compliance to the sale of products in the U.S. by third-party
merchants on its e-commerce platforms.
Law enforcement officers across the FDA, FDIC, IRS-CI, and other
agencies conducted more than 40 undercover purchases of
pharmaceuticals and equipment that were illegal to import into
the U.S., according to the news release. A non-prosecution
agreement was crafted between Alibaba and the Justice
Department.
IRS Criminal Investigations' Chief Jarod Koopman said the
resolution "underscores IRS Criminal Investigation’s commitment
to following the money and ensuring that companies operating in
the United States comply fully with federal law.”
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