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#2247239 - 01/05/21 10:13 PM SAR or not to SAR?
Jenny Roberts Offline
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Joined: Feb 2014
Posts: 139
Tennessee
In reviewing hemp growing companies, if they have incoming & outgoing wires that state that the funds are from marijuana legal states, how do you determine whether to file a SAR or not? I have some businesses where the wires going to or coming from I know are hemp processing companies but on some of the businesses, I cannot determine exactly what their business purpose is. My gut says to continue to file a SAR but it gets exhausting filing continuing SAR's all of the time on them.....

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#2247241 - 01/05/21 10:31 PM Re: SAR or not to SAR? Jenny Roberts
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 5,827
Illinois
Have you contacted your customer tto find out the business purpose for the wires that you cannot explain?

Hemp is legal at the federal level. FinCEN guidance this year made it clear that we do not file Marijuana SARs on hemp businesses. Have you concluded that your customer is actually involved in marijuana which is illegal at the federal level?

I'd be doing more investigating before I conclude a SAR is needed.
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#2247296 - 01/06/21 10:19 PM Re: SAR or not to SAR? Jenny Roberts
Jenny Roberts Offline
100 Club
Joined: Feb 2014
Posts: 139
Tennessee
No, I have not contacted the customer but will. Thanks!

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#2247297 - 01/06/21 10:21 PM Re: SAR or not to SAR? Jenny Roberts
Jenny Roberts Offline
100 Club
Joined: Feb 2014
Posts: 139
Tennessee
I do have another question about this, what if it is a customer that sells plant nursery equipment and the incoming wires are from states where marijuana is legal and the business sending the wire sells marijuana?

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#2247303 - 01/06/21 10:54 PM Re: SAR or not to SAR? Jenny Roberts
RockChucker, CAMS Offline
Diamond Poster
Joined: Jul 2013
Posts: 1,526
The Country
Would you file a SAR on HomeDepot if it sold some plant supplies to a marijuana grower?
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A successful man is one who can lay a firm foundation with the bricks others have thrown at him.
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#2247308 - 01/07/21 01:50 PM Re: SAR or not to SAR? RockChucker, CAMS
Jenny Roberts Offline
100 Club
Joined: Feb 2014
Posts: 139
Tennessee
Good point, I had a previous auditor that wanted me to file on everyone so I think they had me paranoid about everything!! lol

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#2247577 - 01/12/21 10:32 PM Re: SAR or not to SAR? Jenny Roberts
StacyLitkeGCV Offline
New Poster
Joined: Nov 2020
Posts: 9
While Hemp is legal, it does get some extra scrutiny because the only way to tell the difference between hemp and marijuana is a lab test. This makes it a good front for selling marijuana.

The goal in monitoring your accounts tied to hemp is to make sure that the activity is "normal and expected" for a hemp business. A wire in for the purchase of product would not be unusual, even from a marijuana legal state. You can certainly request an invoice from the customer to substantiate it was a legal sale, or as Brian suggested, have a conversation with them. And it's likely as part of your EDD, you're getting financials, so does the wire seem in line with those numbers?

If you've done a little research and it seems to be part of their normal operating patterns and within the constraints of hemp, then I wouldn't think you'd need to keep filing SARs. Save them for when they get activity that's not typical for them, and isn't easily explained.

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