Tech firms swoop on Aust as money laundering legislation looms

Factiva deputy chief executive officer Claude Green, visiting Australia this week as part of a general operational review, is scheduled to meet with one large local bank to promote the company's Public Figures & Associates Database. The database lists almost 500,000 "politically exposed persons" who require special attention from banks before opening an account to minimise the risk of money laundering.

Global banking overseer the Basel Committee defines politically exposed persons as including politicians, judges and prominent businessmen. Such individuals represent an enhanced money laundering risk because, as Basel bluntly puts it, "there is always a possibility, especially in countries where corruption is widespread, that such persons abuse their public powers for their own illicit enrichment". Factiva builds the list with a team of dedicated researchers who mine its news archives and sanction lists and data produced by financial regulators such as Australia's AUSTRAC and the Department of Foreign Affairs and Trade.

There are around 7000 prominent Australians listed in the database, Green estimated, though he added that the majority would not be turned down by most banks merely because of their presence on the list. "The Prime Minister of Australia has to bank somewhere," he said. "And there is no value judgement applied in the list; it's just the facts."

Competition to provide such information to banks is likely to increase in coming months. A Gartner analysis in 2004 suggested that the US market for anti-money-laundering solutions has flattened, making fresh markets such as Australia even more desirable.

"The banks are now waiting for the shoe to drop with the legislation here," Green said. While funding for terrorism remained a concern, banks were now looking more widely to reduce the risks associated with money laundering practices, he added.

To reduce privacy concerns, Factiva only sells its list to banks, regulatory authorities and government agencies -- though plenty of other people have tried to purchase it. "We have been approached by detective agencies around the world," Green said.

The federal government committed in June 2003 to revising its anti-money laundering framework to meet new regulations proposed by the Financial Action Taskforce on Money Laundering, and has been working to develop legislation in consultation with industry.