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AbstractLegal and ethical issues form an important component of modern research, related to the subject and researcher. This article seeks to briefly review the various international guidelines and regulations that exist on issues related to informed consent, confidentiality, providing incentives and various forms of research misconduct. Relevant original publications (The Declaration of Helsinki, Belmont Report, Council for International Organisations of Medical Sciences/World Health Organisation International Guidelines for Biomedical Research Involving Human Subjects, World Association of Medical Editors Recommendations on Publication Ethics Policies, International Committee of Medical Journal Editors, CoSE White Paper, International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use-Good Clinical Practice) form the literature that are relevant to the ethical and legal aspects of conducting research that researchers should abide by when conducting translational and clinical research. Researchers should note the major international guidelines and regional differences in legislation. Hence, specific ethical advice should be sought at local Ethics Review Committees.Key words: Confidentiality, ethics, informed consent, legal issues, plagiarism, professional misconductGo to:INTRODUCTIONThe ethical and legal issues relating to the conduct of clinical research involving human participants had raised the concerns of policy makers, lawyers, scientists and clinicians for many years. The Declaration of Helsinki established ethical principles applied to clinical research involving human participants. The purpose of a clinical research is to systematically collect and analyse data from which conclusions are drawn, that may be generalisable, so as to improve the clinical practice and benefit patients in future. Therefore, it is important to be familiar with Good Clinical Practice (GCP), an international quality standard that is provided by the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH),[1] or the local version, GCP of the Central Drugs Standard Control Organization (India's equivalent of US Food and Drug Administration)[2] and local regulatory policy to ensure that the research is conducted both ethically and legally. In this article, we will briefly review the legal and ethical issues pertaining to recruitment of human subjects, basic principles of informed consent and precautions to be taken during data and clinical research publications. Some of the core principles of GCP in research include defining responsibilities of sponsors, investigators, consent process monitoring and auditing procedures and protection of human subjects.[3]Go to:ISSUES RELATED TO THE RESEARCH PARTICIPANTSThe main role of human participants in research is to serve as sources of data. Researchers have a duty to ‘protect the life, health, dignity, integrity, right to self-determination, privacy and confidentiality of personal information of research subjects’.[4] The Belmont Report also provides an analytical framework for evaluating research using three ethical principles:[5]Respect for persons – the requirement to acknowledge autonomy and protect those with diminished autonomyBeneficence – first do no harm, maximise possible benefits and minimise possible harmsJustice – on individual and societal level.Mistreatment of research subjects is considered research misconduct (no ethical review approval, failure to follow approved protocol, absent or inadequate informed consent, exposure of subjects to physical or psychological harm, exposure of subjects to harm due to unacceptable research practices or failure to maintain confidentiality).[6] There is also scientific misconduct involving fraud and deception.Consent, possibility of causing harmBased on ICH definition, ‘informed consent is a process by which a subject voluntarily confirms his or her willingness to participate in a particular trial, after having been informed of all aspects of the trial that are relevant to the subject's decision to participate’. As for a standard (therapeutic) intervention that carries certain risks, informed consent – that is voluntary, given freely and adequately informed – must be sought from participants. However, due to the research-centred, rather than patient-centred primary purpose, additional relevant information must be provided in clinical trials or research studies in informed consent form. The essential components of informed consent are listed in Table 1 [Adapted from ICH Harmonised Tripartite Guideline, Guideline for Good Clinical Practice E6(R1)].[1] This information should be delivered in the language and method that individual potential subjects can understand,[4] commonly in the form of a printed Participant Information Sheet. Informed consent is documented by means of written, signed and dated informed consent form.[1] The potential subjects must be informed of the right to refuse to participate or withdraw consent to participate at any time without reprisal and without affecting the patient–physician relationship. There are also general principles regarding risk assessment, scientific requirements, research protocols and registration, function of ethics committees, use of placebo, post-trial provisions and research publication.[4]Table 1Essential components of an informed consentSpecial populationsInformed consent may be sought from a legally authorised representative if a potential research subject is incapable of giving informed consent[4] (children, intellectual impairment). The involvement of such populations must fulfil the requirement that they stand to benefit from the research outcome.