The Financial Crimes Enforcement Network today issued guidance for financial institutions on how they can conduct due diligence on hemp-related businesses and on what types of information and documentation they may be required to collect from these businesses to comply with Bank Secrecy Act requirements.
Institutions should obtain basic identifying information about hemp-related businesses according to their customer identification programs and risk-based due diligence processes, FinCEN said. Additionally, “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.
The guidance also noted that institutions are not required to file a Suspicious Activity Report on customers solely because they are engaged in the growing or cultivation of hemp. “For hemp-related business customers, financial institutions are expected to follow standard SAR procedures and file a SAR if the financial institution becomes aware, in the normal course of business, of suspicious activity.”
In cases where transactions of a hemp-related business are comingled with marijuana-related activities, financial institutions should apply FinCEN’s 2014 guidance on marijuana when determining whether and how to file a SAR. Read the guidance.