Business

MoneyTaker hackers reportedly steal £7.5m from ATMs

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Hooded man with green code projected overtopImage copyrightReuters

Russian-speaking hackers are suspected of stealing nearly $10m (£7.5m) from 20 companies in Russia, the UK and US.

The MoneyTaker group removed overdraft limits on debit cards and took money from cash machines, according to a report by cybersecurity firm Group-IB.

It also stole documentation for technology used by more than 200 banks in the US and Latin America.

The documents could be used in future attacks by the hackers, according to the report.

Group-IB has worked with both Europol and the Russian government to investigate cybercrime.

Kevin Curran, an independent expert and professor of cybersecurity at Ulster University, said the attacks were “as sophisticated as it gets at this moment in time”.

“It really is perfect in some ways,” he told the BBC. “They’re able to compromise systems and then extract all the documents for how a banking system works so that they have the intelligence needed to produce fraudulent payments.”

MoneyTaker – named by Group-IB after the group’s custom malware – has reportedly netted an average of $500,000 in 16 attacks against US companies and $1.2m in three attacks against Russian banks since May 2016.

It also targeted a UK-based software and service provider in December 2016, according to the report.

The Financial Conduct Authority and UK Finance declined to comment when contacted by the BBC.

‘Eliminating their traces’

MoneyTaker avoided detection “by constantly changing their tools and tactics” and “eliminating their traces after completing their operations”, according to a statement from Group-IB.

In its earliest-known attack, the group compromised First Data’s Star network – a debit card processing system used by more than 5,000 banks.

The attackers then removed or increased cash withdrawal and overdraft limits on legally opened credit and debit cards. “Money mules” were sent to withdraw funds from cash machines.

The group used a combination of publicly available tools and custom-written malware to access banking systems – including “file-less” software that is stored in a computer’s memory rather than its hard drive, where it can be more easily detected, according to Group-IB.

In at least one instance, the group used the home computer of a Russian bank’s system administrator to access its internal network, according to the report.

“If someone is targeted by experts, that’s very hard to protect against,” Prof Curran said. “They’re going to persist until they get into the computer.”

Other tactics included changing the servers used to infect banking systems’ networks and using secure sockets layer (SSL) certificates – data files that verify a web browser’s authenticity – that appeared to be issued by big names such as the Federal Reserve Bank.

‘The next targets’

In addition to money, the hackers were also after internal banking system documentation, such as administrator guides, internal instructions and transaction logs, according to the report.

Documentation was stolen during MoneyTaker’s attacks on the Russian Interbank payment system, which operates similarly to Swift. That documentation could be used “to prepare further attacks” on banks using the technology, according to Group-IB.

OceanSystems’ FedLink card-processing system, a wire transfer product used by more than 200 banks in the US and Latin America, was also compromised.

“Banks are increasingly spending more on security, but the hackers only have to find one way in and they have to protect all the ways in,” said Prof Curran.

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Pharma sector could face ‘dire situation’

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Lisa Anson, president of the Association of the British Pharmaceutical Industry (ABPI), told Sky News that firms have put investment decisions “on ice” and face a “dire situation” unless such an agreement can be reached.

Ms Anson, also UK president of the multinational giant AstraZeneca, made the comments in a rare interview.

The industry has welcomed the progress in Brexit negotiations announced at the end of last week, but remains deeply concerned about a number of topics, particularly the ways in which medicines would be distributed around Europe after Brexit.

Ms Anson said there were clear priorities for her sector, which employs around 73,000 people in the UK .

These were access to skilled staff, a clear set of regulations to support the safety of patients and links to the NHS that means patients get the same access to medicines as they do in other countries.

Pharmaceutical giant AstraZeneca
Image:AstraZeneca is already making plans to deal with Brexit disruption

“The bottom line is the issues are understood – we’re all agreed on the issues – what we need is urgent progress into tangible action,” Ms Anson said.