[4] The ‘legally authorised representative’ may be a spouse, close relative, parent, power of attorney or legally appointed guardian. The hierarchy of priority of the representative may be different between different countries and different regions within the same country; hence, local guidelines should be consulted.Special case: Emergency researchEmergency research studies occur where potential subjects are incapacitated and unable to give informed consent (acute head trauma, cardiac arrest). The Council for International Organisations of Medical Sciences/World Health Organisation guidelines and Declaration of Helsinki make exceptions to the requirement for informed consent in these situations.[4,7] There are minor variations in laws governing the extent to which the exceptions apply.[8]Reasonable efforts should have been made to find a legal authority to consent. If there is not enough time, an ‘exception to informed consent’ may allow the subject to be enrolled with prior approval of an ethical committee.[7] Researchers must obtain deferred informed consent as soon as possible from the subject (when regains capacity), or their legally authorised representative, for continued participation.[4,7]Collecting patient information and sensitive personal information, confidentiality maintenanceThe Health Insurance Portability and Accountability Act has requirements for informed consent disclosure and standards for electronic exchange, privacy and information security. In the UK, generic legislation is found in the Data Protection Act.[9]The International Committee of Medical Journal Editors (ICMJE) recommendations suggest that authors must ensure that non-essential identifying information (names, initials, hospital record numbers) are omitted during data collection and storage wherever possible. Where identifying information is essential for scientific purposes (clinical photographs), written informed consent must be obtained and the patient must be shown the manuscript before publication. Subjects should also be informed if any potential identifiable material might be available through media access.Providing incentivesCash or other benefits ‘in-kind’ (financial, medical, educational, community benefits) should be made known to subjects when obtaining informed consent without emphasising too much on it.[7] Benefits may serve as appreciation or compensation for time and effort but should not result in the inducement to participation.[10] The amount and nature of remuneration should be compared to norms, cultural traditions and are subjected to the Ethical Committee Review.[7]Go to:ISSUES RELATED TO THE RESEARCHERLegal issues pertaining to regulatory bodiesVarious regulatory bodies have been constituted to uphold the safety of subjects involved in research. It is imperative to obtain approval from the appropriate regulatory authorities before proceeding to any research. The constitution and the types of these bodies vary nation-wise. The researchers are expected to be aware of these authorities and the list of various bodies pertinent to India are listed in the article “Research methodology II” of this issue.Avoiding bias, inappropriate research methodology, incorrect reporting and inappropriate use of informationGood, well-designed studies advance medical science development. Poorly conducted studies violate the principle of justice, as there are time and resources wastage for research sponsors, researchers and subjects, and undermine the societal trust on scientific enquiry.[11] The Guidelines for GCP is an international ethical and scientific quality standard for designing, conducting, recording and reporting trials.[1]Fraud in research and publicationDe novo data invention (fabrication) and manipulation of data (falsification)[6] constitute serious scientific misconduct. The true prevalence of scientific fraud is difficult to measure (2%–14%).[12]Plagiarism and its checkingPlagiarism is the use of others' published and unpublished ideas or intellectual property without attribution or permission and presenting them as new and original rather than derived from an existing source.[13] Tools such as similarity check[14] are available to aid researchers detect similarities between manuscripts, and such checks should be done before submission.[15]Overlapping publicationsDuplicate publications violate international copyright laws and waste valuable resources.[16,17] Such publications can distort evidence-based medicine by double-counting of data when inadvertently included in meta-analyses.[16] This practice could artificially enlarge one's scientific work, distorting apparent productivity and may give an undue advantage when competing for research funding or career advancement.[17] Examples of these practices include:Duplicate publication, redundant publicationPublication of a paper that overlaps substantially with one already published, without reference to the previous publication.[11]Salami publicationSlicing of data from a single research process into different pieces creating individual manuscripts from each piece to artificially increase the publication volume.[16]Such misconduct may lead to retraction of articles. Transparent disclosure is important when submitting papers to journals to declare if the manuscript or related material has been published or submitted elsewhere, so that the editor can decide how to handle the submission or to seek further clarification. Further information on acceptable secondary publication can be found in the ICMJE ‘Recommendations for the Conduct, Reporting, Editing, and Publishing of Scholarly Work in Medical Journals’.CopyrightUsually, sponsors and authors are required to sign over certain publication rights to the journal through copyright transfer or a licensing agreement; thereafter, authors should obtain written permission from the journal/publisher if they wish to reuse the published material elsewhere.