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Compliance Outlook

Compliance Outlook. Bank Secrecy Act. Marijuana Businesses. BSA and Marijuana Related Business. FinCEN Director Jennifer Shasky Calvery stated:

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Compliance Outlook

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  1. Compliance Outlook Bank Secrecy Act Marijuana Businesses

  2. BSA and Marijuana Related Business • FinCEN Director Jennifer ShaskyCalverystated: • “Now that some states have elected to legalize and regulate the marijuana trade, FinCEN seeks to move from the shadows the historically covert financial operations of marijuana businesses, our guidance provides financial institutions with clarity on what they must do if they are going to provide financial services to marijuana businesses and what reporting will assist law enforcement.”

  3. BSA and Marijuana Related Business States Allowing Sale of Marijuana (In Some Form) Alaska Arizona California Colorado Connecticut Delaware Hawaii Illinois Maine Massachusetts Michigan Montana Nevada New Hampshire New Mexico Oregon Rhode Island Vermont Washington Washington DC

  4. BSA and Marijuana Related Business Five US states enacted laws that legalized medical marijuana with a physician's prescription: Maryland also passed a law favorable to marijuana; however, it does not legalize its use. Connecticut Louisiana New Hampshire Virginia Wisconsin

  5. BSA and Marijuana Related Business The decision to open, close, or refuse any particular account or relationship should be made while considering a number of factors including the businesses objectives, an evaluation of the risks associated with offering a particular product or service.

  6. BSA and Marijuana Related Business Member Due Diligence • Verifying the business is duly licensed and registered; • Reviewing the license application to operate marijuana-related business; • Requesting from state licensing and enforcement authorities available information about the business and related parties; • Developing an understanding of the normal and expected activity; • Ongoing monitoring of publicly available sources for adverse information about the business and related parties; • Ongoing monitoring for suspicious activity; and • Refreshing information obtained as part of member due diligence.

  7. BSA and Marijuana Related Business Cole Memo Priorities Prevention • Distribution of marijuana to minors; • Revenue from the sale of marijuana from going to criminal enterprises; • Diversion of marijuana from states where it is legal under state law to other states; • State-authorized marijuana activity from being used as a cover; • Violence and the use of firearms in the distribution of marijuana; • Drugged driving and other adverse public health consequences; • Growing of marijuana on public lands; and • Marijuana possession or use on federal property.

  8. BSA and Marijuana Related Business The credit union is required to file a SAR if, consistent with FinCEN regulations, it knows, suspects, or has reason to suspect that a transaction conducted or attempted by, at, or through the financial institution: • Involves funds derived from illegal activity or is an attempt to disguise funds derived from illegal activity; • Is designed to evade regulations promulgated under the BSA, or • Lacks a business or apparent lawful purpose.

  9. BSA and Marijuana Related Business Marijuana Limited SAR • Identifying information of the subject and related parties; • Addresses of the subject and related parties; • The fact that the filing institution is filing the SAR solely because the subject is engaged in a Marijuana-Related business; and • The fact that no additional suspicious activity has been identified.

  10. BSA and Marijuana Related Business Marijuana Priority SAR • Identifying information of the subject and related parties; • Addresses of the subject and related parties; • Details regarding the enforcement priorities the financial institution believes have been implicated; and • Dates, amounts, and other relevant details of financial transactions involved in the suspicious activity.

  11. BSA and Marijuana Related Business Marijuana Termination SAR • If a credit union deems it necessary to terminate a relationship with a Marijuana-Related business in order to maintain an effective anti-money laundering compliance program, it will file a SAR and note in the narrative the basis for the termination.

  12. Thank you for joining me for this review of the FinCEN’s BSA Requirements Stay Tuned… Shawn Wolbert, CIA, CUCE Director CU System Relations 101 S. Washington Square, Suite 900 Lansing, MI 48933-1703 (800) 262-6285 Ext. 486 (734) 658-5427 Mobile Follow me on Twitter – Shawn Wolbert @ Go2CUGuru

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