Beneficial Ownership and Marijuana Related Businesses – A high risk situation that can be mitigated

Published on February 13, 2017
Beneficial Ownership and Marijuana Related Businesses – A high risk situation that can be mitigated
With the impending implementation of the Beneficial Ownership rule and the ever increasing establishment of Marijuana Related Businesses (MRBs), financial institutions are faced with a two phased challenge: How to properly manage a due diligence program for MRB beneficial owners and how to identify customers that might be linked to the Beneficial Owner of a MRB. The linkage issue is very important because a linked association of an MRB owner to a non MRB account sets-up the ability to bring MRB sourced funds into a non-MRB account. That is a compliance red flag.

Two tools need to be in the compliance toolbox. First, the financial institution should have access to a comprehensive data file containing the names of licensed MRBs and the Beneficial Owners of the MRB. Secondly, the compliance officer needs to have access to a data file that contains specific corporate registration/beneficial officer information about companies. This mix of data provides the compliance officer with the ability to identify individuals and entities that are linked by corporate construct. That data should be supported by an open source negative news service that specifically identifies risk relevant behaviors and associations. A work audit trail memorializes that the due diligence work was completed.

NominoData has announced their MRB Beneficial Ownership data file now contains over Eight (8) Thousand Beneficial owners of MRBs, this file is an enhancement of the primary MRB list containing the licensed MRBs in the 28 “legalized” states. All of this data can be linked with NominoData’s industry leading due diligence solution named One Click Compliance.

For more information please contact rgoldfinger@nominodata.com or visit www.nominodata.com