Ethical Performance
inside intelligence for responsible business


Financiers slated over dictator accounts

April 2009

Banks are facilitating corruption internationally by doing business with dictators and should work harder to reject relationships with individuals posing a corruption risk, says a report from the UK-based anti-corruption group Global Witness.

Undue diligence: how banks do business with corrupt regimes highlights instances of what it regards as unacceptable business relationships with customers. Among others, Barclays is accused of keeping an account for the son of the dictator of Equatorial Guinea, despite evidence of misappropriation of oil revenues in the country. The report says many other banks, notably Banco Santander and HSBC, ‘hide behind bank secrecy laws’ to frustrate inquiries about their dealings with such figures.

Global Witness argues that banks should eschew the financial rewards associated with such business and simply ‘stop doing business with corrupt dictators and their families’.

It also calls for regulation of banks requiring them to carry out proper customer due diligence. This would mean that if banks cannot identify the ultimate beneficial owner of funds in an account, ‘then they should not accept the customer as a client’.

In general, it says, ‘banks must change their culture of know-your-customer due diligence and not treat it solely as a box-ticking exercise of finding the minimum information necessary to comply with the law’.

Gavin Hayman, Global Witness campaigns director, said: ‘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.’

Global Witness | UK & NI Ireland | Corruption

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