[6]Authorship and its various associationsThe ICMJE recommendation lists four criteria of authorship:Substantial contributions to the conception of design of the work, or the acquisition, analysis or interpretation of data for the workDrafting the work or revising it critically for important intellectual contentFinal approval of the version to be publishedAgreement to be accountable for all aspects of the work in ensuring that questions related to the accuracy or integrity of any part of the work are appropriately investigated and resolved.Authors and researchers have an ethical obligation to ensure the accuracy, publication and dissemination of the result of research,[4] as well as disclosing to publishers relevant corrections, retractions and errata, to protect scientific integrity of published evidence. Every research study involving human subjects must be registered in a publicly accessible database (e.g., ANZCTR [Australia and NZ], Home - ClinicalTrials.gov [US and non-US], CTRI [India]) and the results made publicly available.[4] Sponsors of clinical trials must allow all study investigators and manuscript authors access to the full study data set and the right to use all study data for publication.[5] Source documents (containing trial data) and clinical study report (results and interpretation of trial) form part of the essential documentation that must be retained for a length of time prescribed by the applicable local legislation.[1] The ICMJE is currently proposing a requirement of authors to share with others de-identified individual patient data underlying the results presented in articles published in member journals.[18]Those who have contributed to the work but do not meet all four criteria should be acknowledged; some of these activities include provision of administrative support, writing assistance and proofreading. They should have their written permission sought for their names to be published and disclose any potential conflicts of interest.[6] The Council of Scientific Editors has identified several inappropriate types of authorship, such as guest authorship, honorary or gift authorship and ghost authorship.[6] Various interventions should be put in place to prevent such fraudulent practices in research.[19] The list of essential documents for the conduct of a clinical trial is included in other articles of the same issue.Go to:SUMMARYThe recent increase in research activities has led to concerns regarding ethical and legal issues. Various guidelines have been formulated by organisations and authorities, which serve as a guide to promote integrity, compliance and ethical standards in the conduct of research. Fraud in research undermines the quality of establishing evidence-based medicine, and interventions should be put in place to prevent such practices. A general overview of ethical and legal principles will enable research to be conducted in accordance with the best practices.

Notifications(460 kb)Money Transfer Service Scheme – Revised GuidelinesRBI/2012-13/436A.P. (DIR Series) Circular No. 89March 12, 2013ToAll Authorised Persons, who are Indian Agents under Money Transfer Service SchemeMadam / Sir,Money Transfer Service Scheme – Revised GuidelinesAttention of all Authorised Persons (APs), who are Indian Agents under the Money Transfer Service Scheme (MTSS) is invited to the Notification dated June 4, 2003 on MTSS, as amended from time to time and the specific permission accorded to them under FEMA, 1999 by the Reserve Bank to undertake inward cross-border money transfer activities in India, through tie-up arrangements with Overseas Principals.2. The MTSS Guidelines have been revised in consultation with the Government of India and the revised MTSS Guidelines are in the Annex-I.3. All other instructions issued vide the said Notification ibid, as amended from time to time remain unchanged.4. These guidelines would also be applicable mutatis mutandis to all Sub Agents of the Indian Agents under MTSS and it will be the sole responsibility of the APs (Indian Agents) to ensure that their Sub Agents also adhere to these guidelines.5. Authorised Persons (Indian Agents) may bring the contents of this circular to the notice of their constituents concerned.6. The directions contained in this Circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals if any, required under any other law.Yours faithfully,(Rudra Narayan Kar)Chief General Manager--in-ChargeAnnex-IRevised Guidelines on Money Transfer Service SchemePART-ASECTION IGuidelines for permitting(authorising) Indian Agents under Money Transfer Service Scheme (MTSS):1. Introduction1.1Money Transfer Service Scheme (MTSS) is a quick and easy way of transferring personal remittances from abroad to beneficiaries in India. Only inward personal remittances into India such as remittances towards family maintenance and remittances favouring foreign tourists visiting India are permissible. No outward remittance from India is permissible under MTSS. The system envisages a tie-up between reputed money transfer companies abroad known as Overseas Principals and agents in India known as Indian Agents who would disburse funds to beneficiaries in India at ongoing exchange rates. The Indian Agent is not allowed to remit any amount to the Overseas Principal. Under MTSS the remitters and the beneficiaries are individuals only.Statutory Basis1.2 In terms of the powers granted under Section 10 (1) of the Foreign Exchange Management Act (FEMA), 1999, the Reserve Bank of India may accord necessary permission (authorization) to any person to act as an Indian Agent under the Money Transfer Service Scheme. No person can handle the business of cross-border money transfer to India in any capacity unless specifically permitted by the Reserve Bank.1.3 These guidelines lay down basic conditions for grant of permission (authorisation) to Indian Agents and renewal of existing MTSS permissions given to them. These guidelines also include guidelines for Overseas Principals and appointment of Sub-Agents by the Indian Agents. The guidelines are not exhaustive and other relevant information, security considerations, etc., will be factored into the decision of permitting an entity. These guidelines will apply to all applications pending with the Reserve