Agencies Clarify SAR Obligations For Hemp Transactions

The Federal Reserve Board, the FDIC, FinCEN, the OCC and the Conference of State Bank Supervisors (collectively, the "agencies") clarified the legal status of hemp and Suspicious Activity Report ("SAR") obligations for banks under the Bank Secrecy Act ("BSA").

The agencies opined that:

• banks do not have to file a SAR for customers engaged in hemp production solely because the business involves hemp, since it is no longer considered a controlled substance, but still must file a SAR if there are indicia of "suspicious activity";
• customers of banks engaged in hemp-related businesses are themselves accountable for complying with the related requirements; and
• banks must establish and maintain a BSA/AML compliance program that can sufficiently address the "complexity and risks involved."