New FinCEN Due Diligence Guidance for Hemp-Related Businesses
On June 29, 2020 (“June Guidance”), the Financial Crimes Enforcement Network (FinCEN) issued additional guidance for financial institutions providing, or considering providing, financial services for hemp-related businesses. The June Guidance supplements the interagency statement issued on December 3, 2019, and provides clarity on what steps a financial institution can take to conduct due diligence on hemp-related businesses in order to comply with BSA requirements. The new guidance is detailed enough that FinCEN should easily accomplish its goal of making transparent financial services readily available to hemp-related businesses.
Specifically, FinCEN directed financial institutions to conduct customer due diligence (“CDD”) of hemp-related businesses in accordance with their current risk-based policies and procedures, including those that apply to ongoing account monitoring. Rather than mandate specific due diligence requirements, FinCEN said that the information sought by a financial institution should depend on the risk attributed to each type of customer after conducting an appropriate risk assessment. Nevertheless, FinCEN did provide several examples of types of information that may be gathered to help ensure that a financial institution knows its hemp-related business customers and that it can identify and report suspicious activity, including those red-flag activities outlined in the June Guidance.
Notably, the June … Keep reading