The Russian Mafia, Colombian drug dealers, third-world dictators and other wealthy scoundrels all pose threats to Bermuda's sterling international reputation.

All four groups want to hide their ill-gotten gains from government, law enforcement officials and other financial regulatory authorities.

They do so by investing them in legitimate businesses, or by depositing them in financial institutions in offshore financial centres, preferably a highly regarded one such as Bermuda.

This activity is popularly known as `money laundering'.

The purpose of money laundering is to conceal the true ownership and origin of criminal proceeds; to maintain control over such proceeds; and, to change the form of these proceeds so that they cannot be easily traced back to their criminal origin.

Aside from money laundering concerns, organisations in Bermuda might also have concerns about individual clients, or the people whom they represent (e.g., the proposed shareholders of a company to be incorporated in Bermuda).

Anyone convicted on criminal charges, or even those alleged in the Press to have been engaged in criminal or fraudulent activity, may be unacceptable to local regulatory watchdogs, the Bermuda Monetary Authority, whose tasks include safeguarding Bermuda's international reputation.

Private businesses can protect against doing business with clients or customers who are less than reputable by putting into place a reliable due diligence procedure.

Due diligence simply means taking a cold, hard look at any new client; investigating the background of the individual and/or company; and refusing their business if they prove to be less than reputable.

In the Research & Enquiries Section of Appleby Spurling & Kempe's Knowledge Management Department, we take the responsibility of vetting potential clients very seriously.

In the pre-Internet past, the sources available for this purpose included a selection of print services and electronic (`online') databases.

The print sources consist of relevant annual or periodical company and business directories and journals. Examples of these are Best's Captive Directory, Evandale's London Insurance Market Directory, and the Waterlow Stock Exchange Yearbook.

The online sources we use centre on the LEXIS-NEXIS group of online databases.

While the LEXIS databases cover legal materials, the NEXIS service offers the world's most comprehensive, full-text online library of business, company, financial and news information.

While some firms prefer other `umbrella' databases like DIALOG, all have one major disadvantage -- they are very expensive.

Happily, the Internet offers much of that information free of charge, and so we have incorporated into our due diligence process a wide variety of web resources.

Our sources vary according to the type of company (public/private), its geographic location, industry, and other considerations.

One site, www.corporateinformation.com, provides links to Internet reports on 300,000 companies worldwide.

One of those links, www.hoovers.com, is published by Hoover's Online, a respected source of reports for 50,000 public and private companies.

A second link, www.profiles.wisi.com, is the web site for the Wright Research Centre containing company analyses for 18,000 companies globally.

There are also industry specific sites, such as the one operated by A.M. Best Company, while the Euromoney Capital Markets Directory web site offers information on financial service firms.

Country specific sites such as those set up by the Securities Exchange Commission in the US, or Industry Canada, are helpful, as is www.mbendi.co.za, which is an `Afropaedia' of business and commercial information for the continent of Africa.

General directories are searched when needed, e.g. www.askalex.co.uk which covers 1.8 million UK companies or www.companiesonline.com, which covers 900,000 public and private US companies.

News sources are also covered including the sites for the Dow Jones/Wall Street Journal, Financial Times and Fortune magazine. The Cable News Network (CNN) and BBC World Service sites are also useful.

A scan of the metasearch engines like www.google.com will often point the way to a firm's web site or information on the company contained in more obscure publications and directories on the Internet.

Of course, the ultimate in investigative research would be access to the databases compiled by agencies like Interpol, the Federal Bureau of Investigation or the Central Intelligence Agency.

Short of hacking your way into their systems, this information is off limits to the average Internet user. However, there is some comparable information on the web.

One example is a list of Specially Designated Nationals and Blocked Persons posted on the US Department of the Treasury web site at www.treas.gov/ofac.

Check out this listing if you do not have the time or the expertise to conduct more extensive searches.

There are new sources for business research being launched every day. I hope this introduction to just a few of the many Internet sites available for corporate research inspires you to start a due diligence programme of your own.

Oksana Kucil is a Research Executive in the Knowledge Management Department of Appleby Spurling & Kempe. Copies of Ms Kucil's columns are available on the Appleby Spurling & Kempe web site at www.ask.bm.

This column should not be used as a substitute for professional legal advice.

Before proceeding with any such matters, persons are advised to consult with a lawyer.