United States: Alibaba and AUS pay $600M under DOJ non-prosecution deal—what changes next

On July 1, 2026, the Department of Justice announced a $600 million non-prosecution resolution with Alibaba Group Holding Limited and its U.S.-based payments processor, AUS Merchant Services (formerly known as Alipay US). The deal resolves allegations that the companies failed to prevent merchants from selling and importing illegal pharmaceuticals, controlled substances, listed chemicals, and pill presses into the United States through Alibaba.com and AliExpress.com—and that AUS’s payment and anti-money-laundering controls did not stop some of the same prohibited trade.

What DOJ says went wrong

DOJ says Alibaba acknowledged that, from January 2016 through December 2024, merchants using Alibaba.com and AliExpress.com conducted approximately 80,000 product sales involving imports into the United States that violated the Federal Food, Drug, and Cosmetic Act (FDCA) and other federal laws. DOJ also says the combined gross merchandise value of these transactions exceeded $200 million.

DOJ adds that, during the investigation, federal law enforcement conducted over 40 undercover purchases of pharmaceuticals and counterfeiting equipment that were illegal to be imported into the United States.

DOJ further alleges that Alibaba’s compliance controls were inadequate, even though the company had policies restricting prohibited products. DOJ also points to Alibaba’s in-platform messaging feature, which some merchants allegedly used to facilitate unlawful transactions. In some cases, DOJ says merchants directed buyers to third-party encrypted messaging platforms.

On the payments side, DOJ says AUS admitted that between January 2020 and December 2023 it accepted U.S. dollar-denominated payments through credit cards and wire transfers routed through U.S. bank accounts before transferring the funds offshore for settlement. DOJ says AUS implemented a transaction-monitoring system that did not fully incorporate certain wire-transfer data, so monitoring did not always identify transactions involving payments from high-risk jurisdictions or multiple payors on a single invoice. DOJ also alleges AUS’s anti-money-laundering compliance program failed to prevent some Alibaba merchants from using AUS payment-processing services to facilitate the sale and importation of prohibited products into the United States.

DOJ says that, in certain instances, rather than systematically restricting merchants identified as selling prohibited merchandise, AUS instead reported those merchants to Alibaba—and at least one merchant allegedly continued selling prohibited products to U.S. buyers after AUS investigated and reported it.

The $600 million deal: how the money is split

Under the agreements described by DOJ, Alibaba and AUS agreed to pay monetary penalties and forfeitures totaling $600 million:

Alibaba: $125 million criminal monetary penalty plus $200 million forfeiture
AUS Merchant Services: $85 million criminal monetary penalty plus $190 million forfeiture

What changes next—especially for AUS payment compliance

Because the resolution is a non-prosecution agreement, the compliance obligations matter as much as the payment. DOJ says both companies agreed to enhance compliance programs and to continue cooperating with the government.

For AUS, the agreement’s compliance program is designed to detect and prevent violations tied not only to the Bank Secrecy Act and anti-money-laundering (BSA/AML) framework, but also to FDCA violations through AUS’s payment-processing services.

The AUS agreement also includes specific, ongoing reporting obligations. It requires quarterly reports that list:

all Suspicious Activity Reports (SARs) filed, and
any credible allegations of FDCA or Controlled Substances Act violations that AUS learns were committed by users of its payment-processing services in the United States.

What to watch going forward

Two practical points for U.S. readers and marketplace users:

Expect tighter payment screening and reporting. DOJ’s description focuses on payment-monitoring gaps and weak linkage between monitoring and prohibited-product risk. More transaction review, merchant-risk scrutiny, and SAR-related reporting are likely to follow.
Non-prosecution is not blanket immunity. The AUS agreement says it can be subject to prosecution if AUS knowingly and materially fails to implement required compliance provisions (or otherwise materially breaches the agreement) for conduct related to the matters addressed in the agreements.

For consumers and small businesses, this case is a reminder that online commerce enforcement increasingly targets the payments layer—not just the listing page—when regulated, dangerous, or unlawful goods are allegedly able to flow to U.S. buyers.

Sources

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