“As companies,we are already driving contingencies because we have to make sure we have the ability to supply medicines.

“Every month 45 million packs of medicine go from the UK into Europe, 37 million packs come back the other way.

“And every pack is a patient needing a medicine, from babies having their vaccinations to people with chronic disease like diabetes, even patients awaiting a surgery, wanting their anesthetic.

“Every single one of those patients depends on us having the supply chain for medicines, which is complex and scaled, in place.

“And we simply can’t afford to wait so we’re having to take action now to make sure we’re in a position because we don’t have certainty about some of the outcomes.”

To that end, Ms Anson revealed that her own company had already prepared plans to deal with disruption to trade.

She said: “If we look at the frictionless trade, AstraZeneca is already looking at contingencies to duplicate the quality control release processes in the UK and in Europe, because we can’t afford to wait to know if there’s going to be customs tariffs or any other sort of barrier.

“We need to know that we can supply the medicines within Europe.”

She said the pharmaceutical sector had a particular nervousness about retaining skilled staff, with around 25% of the workforce coming from abroad:

“It’s absolutely essential in a globally competitive world that we have the scientific talent that we need to drive a world-class life sciences sector in this country.

“It is fair to say that people are already turning down jobs in the UK – we’ve seen that in our own company.”

“If you think about investment decisions right now, I think it would be fair to say, if you look at manufacturing in particular, those are on ice.

“Because we simply don’t know how we’re going to continue the supply chain of medicines or what terms we’re going to be operating under.”

A person holds pharmaceutical tablets and capsules in this picture illustration taken in Ljubljana September 18, 2013
Image:Every month 45 million packs of industry are exported to Europe

It is a picture of nervousness, of an industry worth many billions to the British economy, but unsure of what happens next.

There is no more regulated industry than pharmaceuticals, none that is so reliant on sticking to rules and requirements.

The comments came on the same day as MPs on the Health Select Committee were told that the “regulation and supply of medicines” should be “the first priority” of Brexit talks.

Few sectors need such a high level of international co-operation.

Take UCB, a Belgian pharmaceutical company with a substantial presence in Britain.

In its factory in Slough, I met Neil Weir, the company’s Head of Discovery Research, who combines traces of optimism and anxiety.

“The pharmaceutical sector operates within highly integrated regulatory systems and supply chains, so we hope that a ‘hard Brexit’ can be avoided and on-going close regulatory co-operation between the UK and the EU can be achieved to enable us to supply patients with the medicines they need without disruption,” he said.

“We hope we will get clarity on these issues.

“However, as an organisation with UK based research and development, we do believe that full implementation of the recent life sciences industrial strategy by Government can enhance UK’s position as an attractive destination for R&D [research and development].”

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Facebook to overhaul Irish tax scheme

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Facebook logoImage copyrightAFP

Facebook is to overhaul its tax structure so that it pays tax in the country where profits are earned, instead of using an Irish subsidiary.

The online advertising giant is to make the change in every country outside the US where it has an office.

In 2016, Facebook said it would stop routing UK sales through Ireland for tax purposes.

The change comes after pressure on large firms over their tax affairs from governments and the public.

Facebook chief financial officer Dave Wehner said: “We believe that moving to a local selling structure will provide more transparency to governments and policy makers around the world who have called for greater visibility over the revenue associated with locally-supported sales in their countries.”

The move will affect how Facebook pays taxes in 30 countries including Germany, France, Spain, Italy, the Netherlands, Belgium, Norway, Poland, and Sweden.

In the UK, there was public outrage after it emerged that Facebook had paid just £4,327 in tax in 2014.

In April 2016, the company began booking more advertising income through its UK office, instead of Ireland.

That significantly boosted revenue and profits for its UK business, and has meant that so far it has paid higher taxes.

Facebook paid £5.1m in tax in the UK last year, up from £4.2m in 2015, on revenues of £842m.

