With the recent legalization of marijuana and marijuana-related businesses in many states, the Financial Crimes Enforcement Network (FinCEN) “got a whiff of the fact that financial institutions provide services” to this sector and published a guidance to clarify the customer due diligence expectations and reporting requirements for the institutions, according to Jay Baris and Oliver Ireland in Morrison & Foerster’s The BD/IA Regulators blog.
The authors say it’s important to note that FinCEN implements the requirements set out under the federal Bank Secrecy Act, which remain unaffected by any state law. This means the financial institutions must still file a “suspicious activity report” when it’s suspected a transaction involves illicit financial activity. Sound a bit hazy? “The new guidance clarifies how financial institutions can provide services to marijuana-related business in a manner consistent with their obligations under the BSA,” say the authors.
