PayPal has agreed to pay a $7.7m fine to the US Treasury Department to settle allegations that it allowed transactions that violated sanctions against Iran, Cuba and Sudan.

The agency said PayPal had failed to adequately screen and prevent transactions to users in the sanctioned countries.

The US Treasury Department said the payments included $7,000 in transactions from Kursad Zafer Cire, a Turkish man who has been involved in the proliferation of weapons of mass destruction.

Nearly 500 PayPal transactions worth almost £30,000 ($44,000) between 2009 and 2013 potentially violated US sanctions, according to the Treasury department.

The company added it had voluntarily reported certain payments it had processed between 2009 and 2013 to the Treasury’s Office of Foreign Assets Control (Ofac).

PayPal said that a delay in scanning had allowed these payments to be processed. The company neither admitted nor denied it had violated the sanctions.

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A statement from the Office of Foreign Assets Control (OFAC) said: "For several years up to and including 2013, PayPal failed to employ adequate screening technology and procedures to identify the potential involvement of US sanctions targets in transactions that PayPal processed.

"As a result of this failure, PayPal did not screen in-process transactions in order to reject or block prohibited transactions pursuant to applicable US economic sanctions program requirements."

PayPal CCO Gene Truono in a statement said: "We recognise that prior to April 2013, PayPal did not have a system that could scan payments in real time in order to block prohibited payments."