KOROR (Island Times/Pacnews) — Palau’s financial management system was crippled last week following a cyberattack, forcing the Ministry of Finance to temporarily revert to manual payroll processing.
This marked the first major cyberattack and the first ransomware attack on the Palauan government, according to President Surangel Whipps Jr.
Ransomware attacks typically encrypt or lock a victim’s data, essentially holding it hostage until a ransom is paid for its release.
Whipps believes the attack originated in Malaysia from a company with possible links to Russia or China.
The Ministry of Finance’s National Treasury notified all government employees that standard deductions for Social Security tax, national health insurance, pension and income tax would be withheld from their salaries. However, employees would be responsible for making other voluntary payments such as bank loans, utility bills, and the like.
As of Wednesday, March 26, the financial system was still down as the government worked to restore it.
“Cybersecurity is one of the biggest threats we face,” President Whipps said at a press conference on Wednesday, calling it “a different type of warfare.”
He emphasized the need for a comprehensive cybersecurity plan to protect Palau.
Cybersecurity threats extend beyond government financial systems and can target critical infrastructure such as public utilities, healthcare systems, and private businesses.
Whipps stressed the importance of vigilance against this new threat and called for assistance from the United States and Taiwan.
