You can read the new guidelines for yourself here (pdf). Called the "Know Your Customer" initiative, the guidelines sound positive on their face but contain a loophole that corrupt bureaucrats could drive a dope-laden truck through, declaring:
The guidelines do not constitute a checklist. Nor do they create any specific legal obligation. Rather, Ex-Im Bank’s partners are encouraged to consider these best practices in conducting due diligence.In other words, these are completely voluntary, and nothing happens to loan officers who don't comply with them. E.g., they suggest that loanmakers check whether "any transaction participant or principal appear on a U.S. Government prohibited parties list (for example, Office of Foreign Assets Control or Excluded Parties List System)?" But since this due diligence document is only a suggestion, not a requirement, nothing happens to loan officers who fail to take that important step.
In addition, the due diligence non-checklist itself doesn't go far enough: Suppliers and key financiers for loan applicants should also be checked in those databases before making loans to be sure that Ex-Im Bank money isn't falling into the hands of organized crime. It's pretty easy to form a company whose top officers come up clean, but who do business with much shadier characters if the "due diligence" delved just a little deeper.
I'm glad officials at the Ex-Im Bank have recognized they need to address this problem, but they're going to have to do more to actually fix what ails the agency.
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