Two avid gardeners from Alberta have run afoul of Washington’s Cold War sanctions against Cuba.

Brian and Jan Ficht, who live near Edson, had their PayPal Canada account frozen after they used it to pay for a three-week educational tour of Cuba's urban agriculture practices.

'I thought these were pretty simple processes. To me it was funny this little hiccup could come into a gardening course.' - Jan Ficht, gardener

Ficht said he had no idea he was conducting a transaction with an American company and would be subject to American laws.

"I'm one Canadian, dealing with another Canadian, through what I believe is a Canadian organization – PayPal.ca," he said.

"But in fact it's falling under the shadow of U.S. foreign policy."

Ficht and the tour operator he was trying to pay have both cancelled their PayPal accounts because of the experience, which Ficht describes as "economic imperialism."

Ficht said he wasn't sure what PayPal meant at first when it told him it was holding, then reversing his payment, because of its "acceptable use policy."

"If you try and call on the telephone, it's one of these half-hour phone queues where you wait and wait and wait. And when someone finally does pick up the line, they don't have anything to offer. It was quite frustrating," Ficht said.

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Brian Ficht said he was unaware that PayPal was a U.S. company, as its website uses a .ca domain. (CBC)

PayPal Canada eventually responded by email telling Ficht it was restricting his account because of "activity that may be in violation of United States regulations administered by the Department of the Treasury's Office of Foreign Assets Control (OFAC)."

The company said while screening his account, it found that he "may be buying or selling goods or services that are regulated or prohibited by the U.S. government."

PayPal told Ficht that before reinstating his account he had to "agree to no longer undertake activities in violation of laws, regulations, and rules outlined in PayPal's user agreement."

Jan Ficht said she was surprised her interest in organic and sustainable vegetable growing would be red-flagged by the American government. Canada has always maintained trade relations with Cuba.

"It certainly made me feel like a bumpkin all of a sudden," she said.

"I thought these were pretty simple processes. To me it was funny this little hiccup could come into a gardening course."

Her husband tried reasoning with PayPal but all he got was a series of boilerplate emails, each of which began with, "As part of our security measures we regularly screen activity in the PayPal system," he said.

"Their response is totally unswerving. They're maintaining that I have contravened U.S. foreign policy and as such my account is frozen now," he said.

PayPal Canada subject to U.S. laws

In a statement, PayPal Canada spokeswoman Malini Mitra said the company is bound by American law.

"As a U.S. company, PayPal and all its foreign subsidiaries have to comply with the Office of Foreign Assets Control sanctions regulations. With respect to Cuba, payments involving non­-U.S. customers have to be declined as per OFAC regulations."

Despite recent signs of a thaw in U.S.-Cuba relations, Washington continues to enforce a near-total embargo on trade with the Caribbean nation using a range of laws – including the Trading with the Enemy Act.

Ficht said he had used PayPal about 20 times previously and always assumed he was dealing with a Canadian company because he was using their Canadian website.

"It almost seems to be slightly deceptive," he said.

PayPal is one of many major companies, including Amazon and Google, which use the .ca internet domain name to "masquerade" as Canadian companies, according to Tom Keenan, a research fellow at the Canadian Defence and Foreign Affairs Institute.

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Despite a recent thaw in relations, America still maintains a trade embargo with Cuba. (CBC)

Despite being an American company, PayPal Canada is allowed to use .ca because it has registered its trademark in Canada and maintains an address in Toronto.

Keenan said such companies should be required to declare that transactions are being processed in the U.S. and will be subject to its laws.

"They don't have to go into all the details of the Patriot Act, [but] at least tell us that this transaction is going to be processed in another country. That seems only fair," said Keenan, the author of the book Technocreep: The Surrender of Privacy and the Capitalization of Intimacy.

Customer, tour operator cancel accounts

Both Ficht and the tour company say they are through with PayPal.

"I will never use PayPal again until that has changed," said Ron Berezan, owner of the Urban Farmer in Powell River, B.C.

"To tell me this is unacceptable is an infringement on my own personal freedoms and the values of Canada, which of course vis-a-vis Cuba, are very different," Berezan said.

"It was a fairly easy conclusion on my part," Ficht said.

"I don't really need [PayPal] that badly that I have to be further involved in something that doesn't apply."

Jan Ficht will still get to go on the Cuban garden tour – the Fichts paid Berezan the old-fashioned way, with a cheque.

Statement from PayPal Canada spokeswoman Malini Mitra

"As a U.S. company, PayPal and all its foreign subsidiaries have to comply with the Office of Foreign Assets Control (OFAC) sanctions regulations. With respect to Cuba, payments involving non­-US customers, have to be declined as per OFAC regulations.

We have taken steps to improve the way we handle payments that may potentially violate U.S. sanction rules by placing them under review for a 72­-hour period instead of automatically declining these payments. Our goal is to deliver a seamless payment experience for all our customers. As part of the review process, we sometimes ask questions related to a customer’s business and recent transaction history. The intent there is to clarify and help process the payment rather than decline it, in the event that it does not fall under U.S. sanction rules.

We are sorry for upsetting this customer. We will take your feedback into serious consideration as we take a closer look at our payment review process for Cuba-­related transactions."