Bank secrecy is coming in for multiple challenges: the risk opacity behind the credit crunch, tax avoidance schemes, and now aiding corruption.

In a new report, "Undue Diligence: How banks do business with corrupt regimes", Global Witness attacks the way banks that have helped hide the money of dictators and other unsavory siphoners of developing country resources.

"By doing so they have facilitated corruption and looting of natural resource revenues, denying
some of the world’s poorest people a chance to escape poverty.

‘The same lax regulation that created the credit crunch has let some of the world's biggest
banks facilitate the looting of natural resource wealth from poor countries,’ said Gavin
Hayman, Global Witness Campaigns Director. ‘If resources like oil, gas and minerals are to
truly help lift Africa and other poor regions out of poverty, then governments must take
responsibility to stop banks doing business with corrupt dictators and their families.’"

The non governmental organization goes on to recommend to the G20 four financial sector reforms to clamp down on banks taking on such people as clients:

"• Banks must change their culture of ‘due diligence’ – the process by which they check that a customer is legitimate. This isn’t about box ticking. Banks should only take the business if they have identified an ultimate beneficiary who does not pose a corruption risk. Other business should be turned away.
• Governments must ensure that anti-money laundering laws in each jurisdiction are absolutely explicit that banks must do this due diligence properly, and financial regulators must actively enforce these laws.
• Cooperation between governments has to improve to ensure that national bank regulations become globally compatible, accountable and transparent, and are not hindered by bank secrecy laws. This must begin with reforms to the intergovernmental body that oversees the anti-money laundering regime, the Financial Action Task Force.
• Governments must ensure that new global rules are put in place to help banks avoid corrupt funds. The most important change is to ensure that every country produces full public online registers of the ultimate beneficial ownership of all companies and trusts under its jurisdiction, to help banks identify and avoid business with a corruption risk."

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