We do not provide services to the cannabis industry.
West Coast AML Services was created to manage the unique challenges of banking state-licensed marijuana-related businesses* (MRBs) and minimize the possibility of prosecution under federal money laundering statutes (18 U.S.C. §§ 1956 and 1957) and regulatory enforcement actions. We prepare risk assessments focused on U.S. Department of Justice enforcement priorities and create the structure, policies, procedures and controls of risk management programs within the context of BSA/AML compliance specific to marijuana-related businesses. We recommend enhancements to existing programs, tailor training for BSA officers and senior management, and advise the Board on oversight.
West Coast AML Services crafts risk assessments focused on U.S. Department of Justice enforcement priorities, FFIEC regulatory expectations and state regulatory enforcement environments. Our assessments include risk management considerations pertaining to ancillary accounts, which are those accounts held by individuals and entities that are not involved in the production, distribution, transportation or sale of marijuana but who provide lawful goods and services to MRBs. We present the risk assessment to the financial institution's Board of Directors and provide the board with cannabis banking BSA training.
West Coast AML Services provides AML subject matter expertise to identify, mitigate and manage compliance risks associated with the development and strategic implementation of a MRB banking program. We prepare risk assessments and create the structure, policies, procedures and controls of risk management programs within the context of BSA/AML compliance specific to MRBs. We then "kick-start" the program and guide the institution through the pain-points of banking the state-legal cannabis industry.
West Coast AML Services examines compliance programs with firsthand insight into the prosecution of financial institutions and bankers by the Department of Justice. We have practical knowledge from regulator examinations of MRB compliance programs we created and/or existing programs that we enhanced. We recommend corrective actions, program enhancements, training for BSA officers and senior management, advise the Board on oversight and certify programs that we believe would meet the high expectations of the Federal law enforcement community and the regulatory requirements of the FFIEC. We certify MRB banking programs, not individuals.
Our training department offers a pilot program stakeholders forum consisting of SME presentations on managing the unique compliance risks of MRB banking, the Federal landscape surrounding MRB banking, and the cannabis industry – license application to banking relationship.
The BSA’s criminal penalties for failing to establish an AML program appropriately designed to guard against money laundering through financial institutions (31 U.S.C. Section 5322 and 31 C.F.R. Section 1010.840) are not altered by the proposed SAFE Banking Act.
“If they have rigorous compliancy all I can really say is they are less likely to get our attention, but I can’t go out and tell banks if you have rigorous compliance, you have immunity.”
United States Attorney for the District of Colorado
It is expected that the Department of Justice will continue to assess the quality and effectiveness of state and local regulatory and law enforcement environments when creating targeting priorities. Keep in mind, FinCEN's guidance clarifying BSA/AML expectations for financial institutions providing services to state-regulated MRBs does not alter any provision of the BSA. Further, the proposed SAFE Banking Act does not mitigate the risk that marijuana-related businesses deposit proceeds into financial institutions from the sale of marijuana accomplished in any manner outside of state licensing and regulatory requirements and Department of Justice marijuana-related conduct enforcement priorities.
In states that have decriminalized marijuana, we have seen an influx of foreign money used to establish grow operations, with much of the marijuana being destined for out-of-state consumers.
The recent HIDTA Insight Report on marijuana production, distribution, and consumption in Oregon confirms what we already know—it is out of control. Overproduction is rampant and the illegal transport of product out of state—a violation of both state and federal law—continues unchecked.
We Anticipate focusing marijuana enforcement efforts on overproduction, targeted sales to minors and organized crime and interstate transportation of drug proceeds. To that end, federal investigators will continue to police the Commonwealth for incoming or outgoing shipments of cash as well as use of the federal banking system.
For states such as California that have enacted laws to authorize the production, distribution and possession of marijuana, the Department of Justice expectation is that these states would establish strict regulatory schemes that protect the federal enforcement priorities. Based on assurances that those states will impose an appropriately strict regulatory system, the Department deferred its right to challenge their legalization laws. But if any of the stated harms do materialize—either despite a strict regulatory scheme or because of the lack of one—federal prosecutors will act aggressively to bring individual prosecutions focused on federal enforcement priorities and the Department may challenge the regulatory scheme themselves in these states.
Terry M. Neeley
Founder / Managing Director
Ms. Kaur drives the firm's business development opportunities throughout the U.S. and Canada.
With nearly a decade in bank operations, and more recently MRB banking, she is well-versed with this unique field and the ever increasing regulatory challenges that financial institutions face.