‘Appeasing public’

However, that does not necessarily mean it will start paying more tax in other countries as a result of the overhaul, Professor Prem Sikka of the universities of Sheffield and Essex told the BBC.

Taxes are paid on profits, and “the huge difficulty with large companies is trying to determine exactly what the profit is,” he said.

There are a number of ways firms can muddy the waters, including charging intra-group management fees, royalty fees, and profit-sharing, he said.

Professor Sikka added that the Facebook move “may well be appeasing public opinion, while at the same time it takes a very small hit on its profits, if any.”

EU authorities are pursuing big technology companies over what they see as avoidance of tax by routing business through lower tax jurisdictions.

In 2015, the UK government introduced a “diverted profits” tax, a higher rate of corporation tax aimed at companies that move profits out of the country.

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Ryanair pilots to strike ahead of Christmas

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The strike, scheduled for Wednesday 20 December, involves the Irish Airline Pilots’ Association (IALPA) and the IMPACT trade union.

It is unclear at this stage what impact it will have on people travelling home for Christmas but most of the pilots balloted for strike action are captains.

The union claims 94% of the directly-employed pilots backed strike action.

However a majority of Ryanair pilots who are either contracted or hired through intermediary arrangements in the Republic of Ireland were not balloted.

This is only part of a series of industrial disputes facing the low cost airline across Europe over negotiating and collective bargaining rights.

Italian pilots are scheduled to stop work for four hours between 1pm and 5pm this Friday.

Meanwhile, German pilots union Vereinigung Cockpit have warned industrial action may spread to Ryanair pilots in Germany and have not ruled out also taking industrial action in the Christmas period

And Portuguese-based pilots have also balloted for industrial action, but so far have not served notification of any industrial action.

Ashley Connolly, an official at Irish trade union IMPACT, said: “This dispute is solely about winning independent representation for pilots in the company.

“Management’s failed negotiating model has let down shareholders and tens of thousands of passengers, whose flights were cancelled this year because company-controlled industrial relations proved incapable of recruiting and retaining enough pilots.

“The failed policy threatens to further disappoint shareholders and passengers, and further damage the airline’s reputation, because experienced pilots continue to leave the airline in droves.

“This dispute is about securing a safe space for negotiations, with independent representation that pilots can have confidence in”.

The union has also not ruled out further strike days if agreement is not reached.

The airline said: “Ryanair will deal with any such disruptions if, or when they arise, and we apologise sincerely to customers for any upset or worry this threatened action by less than 28% of our Dublin pilots may cause them over the coming days.

“While some disruption may occur, Ryanair believes this will largely be confined to a small group of pilots who are working their notice and will shortly leave Ryanair, so they don’t care how much upset they cause colleagues or customers.”

Ryanair’s statement noted that the threatened industrial action was about union recognition rather than the pay of Dublin-based pilots, earning €150,000-€190,000 per year, who had been offered a 20% pay rise.

The airline said it was entitled to decline to engage with what it called “competitor” pilot unions.

“Ryanair will not recognise an Aer Lingus pilot union, no matter how often or how long this tiny minority try to disrupt our flights or our customer plans during Christmas week,” its statement said.

Ryanair said IALPA’s own numbers showed it had the support of less than 28% of Ryanair’s more than 300 Dublin pilots.

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Penniless migrant who built a retail empire

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It is also notable because it will bring down the curtain on one of the most remarkable – and inspiring – business careers since the war, not just in Australia, but anywhere.

For Sir Frank Lowy, the man who built Westfield, has declared that the sale will mark the moment when he retires.

The story of Sir Frank, who was knighted by the Queen at Windsor Castle last Friday, is also the story of post-war Australia.

:: Westfield shopping centres sold in £18.5bn deal

Born in 1930 in Filakovo, a town on the Slovak-Hungarian border, Sir Frank’s family moved to Hungary when he was a child.

When the Nazis invaded Hungary, in 1944, Sir Frank’s father, Hugo, immediately sought to buy rail tickets at Budapest station to get the family out.

