Financial Regulatory Forum

New U.S. prosecution easing on marijuana does not cut laundering risk for banks, sources say

By Brett Wolf, Compliance Complete

NEW YORK, Sept. 6 (Thomson Reuters Accelus) - A Justice Department memorandum circulated last week that gave U.S. states leeway to experiment with pot legalization failed to address the provision of financial services to marijuana dispensaries, which suggests the Obama administration still is not prepared to allow money from state-recognized pot sales to flow into banks and other financial institutions, money-laundering policy experts said.

“The Justice Department could have gone the next step and at least applied its new standards to financial transactions that derive from medical marijuana proceeds. That at least would have been an attempt to take the burden away from the financial services community to make some very difficult determinations,” said Peter Djinis, a former regulatory policy official with the U.S. Treasury Department’s anti-money laundering unit, the Financial Crimes Enforcement Network (FinCEN).  (more…)

States’ legalization of marijuana sales fails to address legal quandary for banks

By Brett Wolf

ST. LOUIS/NEW YORK (Thomson Reuters Accelus) - Although Colorado and Washington became the first states to legalize the recreational use and sale of marijuana with the passage of ballot measures on Tuesday, financial institutions across the country should continue to refuse to do business with marijuana businesses, anti-money laundering experts said.
“If financial institutions are federally licensed or insured, they must comply with federal regulations, and those regulations are clear about conducting financial transactions with money generated by the sale of narcotics,” said Jim Dowling, a former Internal Revenue Service special agent who also acted as an anti-money laundering advisor to the Office of National Drug Control Policy.  (more…)

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