Due diligence on serving hemp-related businesses issued by financial crimes law enforcement, including types of info, documentation needed

Conducting due diligence on hemp-related businesses – on the types of information and documentation that may be required to collect from those entities – is outlined in guidance for banks and credit unions issued Monday by the Treasury’s financial crimes enforcement unit.

Treasury’s Financial Crimes Enforcement Network (FinCEN) said the financial institutions should obtain basic identifying information about hemp-related businesses according to their customer identification programs and risk-based due diligence processes.

“For customers who are hemp growers, financial institutions may confirm the hemp grower’s compliance with state, tribal government, or the USDA licensing requirements, as applicable,” by obtaining a written attestation from the grower that they carry a valid license, or a copy of the license, FinCEN wrote in its guidance.

FinCEN said the clarification contained in the guidance “is intended to enhance the availability of financial services for, and the financial transparency of, hemp-related businesses in compliance with federal law.”

The agency said the guidance provides financial institutions Bank Secrecy Act/anti-money laundering (BSA/AML) risk considerations only for hemp-related businesses (that is, businesses or individuals that grow hemp, and processors and manufacturers who purchase hemp directly from such growers). The guidance, the agency said, does not replace or supersede FinCEN’s previous guidance on the BSA expectations regarding marijuana-related businesses (also known as its 2014 Marijuana Guidance).

FinCEN Guidance Regarding Due Diligence Requirements under the Bank Secrecy Act for Hemp-Related Business Customers

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