EUROPOL: Tax fraud loses EU carbon trading billions Euros

Tax fraudsters have targeted the EU's carbon emissions trading system, pocketing around 5 billion euros (7.4 billion dollars), the Europol police agency said Wednesday.

"The European Union Emission Trading System has been the victim of fraudulent traders in the past 18 months," said the agency in a statement.

"This resulted in losses of approximately five billion euros for several national tax revenues."

The agency, based in The Hague, added that it estimated "in some countries, up to 90 percent of the whole market volume was caused by fraudulent activities."

France, the Netherlands, the UK and Spain had all changed their tax rules on the transactions to prevent further losses, the agency said.

"After these measures were taken, the market volume in the aforementioned countries dropped by up to 90 percent," according to the statement.

According to a Europol official, the alleged fraudulent traders set themselves up in one country and bought carbon polluting allowances from a second country, making the allowances exempt from value-added tax (VAT). They were then allegedly sold on to firms in the country where the trader was based, but with the VAT added on, the official said.

The traders are accused of pocketing the VAT instead of handing it to tax authorities, the official said.

The Emission Trading System was launched in the EU in 2005 in a bid to reduce greenhouse gas emissions, which many scientists link to global warming.

Under the system, the EU allocates carbon polluting allowances to member states to meet its obligations under the UN's Kyoto Protocol.

The states then assign quotas to those industries that belch most CO2 into the atmosphere.

Companies that emit less than their allowance can sell the difference on the market to companies that exceed their limits, thus providing a financial carrot to everyone to become greener.

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Malware Loses its Impact Power and Surprise Factor After 24 Hours in the Cloud

Security vendors—particularly those with Web filtering and antivirus products, boast about the exponential growth in malware. Symantec, McAfee and others say the number of malware samples detected over the last two years is approaching 3 million. Strange, that's more than all the samples of unique and variant viruses and worms detected in the last two decades.

Volume doesn't necessarily equal damage. 52% of malware lose it's power within 24 hours of being released into the wild (Cloud).

It's a surprising statistic that reflects the changing nature of malware. Many malware writers are using a malicious cloud computing model to capture valuable data. They're spreading worms and Trojans that either direct users to compromised or bogus Websites, or use a specific domain to send command and control instructions to their compromised clients.

McAfee recently reported, the volume of malware that's designed to monitor specific domains such as banks and gaming sites to stealthily steal access credentials increased more than 400 percent in 2008.

We already know that malware creators will not stick around, waiting to get caught. They're quickly moving or deactivating their controlling domains to avoid detection.

Also, carriers, hosting services and law enforcement are acting quickly to block or take down such malicious domains. The result is that those malware bots, dependent upon those malicious domains, are rendered inert within the first 24 hours. Therefore the impact power and surprise factor of malware, decreases over the next 72hours.

This is good news, right? Not always. It takes time for antivirus vendors and researchers to detect and create conventional signatures for new malware, somewhere in the order of 72 hours. This means most organisations are exposed to high infection rates and compromise, during the most dangerous time of malware infection.

The 24-hour window of vulnerability is an opportunity for solution providers to talk with customers about the benefits of adding synergistic security technologies that augment and complement traditional antivirus packages. Technologies such as data loss prevention, intrusion prevention, and Web and traffic monitoring and filtering can help detect and isolate malicious traffic and stop data loss.