Stories about the ‘Panama Papers’ data breach, involving the Panamanian law firm Mossack Fonseca, hit the world’s media this week. 2.6 terabytes of data was sent to a German newspaper by an anonymous source, seemingly linking many of the world`s elite to illegal money laundering and tax evasion activities. To put the size of this breach in perspective, 2.6 terabytes is 1566x larger than the WikiLeaks data breach in 2010, and has already been dubbed by many in the data security space as the largest single data breach ever.
The ramifications of this data breach are currently unknown. However, considering the nature of the information released, we can expect a worldwide investigation into the allegations made against the parties named in the breach. These accused parties include:
- World leaders (both past and present);
- People tied to a member of the FIFA ethics committee; and
- Individuals and companies on the international sanctions list.
Some specific examples include a North Korean fronting company purported to help fund the nation’s nuclear weapons programme, and a trail of $2bn that allegedly leads back to Vladimir Putin – where it emerged that a scheme funnelled money from Russian state banks into hidden offshore companies; some of which ended up being invested in a ski resort where Putin’s daughter, Katerina, got married in 2013.
We can be confident that insurance would not respond in covering any losses, damages or costs arising out of the operation of any illegal activities. However, the coming weeks and months will emphasise the wide ranging impacts and ramifications that a data and security breach can have on a reputation and business operations.
Take a look at Luke Harding`s article on the Guardian’s website here for some helpful explanations of how money is hidden using these offshore companies.