Westfield shopping centre in Shepherd's Bush, west London
Image:Westfield shopping centre in Shepherd’s Bush, west London, opened in 2008

He was arrested there and Sir Frank, who was 14 at the time, never saw him again.

He only discovered in 1991 that his father had been taken to the death camp at Auschwitz-Birkenau, where he had been beaten to death.

Sir Frank visited Auschwitz four years ago where in a speech on Holocaust Memorial Day, he revealed his father had been murdered for refusing to give up his prayer shawl and his tefillin, boxes worn by Orthodox Jewish men during weekday morning prayers.

In his biography, Pushing the Limits, Sir Frank recalled: “Once father was taken away, my childhood ended.

“My days were spent scheming how to live, eat and survive. I don’t remember having any friends.”

Sir Frank and his mother, Ilona, spent the rest of the war in a Budapest ghetto and after the war, he made his way to what is now Israel, fighting in the conflict that led to the country’s formation as an independent state.

In 1952, as a penniless migrant and speaking little English, he arrived in Sydney, where his mother had already moved, getting a job as a delivery boy for a delicatessen owned by a fellow Hungarian called Jeno Schwarcz.

The pair went into partnership in 1953 to open a food store in Blacktown, a district of western Sydney many immigrants arriving in Australia had made their home, opening another shop in the same block inside a year as the local population grew rapidly.

After a brief dalliance with residential development, their next project was a department store with car parking spaces and the pair – Mr Schwarcz later changed his name to the Anglicised John Saunders – quickly realised that as in America, mass car ownership was about to become the norm in Australia, leading to the creation of big suburban shopping centres.

FILE PHOTO: The sign of Westfield shopping center is pictured in San Diego, California September 10, 2014.
Image:Westfield shopping centre in San Diego

He recalled: “We saw what happened in the United States, the advent of urban sprawl, the cars, the parking, the merchandise, the new stores, supermarkets, it was all happening at that time. It was fascinating.”

The company, named Westfield in 1956 in a reference to their location in western Sydney and the undeveloped land behind their original stores, opened its first mall in July 1959 in Blacktown and expanded rapidly thereafter.

The business floated on the stock market in June 1960 in order to access more capital and, by the early 1960s, was opening at least one mall a year.

Westfield’s website points out that anyone who had invested A$1,000 at the flotation, kept their shares for the subsequent 50 years and reinvested all of their dividends, would have seen the value of that shareholding balloon to A$159m by the end of 2009.

It is no exaggeration to say Westfield brought modern shopping to Australia.

In 1968 and 1969, it expanded beyond New South Wales, opening its first malls in Queensland and Victoria, before taking its first steps overseas a decade later in the US.

In just over 10 years, it had seven US malls worth US$1.1bn.

Mr Lowy bought out Mr Saunders – who died 10 years later – in 1987 and continued to grow the business in both the US and Australia, expanding into New Zealand for the first time in 1997.

In 2000, it came to Britain for the first time, buying a centre in Nottingham.

This was followed in 2008 by the Westfield centre in Shepherd’s Bush, west London.

Shoppers crowd the walkways on opening day of the Westfield Stratford City shopping centre in east London
Image:Westfield shopping centre in Stratford, east London, opened in 2012.

By then Mr Lowy and his three sons, who had joined him in running the business, had actually been selling some assets ahead of the global financial crisis.

Steven, his middle son, explained: “We didn’t foresee the credit crunch.

“But we asked how long things could go on being so good.”

In 2012, in time for the London Olympics, Westfield Stratford – the biggest shopping centre in Europe – opened.

Two years later, the company was restructured, with its assets in Australia and New Zealand housed in a separate business called Scentre.

This remains listed on the Sydney stock exchange and Mr Lowy stepped down as its chairman last year.

Yet building a retail empire and accumulating an A$8.3bn fortune, as well as giving away hundreds of millions of dollars in good causes, is not Mr Lowy’s only legacy.

