Business 'pushed into the front line'

BUSINESS has more to fear from regulators than from terrorists in the post-11 September world, a City conference will be warned today. The warning comes from Bill Waite, a barrister and former Serious Fraud Office prosecutor, who now heads The Risk Advisory Group, a corporate 'detective agency'.

Business, Waite says, is being booted into the front line by regulators and terrorists. 'Governments, the police and the intelligence services are transferring their responsibilities on terrorism to the corporate world,' says Waite. He adds: 'Terrorists see business as the glue that holds together politics and the economy, so they attack symbolic business targets to unravel the political status quo.' Business has got to learn to hold its ground 'when it counts', by managing its exposure to risk from terrorists and regulators.

'Most corporations have little idea of their new responsibilities - more worrying, they appear unaware of the sanctions they face if they do not meet these responsibilities.'

The threat to British businesses from terrorists is much the same now as it was before 11 September, says Waite, but since then politicians in Britain and the US have become more dangerous by rushing through 'inappropriate' laws to get business to do their work for them. Penalties nowadays, he will tell a City conference, include the freezing of a company's assets as well as unlimited fines and prison sentences of up to 14 years for directors.

The main risk is in becoming involved in money laundering for terrorists, and in failure to disclose to the police suspicions of ' terrorist activity'.

However, legislation is so loosely drawn that ' terrorist' can mean anybody using or even threatening violence - it could mean Huntingdon Life Sciences or anti-abortion clinic activists, for example. Yet many companies do not know the regulatory risks they now run, says Waite.

He says: 'Our due diligence investigations for an investment bank found that an acquisition target of the bank's was run by people once connected to arms dealers - and even though this fact was publicly known, new legislation means the bank's failure to disclose it could have led to fines or even prison for the directors'.

TRAG, a terrorist and criminal risk assessment adviser with offices in London and Moscow, is staging the conference, Terrorist Risks, Business Threats. The conference is to be chaired by Professor Paul Wilkinson, director of the University of St Andrews Centre for the Study of Terrorism and Political Violence.