A human rights group is calling on banks around the world to ratchet any ties with financial institutions in Zimbabwe, claiming their involvement may be further fueling the mine and trade of so-called blood diamonds.

The call follows a leaked memo from the Mineral Marketing Corp., a government parastatal of Zimbabwe, which shows the company offered to sell more than $200 million in illegal Marange diamonds to an unknown buyer through three local banks.

The mentioned Zimbabwean banks  Commercial Bank of Zimbabwe, BancABC and Premier Banking Group  have major foreign backers, including shareholders from Britains Barclays (BCS) and South Africas Standard Bank.

Barclays Zimbabwe, a subsidiary of the U.K. behemoth, is a 3.72% shareholder, a stake valued at about $3.2 million, of the Commercial Bank of Zimbabwe, according to Partnership Africa Canada, the group that obtained the leaked document. Standard Bank holds a 2.12% stake, valued at $1.8 million, the group said, citing the Commercial Bank of Zimbabwes 2010 annual report.

In addition to receiving an $89 million loan from International Finance Corp., BancABCs latest records also show 62 unnamed shareholders in North America and Europe comprising some 24% of the companys stock.

While the foreign banks arent directly involved in the Zimbabwe illegal diamond trade, their partnership with smaller financial institutions in that country, which in many cases have ties to the conflict-stricken Marange diamond fields, mean they may be participating unknowingly, according to research director Alan Martin of the Partnership Africa Canada.

These banks subscribe to a higher ethical bar than those who are trafficking these dirty diamonds, Martin said, adding that the banks are most likely guilty by association if at all.

By facilitating the transactions, knowingly or not, the foreign banks could be exposing themselves to reputational harm and putting themselves offside with international sanctions, he said.

Attempts to reach Barclays and Standard Bank for a comment were not immediately returned. However, in a statement to Voice of America, Standard Bank refuted the accusation and said the activist group misunderstands Standards relationship with the Commercial Bank of Zimbabwe.

Martin said he found Standards defensive argument unbelievable, noting a bank should want to protect its reputation and brand name by investigating and proving its innocence rather than brushing off the accusation.

The point is to make them do an investigation into why their names are appearing on the annual report of CBZ and what they are going to do about it, he said.

The human rights group suggested foreign banks audit their investments in the three Zimbabwean banks to determine if any diamond transactions that took place breached international sanctions.

Whether you purchase these stones, or help facilitate banking transactions, your actions are contributing to the continuation of the worst case of diamond related violence since Charles Taylor and Jonas Savimbi, Martin said.

The sale by Mineral Marketing is in direct contradiction to restrictions put in place by international industry watchdog Kimberley Process in November 2009 following an incident in which the Zimbabwean military gunned down over 200 diamond panners.

The document, dated March of this year, tells buyers that while a local Kimberley Process Certificate will be issued, an internationally recognized&certificate will have to be arranged by the buyer.

They are offering these diamonds to potential buyers with the big caveat that the buyer has to secure an international recognized certificate, Martin said, noting this kind of practice is very abnormal and essentially cancels the legality.

Blood diamonds, named so due to the significant toll on life their production has caused, are mined and sold to finance war or violence, often in Africa. They were responsible for a large majority of the funding that backed the decade-long Sierra Leone Civil War that started in 1992 and forcefully transformed children into soldiers.

In a report released Tuesday, Human Rights Watch accused Zimbabwe police and private security guards of being employed by mining companies in the Marange diamonds fields. The officials were allegedly shooting, beating and unleashing attack dogs on local unlicensed miners, the group said, citing evidence it gathered.

The diamonds from the Marange fields are tainted with abuse, said senior Africa researcher Tiseke Kasambala of activist group Human Rights Watch, citing miners that had been attacked as well as local clinics that have treated the wounded.

The latest violence follows claims in June by the government and the head of Kimberley Process that conditions in the fields were sufficient for Zimbabwe to resume exports of diamonds.

Despite restrictions, however, blood diamond exports out of the country are reportedly still being processed in the billions through illegal smuggling and violence, the groups said.

The illegality of these trades is not in doubt, Kasambala said.

Follow Jennifer Booton on Twitter at @Jbooton