He is also seen as the man who has done more than anyone to put football on the map in Australia where, until recent times, it was seen as a poor relation to rugby league, rugby union and Aussie rules.

As chairman of Football Federation Australia, a job he took at the behest of former Prime Minister John Howard, Mr Lowy oversaw an overhaul of the sport that saw it rebadged from ‘soccer’ to ‘football’ and set up the new A-League.

Clubs, which had traditionally been organised along racial or ethnic lines, were ordered to rebadge, for example, with South Melbourne dropping ‘Hellas’ from its name.

Australia chose to compete for World Cup qualification in Asia rather than Oceania and, in 2006, qualified for the tournament for the first time in 32 years.

What has marked Mr Lowy out has been a refusal to rest on his laurels.

He was irritated when the Australian Financial Review said Westfield had done well by sticking to its knitting, responding: “If I had stuck to my knitting, I would have had a wonderful career having a delicatessen in Blacktown.

“I probably would be the best delicatessen owner around.

“So you’ve got to test the envelope, find out what are your abilities and if you falter, pick yourself up and test it again. Otherwise, what is it all about, you know?”

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Multiyork cuts staff as it searches for a buyer

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Multiyork sofaImage copyrightMultiyork

Multiyork has made more than 100 staff redundant and left nearly 500 jobs hanging in the balance, as its administrator scrambles to find a buyer for the furniture maker.

The Norfolk-based firm has told 112 staff they have lost their jobs, and will be paid until Tuesday.

Multiyork collapsed in November, citing difficult trading conditions.

Its administrator Duff & Phelps said it was continuing its efforts to sell all or part of the business.

However, Allan Graham, joint administrator at Duff & Phelps, said: “During this period of managed wind down, the process of selling in-store display items and other business assets will begin. We will also continue to fulfil customer orders.”

The redundancies announced on Tuesday will affect staff at Multiyork’s headquarters and manufacturing plant. Staff were told that they can claim redundancy and holiday pay from the government.

Adam Finch, a designer who has worked at Multiyork for four years, said: “There are people who have worked here for 20 years in tears. They don’t know what they are going to do next month.”

Nearly 500 people will remain with the company for now, including staff across its 50 stores and employees at the headquarters in Thetford.

Mr Graham said: “Despite considerable effort from both the administrators and the senior management team at Multiyork, it has not been possible to agree a sale of the entire business yet.

“While we recognise that there were some offers made, they were not at a level that either produced an acceptable outcome for the company’s stakeholders or could guarantee the future stability of the business.”

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German protest over Nazi toy soldiers on Amazon

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Toy Wehrmacht soldier (screenshot from Amazon website)Image copyrightScreenshot
Image caption A toy Wehrmacht soldier is among the items aimed at young children

A German father is campaigning online to stop Lego-style toy Nazi soldiers being sold on Amazon.

Manuel Hegel’s petition says the toys “represent officers, soldiers etc of the Waffen-SS and thereby trivialise National Socialism”.

The toys are sold by a German firm, CustomBricks, and Lego says they do not comply with Lego’s own values.

A Lego statement said the Danish toy firm “does not in any way sponsor or endorse the product – on the contrary”.

The statement, sent to the BBC, did not specify any legal action in this case, but said: “In general we take the steps necessary to ensure consumers are never in doubt.”

The CustomBricks ad on Amazon warns that the toys “are not suitable for children aged seven or less” and “require adult supervision”.

CustomBricks also sells toy soldiers and vehicles styled on the Allies in World War Two.

German law bans the use of Nazi symbols, such as the swastika, Iron Cross and stylised eagle (the “Reichsadler”), outside the context of education or art.

Mr Hegel argued that the toy soldiers could encourage children to accept “one of the most inhumane regimes in history”.

He said it was “chilling to imagine that these figures could soon lie under the Christmas tree and get into children’s hands”.

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UK inflation rate at near six-year high

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MoneyImage copyrightPA

Inflation rose to 3.1% in November, the highest in nearly six years, as the squeeze on households continued.

