IF YOU want to hand over a few millions for a criminal purpose, you must conceal what you are doing. Time was when an anonymous bank account was ideal. Except that these are all but extinct. The new way is to get someone to set up or buy a firm or trust (or better still a web of them) on your behalf.

A new report by the World Bank called “The Puppet Masters” has investigated some 150 cases of what it calls “grand corruption”, with a total of $50 billion in illicit assets. Nearly all involved use of companies in which the real ownership was concealed, and of bank accounts, often in respectable countries (see chart). The United States is “by far the worst performer” of the countries reviewed. As a test, one of the authors set up a firm in Nevada with a nominee director based in Panama, complete with an American bank account. All he needed was an unnotarised copy of a driving licence (which showed an out-of-date address) and $3,695.

The report recommends tightening the definition of “beneficial ownership” to focus on the control exercised over a company and the benefit derived; the end point should always be a human being, not another legal entity. Banks and companies providing registration services should widen their due diligence to include this. Nominee directors should disclose whom they report to. Complex structures with more than three layers of ownership should arouse especial scrutiny and have to explain themselves. Other recommendations are that company registries should be searchable online and operators should make an effort to verify the information supplied.

Such ideas might seem uncontroversial, but they are not. Implementing them would overturn decades of financial and legal precedent, in which anonymity, deliberately created across multiple jurisdictions, has been used and abused by those whose activities can flourish only in the shadow.

In what for the World Bank is unusually strong language, the report lambasts national authorities for failing to take the issue seriously. Compliance with the international standards that countries have signed up for is “poor”, it states; the gap between the rules on paper and what happens in practice is “substantial”. The role of banks and companies that handle corporate registration comes in for stinging criticism: “In the majority of cases in which a corporate vehicle is misused, the intermediary is negligent, wilfully blind or actively complicit.”