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Digital personal data protection Act, 2023 for combating money laundering

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Digital personal data protection Act, 2023 for combating money laundering

The compliance community is looking at governing agencies such as DPAI, MeitY, and NCRB as the Digital Personal Data Protection Act (DPDP Act 2023) is in the works after passing in both houses. Under the Digital Personal Data Protection Act, the National Crime Records Bureau (NCRB) has no direct governance responsibilities. The Data Protection Authority of India (DPAI) is responsible for enforcing the Digital Personal Data Protection Act, of 2023, to safeguard individual privacy in India. Headed by a government-appointed leader, the DPAI investigates breaches, punishes violators, directs compliance, and raises awareness. Its role is crucial in safeguarding Indian privacy and ensuring DPDP Act adherence. The DPAI awaits the Central Government’s rules and regulations notification for full operation.

The National Crime Records Bureau (NCRB) is India’s nodal agency for combating terrorist funding (CFT). It is part of the Ministry of Home Affairs and is based in New Delhi.

The NCRB’s involvement in combating the financing of terrorism (CFT) comprises the following:
– Collecting and analysing terrorist financing data
– Tracking down and investigating terrorist financing networks
– Information sharing with law enforcement authorities
– Increasing public knowledge of terrorist financing
– Create and implement CFT training programmes.
– Providing law enforcement authorities with technological help

The NCRB has made tremendous progress in combating terrorist financing. In 2020, it detained over a hundred people and recovered large amounts of money tied to terrorism funding. The agency is firm in its commitment to countering these channels and improving security in India.

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The establishment of a nationwide terrorist funding database in 2020 was a significant milestone. This repository stores information on cases, suspects, and procedures, providing law enforcement with critical insights into the complicated world of terrorism funding.

The NCRB will help support the execution of the DPDP Act by:
– Providing technical assistance to law enforcement authorities in investigating incidents of data breaches and exploitation of personal data, particularly by anti-social elements, national enemies, and terrorist factions
– Raising public and private sector awareness of the DPDP
– Creating and executing DPDP programmes for law enforcement officers and other stakeholders

Elements of The Digital Personal Data Protection Act, of 2023, will help support the combating of money laundering and terrorist financing by requiring organisations to implement stringent security measures, helping the NCRB’s efforts in reporting suspicious transactions, and investigating and penalising law-breaking organisations. The Act requires organisations to keep records of personal data gathered or processed, to provide law enforcement with permitted access. To participate in money laundering and terrorism financing investigations, these guidelines allow law enforcement to trace down illegal funds and prevent these crimes from occurring. The DPDP Act has its limitations for a direct link to the mainstream combating of money laundering and terrorist funding, but it will certainly help defend the integrity of the employee data and the subsequent data in the financial system, discouraging these crimes from severely hurting society.

The NCRB can create and implement DPDP programmes for law enforcement and other counter-terrorism stakeholders. These recommendations would aid in ensuring that these personnel are aware of their legal duties and are capable of investigating and prosecuting incidents of data breaches and abuse of personal data. The NCRB can create awareness of the DPDP Act among residents and companies to ensure that individuals understand their legal rights and that businesses understand their responsibilities. Wherein, The NCRB’s job requires international cooperation. It undermines illegal financial networks by collaborating with international states, averting possible tragedies.

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Also Read: Money laundering and terrorism financing

The NCRB can assist law enforcement agencies in investigating cases of data breaches and misuse of personal and corporate data for identity theft and impersonation, ultimate beneficial ownership, ransomware attacks, and other purposes related to money laundering, financial fraud, and terrorism financing. Access to data and analytical tools, as well as training on how to utilise them, might be part of this technical help.

The Data Protection Authority of India (DPAI) and the National Crime Records Bureau (NCRB) have the potential to collaborate on several initiatives. These include sharing information on DPDP Act violations, conducting joint investigations, conducting mutual staff training, and raising public awareness through public campaigns, educational materials, and specialised training. By collaborating, the DPAI and NCRB can enhance their impact on safeguarding individual privacy, combating financial crimes, and ensuring national security. This collaboration will help uncover intricate webs of illicit activities and ensure the protection of individual privacy, financial crimes, and national security.

The NCRB’s support for the DPDP Act’s adoption would be a significant step towards preserving individuals’ privacy and ensuring that businesses follow the law. Working closely with the NCRBs in India involved in AML/CFT, including the Financial Intelligence Unit (FIU), the Reserve Bank of India (RBI), and the Securities and Exchange Board of India (SEBI). The FIU is in charge of gathering, analysing, and distributing information on suspected financial activities. The RBI is in charge of regulating the banking industry and ensuring that banks follow CFT standards. SEBI is in charge of overseeing the securities market and ensuring that securities firms follow CFT legislation.

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Combating money laundering and terrorist funding is a difficult and time-consuming undertaking. However, by comprehending the scope of acts such as the DPDA Act and its ungoverned possibilities for collaboration, Indian government agencies are making success in disrupting terrorist finance networks and averting terrorist attacks.

Note: This is a speculative piece of knowledge and hasn’t been endorsed by any government agency.

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Vipul Tamhane
Vipul Tamhane
Vipul Tamhane is an Anti-Money Laundering and Combating Terrorist Financing (AML/CFT) specialist with expertise in international business, and Commercial Law. He is a visiting faculty at Pune University's Department of Defence and Strategic Studies, where he teaches Counter Terrorism to Masters and Postgraduate Diploma students. He is the Founder and Editor-in-Chief of Diplomacy Direct, an upcoming national-interest think tank dealing with counter-terrorism, national security, geopolitics, and international diplomacy.


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