The Office for National Statistics (ONS) said that airfares and computer games contributed to the increase.

The most recent data shows that average weekly wages are growing at just 2.2%.

Mark Carney, the governor of the Bank of England, will now have to write a letter to Chancellor Philip Hammond explaining how the Bank intends to bring inflation back to its 2% target.

Mr Carney has to write a letter to the chancellor if the Consumer Prices Index (CPI) inflation rate is above 3% or below 1%.

Close to peak?

In November, the Bank of England raised its key interest rate for the first time in more than a decade from 0.25% to 0.5%.

However, it is not expected to announce a further increase when it publishes the results of the Monetary Policy Committee’s two-day meeting on Thursday.

Mr Carney had said that he expected inflation to peak in October or November.

Lucy O’Carroll, chief economist at Aberdeen Standard Investments, said: “It’s quite possible that inflation is now close to its peak. But some of the latest surveys suggest that service sector costs and prices are rising. Given how dominant services are in the economy, this could feed through to inflation overall.

“That means that further interest rate rises are definitely not off the table.”

The ONS said that although airfares fell in November – down 10.4% – the decline was not as steep as last year when they tumbled 13.4%.

Data also shows that food inflation has picked up, especially prices for fish, butter and chocolate.

Richard Lim, chief executive at Retail Economics, said that the rise in inflation had come “at precisely the wrong time for retailers”.

“In the run-up to Christmas, the cost of living, now rising at the fastest rate in five years, remains uncomfortably high for households.”

He said that food inflation “is one of the most transparent indicators of living costs and often the catalyst to cut back on spending elsewhere”.

However, he expects the inflation rate to now fall and could reach 2.5% by Easter.

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Energy prices surge just as cold snap bites

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One person was killed and 18 injured at the blast in Baumgarten an der March, the site of one of Europe’s biggest supply hubs, on Tuesday.

More than 200 firefighters attended the blaze and one witness described seeing an “immense ball of flame” at the site 31 miles northeast of Vienna, which has now been evacuated and shut down.

The blast prompted gas prices to surge across Europe, including a 40% rise in the UK to 95p per therm – a level not seen since 2013. A spokesman for National Grid said there was sufficient gas to meet demand.

The outage followed the closure of the Forties pipeline for repairs on Monday after a crack was discovered.

The pipeline, which carries 40% of North Sea oil and gas, is expected to be closed for a couple of weeks while repairs are carried out.

Analysts at investment bank Jefferies said: “The timing of the outage could not be much worse as winter weather is just materialising.”

Oil prices also surged, with Brent crude pushing above $65 a barrel for the first time since June 2015, though it later slid back below $64.

Firefighters are seen at the largest natural gas import and distribution station after a gas explosion in Baumgarten, Austria
Image:More than 200 Firefighters tackled the blaze in Baumgarten

Scottish energy minister Paul Wheelhouse told Holyrood there were no plans to shut down the Grangemouth refinery, which uses Forties crude, and no impact was expected on fuel and gas supplies.

Producers including BP, Shell and Chrysaor said they had closed down oil fields in response.

A trading source told Reuters: “If it is a lengthy outage, then a recovery period for the fields will be long as well.”

The Paris-based International Energy Agency, which advises Western governments and coordinates the release of oil from strategic stocks in the case of supply disruptions, said it was “monitoring the situation closely”.

The Baumgarten plant in Austria receives around 40bn cubic metres of gas each year and redistributes it across Europe, including to Germany and northern Italy.

Operator Gas Connect said there could be interruptions in supply to Italy and Croatia, but not elsewhere.

Italy declared a state of emergency regarding energy supplies, while Russian gas giant Gazprom said it was working on redirecting gas flows to secure uninterrupted supplies to its clients around Europe.

Slovakia’s main gas transit route to Austria was suspended after the fire, Slovak pipeline operator Eustream said.

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