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Paradise lost?


Article Type: Comment          Published: 11-2017         Views: 741      

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The breach of the Appleby law firm, now dubbed the 'Paradise Papers', has seen a raft of salacious information pour out into the public domain, with the private documents of the rich and famous laid bare for all to see.

While there is no direct evidence of wrongdoing as such, the lengths to which many have gone to avoid paying tax might well stick in the throat of the ordinary citizen whose contributions are seized by HMRC at the ‘point of delivery’ - ie, when they are paid!

Four-times Formula 1 world champion Lewis Hamilton, for example, appears to have managed to avoid paying tax on his £16.5m luxury jet. According to the BBC's Panorama programme, Hamilton was given a £3.3m VAT refund after he imported a Bombardier Challenger 605 into the Isle of Man. The papers also revealed that millions of pounds from the Queen's private estate have been invested in a Cayman Islands fund as part of an offshore portfolio never before disclosed. The list goes on.

While there might not be any deliberate attempt at tax evasion, the revelations are certainly an embarrassment for all those caught in the headlights (Apple included), similar to the impact that the Panama Papers had last year when they hit the headlines. Ultimately, it might even serve to shake up the avoidance system, closing off some of the more blatant loopholes where they occur.

Whatever the right or the wrong of it, what’s clear is that security was deeply flawed when it came to protecting those documents. As Mark Sangster, VP and industry security strategist at cyber security company eSentire says: "Beyond the shock factor of the leaked data itself, what's more alarming is the depth and magnitude of this breach. Law and accounting firms should raise the alarm when it comes to their firm's cybersecurity rigour.

"Panama Papers may have been opportunistic. However, it laid a blueprint for these kinds of attacks. It has shone a spotlight on tax operations in the Caribbean and, while the mechanics of the breach itself have yet to be revealed, this was clearly a targeted attack. Appleby took appropriate response steps in notifying their clients, but you can't insure this. This class of events demonstrates why law firms must protect their clients' confidential information. No amount of cyber insurance, data back strategies, nor business continuity planning can ever put this genie back in the bottle."

Law and accounting firms are particularly susceptible to ethical hacking, he adds, and every firm should assume they'll be breached, because they will be breached. "These firms house a treasure trove of sensitive data that, when compromised, can result in sometimes irrecoverable damage. This attack will have far-reaching impacts for those affected."

Such warnings, like the breaches that provoke them, will continue to be prevalent in the days and months ahead, because determined hackers will always find a way to breach defences - while defences will mostly be less than they should. It is a fact of life in our industry and all the warnings in the world are never going to alter that. Meanwhile, I await with interest to see who else (besides Bono of U2, of course!) suffers unwanted exposure in the wake of the 'Paradise Papers'.

Brian Wall
Editor

Computing Security
brian.wall@btc.co.uk

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