By: Nash Cullens
On December 3, 2019, the Board of Governors of the Federal Reserve System, the FDIC, FinCEN, the OCC in consultation with the Conference of State Bank Supervisors issued a statement regarding the legal status of commercial growth and production of hemp and requirements of Banks relative to the Bank Secrecy Act. Due to the 2018 Farm Bill removing hemp from the Schedule I controlled substance list under the Controlled Substance Act, Banks are no longer required to file Suspicious Activity Reports on legal hemp related activities solely because they are engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations. Banks are still required to follow standard SAR filing procedures and/or file a SAR in the case any suspicious activity arises. Bank customers participating in hemp-related business activities are responsible for complying with the requirements of the 2018 Farm Bill and applicable state regulations. Banks should consider filing SARs as appropriate when hemp related businesses are found to be operating in contravention of state and federal requirements.
Key points per the joint press release:
For more guidance in relation to Marijuana Related Businesses Banks should reference FinCEN guidance FIN-2014-G001.
For more information relative to SARs and legal hemp related activities please refence the following link. https://www.fdic.gov/news/news/press/2019/pr19115.html
If your bank operates in Georgia, the Department of Agriculture’s website notes that hemp related agriculture licenses are not available at this time and will not be available until the state finalizes its hemp guidelines. http://agr.georgia.gov/georgia-composing-plan-to-comply-with-federal-and-state-hemp-guidelines.aspx
On December 3, 2019, the Board of Governors of the Federal Reserve System, the FDIC, FinCEN, the OCC in consultation with the Conference of State Bank Supervisors issued a statement regarding the legal status of commercial growth and production of hemp and requirements of Banks relative to the Bank Secrecy Act. Due to the 2018 Farm Bill removing hemp from the Schedule I controlled substance list under the Controlled Substance Act, Banks are no longer required to file Suspicious Activity Reports on legal hemp related activities solely because they are engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations. Banks are still required to follow standard SAR filing procedures and/or file a SAR in the case any suspicious activity arises. Bank customers participating in hemp-related business activities are responsible for complying with the requirements of the 2018 Farm Bill and applicable state regulations. Banks should consider filing SARs as appropriate when hemp related businesses are found to be operating in contravention of state and federal requirements.
Key points per the joint press release:
- Consistent with the USDA interim final rule, hemp may be grown only with a valid USDA issued license or under a USDA-approved state or tribal plan. Research and development initiatives authorized under the Agricultural Act of 2014 (2014 Farm Bill) remain in effect until one year after the effective date of the USDA interim final rule.
- A state or tribal government may prohibit the production of hemp, even though it is legal under federal law. The 2018 Farm Bill provisions related to USDA-approved state or tribal plans did not preempt state or tribal laws regarding the production of hemp that are more stringent than federal law.
- Separately, marijuana is still a controlled substance under federal law. The 2018 Farm Bill amended the definition of marijuana only to exclude hemp from the Controlled Substances Act.
For more guidance in relation to Marijuana Related Businesses Banks should reference FinCEN guidance FIN-2014-G001.
For more information relative to SARs and legal hemp related activities please refence the following link. https://www.fdic.gov/news/news/press/2019/pr19115.html
If your bank operates in Georgia, the Department of Agriculture’s website notes that hemp related agriculture licenses are not available at this time and will not be available until the state finalizes its hemp guidelines. http://agr.georgia.gov/georgia-composing-plan-to-comply-with-federal-and-state-hemp-guidelines.aspx
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