FinCEN's BSA Guidance On Marijuana Businesses.pdf

- Purpose: FinCEN issues guidance to clarify Bank Secrecy Act (BSA) expectations for financial institutions serving marijuana-related businesses (MRBs), aligning with federal and state law enforcement priorities.

- Background:
- Federal law prohibits marijuana manufacture, distribution, and dispensing.
- 20 states and D.C. have legalized certain marijuana-related activities.
- DOJ's Cole Memo outlines enforcement priorities: preventing distribution to minors, revenue going to criminal enterprises, diversion to other states, use as a cover for other illegal activities, violence and firearms use, drugged driving, public health consequences, public lands cultivation, and possession/use on federal property.

- Financial Institutions' Role:
- Decide to open, close, or refuse accounts based on risk assessment, business objectives, and capacity to manage risks.
- Conduct thorough customer due diligence, including verifying state licenses, reviewing license applications, understanding normal business activity, and ongoing monitoring for suspicious activity and red flags.
- Consider if MRB implicates Cole Memo priorities or violates state law during risk assessment.
- File Suspicious Activity Reports (SARs) if transactions involve known, suspected, or suspected illegal activity, regardless of state marijuana legalization.

- BSA Obligations:
- Financial institutions must file SARs for MRBs, as required by FinCEN regulations.
- SARs should include information pertinent to law enforcement priorities.