Anti-money laundering laws presents accounting dilemma for US legal pot businesses

The growing number of legal pot businesses in the United States is challenging anti-money laundering rules. According to a Businessweek report, businesses who deal with the sale of marijuana, which had been legalized lately in some states, are forced to operate in cash from paying bills, taxes to managing books.

The report reiterated that current laws against money laundering prohibit banks from processing payments or creation and management of accounts that deal in drugs that are still recognized by federal law as illegal. The governors of Washington and Colorado, in acknowledgement to this dilemma, has urged bank regulators to introduce businesses following the pot regulations of the states as exceptions to the anti-money laundering legislation. Yesterday, the Denver City Council has passed a resolution, which wa obtained by Businessweek, and read that federal action should be done swiftly by providing guidance to financial institutions in serving legal marijuana businesses.

A Wall Street Journal report said that the US Justice Department had been working on a memo to do just that. However, the draft will reportedly focus on the priorities of the state prosecutors, which are to go after larger criminal activity, as oppose to providing a clear outline on what banks could and could not do with regard to accepting business clients dealing with marijuana sales. Businessweek also said that other agencies who have involved themselves in the discussion regarding allowing banks to take in client in the marijuana business are Financial Crimes Enforcement Network, the Federal Deposit Insurance Corp., the Federal Reserve Board, the Office of the Comptroller of the Currency, and the National Credit Union Administration.

Meanwhile, four Washington senators have submitted a proposed bill on the creation of a state bank solely for transacting the marijuana businesses of the state. Bob Hasewaga said about his bill, "They are hoping against hope that the Treasury Department and the financial regulators are going to come up a letter similar to what the U.S. attorney general produced. The only alternative right now is cash-based, which is totally unacceptable and cannot adhere to the attorney general's guidelines because it can't track every last dollar."

Tags

Denver City Council, US Justice Department, inancial Crimes Enforcement Network, the Federal Deposit Insurance Corp., the Federal Reserve Board, the Office of the Comptroller of the Currency

© 2023 Lawyer Herald All rights reserved. Do not reproduce without permission.