PayPal Is Stalling Cute Tardigrade Merch—and a Notorious Weapons Dealer Is to Blame

Earlier this week, Archie McPhee, a Seattle-based gift seller (and home of the Rubber Chicken Museum) launched a glittery, green tardigrade ornament. It was a fitting addition to their squishy micro-animal themed products: tardigrade mints, glow-in-the-dark fingers, stress balls. 

But when customers tried to buy the ornament using PayPal, some received an error message: "This transaction cannot be completed because it violates the PayPal User Agreement." It was happening to enough tardigrade merchandise fans and sellers that several spoke out on Twitter this week. 

Archie McPhee tweeted on Friday that PayPal is blocking transactions containing the word "tardigrade." Others are experiencing the same—frustrations and stalled purchases on their water bear merch. 

This isn't only an algorithmic fluke or extreme prejudice against indestructible moss-piglets, but a US sanctions issue that can be traced back to a coincidentally-named shell company used by a weapons dealer who's been banned from traveling by the UN for a decade.  

Slobodan Tesic, one of the biggest arms and munitions dealers in the Balkans, owns a company called Tardigrade Limited that he used to export weapons to Arab and African companies, according to a Cyprus-based news outlet reporting on the new US sanctions last year. He’s been called “the biggest dealers of arms and munitions in the Balkans.”

One of McPhee's customers, Chris Maytag, was trying to buy the ornament when he got an error message: 

Other businesses have also reported tardigrade-related PayPal issues. Two Photon Art, a small business that sells STEM-themed art, tweeted in July that it had to rename its tardigrade enamel pin to "water bear," because PayPal was holding its payments. 

"They probably think we are sending actual tardigrades," they tweeted in July: 

"We've contacted them and they told us we should just stop using the word tardigrade," Archie McPhee tweeted. But if they have to change all of their tardigrade merch descriptions, URLs, and names on their tardigrade stuff to "water bear," that could limit how people looking for niche, nerdy water bear decorations find them.

Since PayPal hadn't given sellers or customers specific reasons for the review as of Friday afternoon, people theorized on Twitter about what would trigger the automatic review system to flag tardigrades. Some thought it might have something to do with the first syllable of tardigrade being a derogatory word, getting caught in the "Scunthorpe problem," where a string of characters is caught in a computer's filter for being offensive.

Others floated the idea that the Office of Foreign Assets Control sanctions list might have something to do with it. Tardigrade Limited is a company on that list, banned from doing business in the US. I searched the OFAC sanctions and found it: 

That's why PayPal puts all tardigrade-related purchases under review. 

Since it's a US company, PayPal has to comply with US government OFAC sanctions. Payments that could violate US sanction laws are placed under review, and if nothing indicates sanction-violations—like someone trying to disguise weapons in a tardigrade-themed shell company, perhaps—the payment gets processed, according to PayPal.

In 2015, PayPal was ordered to pay $7.7 million for 486 OFAC sanctions violations over several years. 

A PayPal spokesperson told me that once merchants who are seeing this issue flag it to their support team and go through the review process, they're in the clear and won't have problems with selling these items with "tardigrade" in the name in the future.