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.