WikiLeaks Claims a TKO Over Visa in Iceland

Posted on Jul 12, 2012

Fosforix (CC BY-ND 2.0)

An Icelandic court gave WikiLeaks a legal boost by ruling that a company formerly run by Visa broke contract laws by blocking credit card donations to the whistle-blowing site. Visa responded by saying the ruling might not apply to its operations.

WikiLeaks claims it has lost roughly $20 million in funding since the U.S. financial companies Visa, Bank of America, MasterCard, PayPal and Western Union stopped handling WikiLeaks donations in December 2010. At that time, MasterCard and Visa justified the suspension of service by claiming that Wikileaks was “engaging in or facilitating” illegal activity.

—Posted by Alexander Reed Kelly

The Guardian:

Attorney Sveinn Andri Sveinsson told Reuters that an Icelandic court has ordered Valitor to resume processing donations to WikiLeaks within two weeks or face Kr800,000 (about £3,000) in daily fines.

… But even if Valitor does resume passing payments to WikiLeaks accounts in Iceland, it is not clear that it would have any to process. The Visa and Mastercard system works in a “four-party” model, where the customer holding a credit card effectively has a contract with an “issuing bank”. At the receiving end is the “accepting bank” – in this case Valitor – and its “merchant” (here, WikiLeaks).

Visa and Mastercard effect the transfer of funds between the issuing bank and the accepting bank. While the court may have restored the tie between Valitor and WikiLeaks, it is unclear whether that means that Visa is obliged to pass on money transferred to an issuing bank from a cardholder.

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