In some parts of the world, the production, distribution, sale, and consumption of recreational cannabis is legal. This is the case in many parts of the USA and Canada, but over here, except in some limited medical circumstances, it remains illegal.
This creates a Proceeds of Crime issue for anyone who has a legal business abroad and who wants to invest the profit in property or a business over here, even if it is for purposes unrelated to cannabis. As we know, you commit a crime if you are involved in a transaction which uses the proceeds of a crime and in this country making a profit from cannabis is generally still a crime. Under the AML regulations, no distinction is made as to where the crime occurred nor whether the proceeds were legally obtained there. So, if you make money in the USA as a successful cannabis business owner, the minute you attempt to invest any of those profit here, you have a money laundering issue, as of course does the lawyer, financial advisor, accountant, estate agent etc who is involved in the transaction.
Well, you may say, what about bull fighting? The position is the same. It may be legal in Spain, but it is definitely not here, so arguably if you acted for a matador who wanted to spend his earnings on a property in downtown Bath, that would create an issue for you too.
Luckily, you may not have many clients who are cannabis moguls nor matadors, but how would you know? That all comes down to how thorough your source of funds checks are. You must consider carefully and critically all that information you receive at the beginning of every matter, particularly as it will not only be foreign nationals whose earnings come from illegal sources. If you do not know where the money is coming from, then you must find out before taking any other steps on the matter.
For more information and advice on ensuring you and your business have the correct processes in place to ensure you are compliant please speak to Risk and Compliance Manager, John Grace on 01749 342 323 or email firstname.lastname@example.org.