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ED Arrests Uttarakhand Resident for International Drug Trafficking

Context:

The Enforcement Directorate (ED) has arrested a resident of Uttarakhand for allegedly operating an international drug trafficking group. He has been booked under the Prevention of Money Laundering Act. The accused is said to have managed a global dark web enterprise that distributed fentanyl and other dangerous drugs to communities across America, including all 50 states, as well as Canada, Europe, and the Caribbean.

Relevance:

GS III: Science and Technology

Dimensions of the Article:

  1. Dark Web
  2. Data Governance Provisions in India

Dark Web:

  • The dark web comprises unindexed sites accessible only through specialized web browsers, forming a smaller but concealed part of the internet.
  • It requires special software, configurations, or authorization for access, making it intentionally hidden and challenging for average users to reach.
Personally Identifiable Information (PII) and Data Breach:
  • PII includes information that can identify an individual, ranging from direct identifiers like passport details to quasi-identifiers.
  • Threat actors on the dark web claimed to possess PII of 815 million Indians, including Aadhaar and passport details, sourced from the Indian Council of Medical Research (ICMR).
Data Source and Authentication Challenges:
  • The threat actors did not disclose how they obtained the data, posing challenges in identifying the data leak’s source.
  • Claims of a 1.8 terabyte data leak from an unnamed “India internal law enforcement agency” by a threat actor named Lucius are yet to be authenticated.
India’s Cybersecurity Landscape:
  • India, a rapidly growing economy, ranked 4th globally in malware detection in H1 2023, exposing the vulnerability of its digital infrastructure.
  • Unrest in West Asia contributed to an increase in cyber attacks, elevating the risk of digital identity theft as threat actors exploit stolen identity information for various cyber-enabled financial crimes.

Prevention of Money Laundering Act (PMLA), 2002

  • According to the Prevention of Money Laundering Act (PMLA) 2002, Money laundering is concealing or disguising the identity of illegally obtained proceeds so that they appear to have originated from legitimate sources.
    •  It is frequently a component of other, much more serious, crimes such as drug trafficking, robbery or extortion.
  • Money laundering is punishable with rigorous imprisonment for a minimum of 3 years and a maximum of 7 years and Fine under the PMLA.
  • The Enforcement Directorate (ED) is responsible for investigating offences under the PMLA.
  • The Financial Intelligence Unit – India (FIU-IND) is the national agency that receives, processes, analyses and disseminates information related to suspect financial transactions.
  • After hearing the application, a special court (designated under the Prevention of Money Laundering Act PMLA, 2002) may declare an individual as a fugitive economic offender and also confiscate properties which are proceeds of crime, Benami properties and any other property, in India or abroad.
  • The authorities under the PMLA, 2002 will exercise powers given to them under the Fugitive Economic Offenders Act.
    • These powers will be similar to those of a civil court, including the search of persons in possession of records or proceeds of crime, the search of premises on the belief that a person is an FEO and seizure of documents.

Recent Changes Made Under the PMLA

The Indian government has made several changes to the Prevention of Money-Laundering Act (PMLA) to plug loopholes and comply with Financial Action Task Force (FATF) regulations. Some of the key changes are:

  • More disclosures for non-governmental organizations by reporting entities like financial institutions, banking companies, or intermediaries.
  • Definition of “politically exposed persons” (PEPs) as individuals who have been entrusted with prominent public functions by a foreign country, which brings uniformity with a 2008 Reserve Bank of India (RBI) circular for Know Your Customer (KYC) norms and anti-money laundering standards for banks and financial institutions.
  • Inclusion of practicing chartered accountants, company secretaries, and cost and works accountants carrying out financial transactions on behalf of their clients under the ambit of the money laundering law.
  • Widening the list of non-banking reporting entities to allow 22 financial entities like Amazon Pay (India) Pvt. Ltd, Aditya Birla Housing Finance Ltd, and IIFL Finance Ltd. to verify the identity of their customers via Aadhaar under the ambit of the money laundering law.

The financial transactions covered under the money laundering law include buying and selling of any immovable property, managing client money, securities, or other assets, management of bank, savings, or securities accounts, organization of contributions for the creation, operation, or management of companies, creation, operation, or management of companies, limited liability partnerships, or trusts, and buying and selling of business entities.

-Source: Indian Express


June 2024
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