Update, Monday August 26, 2:25 p.m.:
Hours after the publication of the Free Beacon’s story, CLW’s executive director said that Western Union has decided to permit its wire transfer.
“Based on what they said, the decision to not allow CLW to send money was an internal process in which Western Union periodically verifies customer information in order to prevent things like fraud,” said Li Qiang in an email.
Qiang said a Western Union representative also assured him that the rejection was “purely internal” and not related to pressure from the Chinese government.
[Original story below]
An activist group that investigates abusive labor practices in China said this week that Western Union has refused to allow wire transfers to its members in the country unless the group provides confidential information about its donors and investigative contracts, potentially inviting heightened scrutiny from the Chinese government.
China Labor Watch (CLW) attempted to send $5,000 to its investigators in China through Western Union on Aug. 14. When one of the group’s investigators went to the Western Union office in China the next day to collect the transfer, the bank informed him that the funds had been frozen.
Western Union officials refused to unfreeze the funds unless CLW disclosed information about its donors and investigators, said Li Qiang, the group’s executive director, in an interview through an interpreter.
“The things they asked us to provide are things we can’t provide,” Qiang said. “They said we can never use Western Union again after we didn’t provide these documents unless we provide the documents in regards to who our funders are and information about our relationships with our investigators.”
CLW is a nonprofit organization that assesses the conditions in Chinese factories producing toys, clothing, electronics, and other goods for large corporations. Its 2012 investigation of eight Samsung factories in China found repressive conditions for workers, including more than 100 hours of forced overtime work per month, unpaid work, standing for 11 to 12 hours while working, underage employment, and verbal and physical abuse. CLW also grants humanitarian aid to other labor groups and activists in China.
Maya Wang, a researcher for Human Rights Watch’s Asia Division, said in an interview from Hong Kong that activist groups promoting rights in China face numerous obstacles due to government pressure.
Many are more service-oriented and register as businesses rather than nonprofits, which must secure the support of government agencies.
However, the groups’ strategy of evading stringent government requirements also blunts their activism and makes them less likely to challenge the government’s positions on issues such as human rights, Wang told the Washington Free Beacon.
“The Chinese government has recognized that there is serious social conflict in society, and it has discussed this in state media as well,” she said.
“Instead of relieving some of this tension by allowing civil society to step in, the government has tightened in certain areas—especially in terms of freedom of expression and rights activists.”
Wang added that some of the activist groups decline to accept foreign funding and focus on raising domestic funds, which are scarce. Other groups that import funding in roundabout ways—like CLW—risk more acute monitoring by the Chinese government.
Qiang told the Free Beacon that CLW tried to present Western Union with its annual report, which is conducted by an independent auditor and includes its spending figures in China.
Yet the bank did not accept the report because it lacked specific information about CLW’s donors and investigators, he said.
Western Union’s guidelines state that individuals are only required to provide the recipient’s first and last name, country, and city. Officials then verify the recipient’s identity with an ID before completing the wire transfer.
The bank’s denial of CLW’s wire transfers will prompt the group to use another method of transferring money to its investigators such as bank accounts, which can be traced directly to individuals, Qiang said. That method would open up investigators to more surveillance by the Chinese government.
“Not using Western Union and our activities of sending money becoming more transparent will lead to investigators getting money and having their identities revealed in that process,” he said. “It’s not convenient in that way—there are some risks involved.”
CLW sent about $500,000 to investigators in China through Western Union in the last 13 years without experiencing problems.
“Maybe because we used Western Union all these years, it was noticed by the [Chinese] government. It could be something like that,” Qiang added.
Wang agreed that the government might be involved.
“It’s unclear what the role of the government is at this point, but it suggests that the government is watching its transfers closely and might be behind trying to block these transfers.”
Dan Diaz, vice president of global corporate communications for Western Union, said in an email that the bank takes “compliance seriously.”
“Periodically, we contact customers to verify information in connection with money transfers sent through the company. This enables us to prevent and detect fraud and to meet our important regulatory obligations. In some instances, when the requested documentation is not satisfactory, or is not furnished, we decline the transaction,” he said in the email.
“As a matter of company policy, we do not disclose customer transaction data or information.”
When further pressed on CLW’s concerns about the privacy of its donors and increased oversight from the Chinese government, Diaz did not respond.