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Home » FinCEN issues BSA/AML guidance on hemp-related business
Policy & Issues

FinCEN issues BSA/AML guidance on hemp-related business

July 6, 2020
Lending compliance: Focus on three top priorities

The Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued guidance to address questions related to Bank Secrecy Act/Anti-Money Laundering (BSA/AML) regulatory requirements for hemp-related business customers. This covers hemp-related businesses, not marijuana-related businesses, which will fall under FinCEN’s 2014 guidance.

The guidance is intended to explain how financial institutions can conduct due diligence for hemp-related businesses and identifies the type of information and documentation financial institutions can collect from hemp-related businesses to comply with BSA regulatory requirements. While the guidance follows due diligence procedures likely already in place at your credit union for meeting BSA/AML expectations, SAR reporting, and CTR filings there are few clarifications.    

Expectations under BSA/AML include:

  • CDD (customer due diligence) for hemp-related businesses is required and appropriate risk-based procedures need to be in place for ongoing CDD;
  • Credit unions need to confirm that the hemp-related business is complying with state, tribal government or U.S. Department of Agriculture (USDA) requirements. Obtaining a copy of the business license is way to confirm compliance;
  • Information regarding beneficial owners must be included. There may be additional information to obtain based on the assessment of the hemp-business’ risk profile, including:
    • Crop inspection reports
    • Crop testing reports
    • License renewals
    • Updated attestations from the business
    • Correspondence from with the state, tribal governments or USDA

Detailed analysis of the guidance can be found on CUNA’s CompBlog.

KEYWORDS compliance
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