Bank for new arrangements, renewal of permissions given to Indian Agents, etc. Existing Indian Agents who do not meet the eligibility norms will have to meet the norms in a phased manner with the approval of the Reserve Bank or wind up the business of money transfer immediately.2. GuidelinesEntry NormsThe applicant to become an Indian Agent should be an Authorised Dealer Category-I bank or an Authorised Dealer Category-II or a Full Fledged Money Changer (FFMC), as defined in the A.P. (DIR Series) Circular No. 25 [A.P. (FL Series) Circular No. 02] dated March 6, 2006, or a Scheduled Commercial Bank or the Department of Posts.The applicant should have minimum Net Owned Funds of Rs.50 lakh.Note :- (i) Owned Funds :- (Paid-up Equity Capital + Free reserves + Credit balance in Profit & Loss A/c) minus (Accumulated balance of loss, Deferred revenue expenditure and Other intangible assets)(ii) Net Owned Funds :- Owned funds minus the amount of investments in shares of its subsidiaries, companies in the same group, all (other) non-banking financial companies as also the book value of debentures, bonds, outstanding loans and advances made to and deposits with its subsidiaries and companies in the same group in excess of 10 per cent of the Owned funds.3. Procedure for making Applications to the Reserve BankApplication for necessary permission to act as an Indian Agent may be made to the Chief General Manager-in-Charge, Forex Markets Division, Foreign Exchange Department, Reserve Bank of India, Central Office, Amar Building, Fort, Mumbai-400 001 and should be accompanied by the documents pertaining to its proposed Overseas Principal, as detailed in Section II below and the following documents:A declaration to the effect that no proceedings have been initiated by / are pending with the Directorate of Enforcement (DoE) / Directorate of Revenue Intelligence (DRI) or any other law enforcing authorities, against the applicant or its directors and that no criminal cases are initiated / pending against the applicant or its directors.A declaration to the effect that proper policy framework on KYC / AML / CFT, in accordance with the guidelines issued vide A.P.(DIR Series) Circular No. 18[ A.P.(FL/RL Series) Circular No. 05] dated November 27, 2009, as amended from time to time, will be put in place on obtaining permission (authorization) of the Reserve Bank and before commencement of money transfer operations.Name and address of the Overseas Principal with whom the MTSS will be conducted.Full details of the operation of the scheme by the Overseas Principal.List of branches in India and their addresses where MTSS will be conducted by the applicant.Estimated volume of business per month/year under the scheme.Audited Balance Sheet and Profit and Loss Account for the last two financial years of the applicant, if available or a copy of the latest audited accounts, with a certificate from Statutory Auditors regarding the position of the Net Owned Funds as on the date of application.Memorandum and Articles of Association of the applicant where either a provision exists for taking up money transfer business or an appropriate amendment thereto has been filed with the Company Law Board.Confidential Report from at least two of the applicant's bankers in sealed cover.Details of sister/ associated concerns of the applicant functioning in the financial sector.A certified copy of the board resolution for undertaking money transfer business by the applicant.A letter from the proposed Overseas Principal, agreeing to enter into tie up with the applicant and also to provide necessary collateral.4. Collateral requirementCollateral equivalent to 3 days' average drawings or US $ 50,000, whichever is higher, may be kept by the Overseas Principal in favour of the Indian Agent with a designated bank in India. The minimum amount of US $ 50,000 shall be kept as a foreign currency deposit while the balance amount may be kept in the form of a Bank Guarantee. The adequacy of collateral should be reviewed by Indian Agents at quarterly intervals on the basis of remittances received during the past three months.5. Other conditionsOnly cross-border personal remittances, such as, remittances towards family maintenance and remittances favouring foreign tourists visiting India shall be allowed under this arrangement. Donations/contributions to charitable institutions/trusts, trade related remittances, remittance towards purchase of property, investments or credit to NRE Accounts shall not be made through this arrangement.A cap of US $ 2500 has been placed on individual remittance under the scheme. Amounts up to Rs.50,000/- may be paid in cash to a beneficiary in India. Any amount exceeding this limit shall be paid by means of account payee cheque/ demand draft/ payment order, etc., or credited directly to the beneficiary's bank account only. However, in exceptional circumstances, where the beneficiary is a foreign tourist, higher amounts may be disbursed in cash. Full details of such transactions should be kept on record for scrutiny by the auditors/ inspectors.Only 30 remittances can be received by a single individual beneficiary under the scheme during a calendar year.6. Criteria for RBI decisions(i) The Indian Agents need to have strength and efficiency to function profitably in a highly competitive environment. As a number of Indian Agents are already functioning, permission (authorization) will be issued on a very selective basis to those who meet the above requirements, have necessary outreach and who are likely to conform to the best international and domestic standards of customer service and efficiency.(ii) The Indian Agent should commence its money transfer operations under the scheme within a period of six months from the date of issuance of permission(authorization) and inform the Central Office and the Regional Office concerned of the Foreign Exchange Department of the Reserve Bank.SECTION IIGuidelines for Overseas Principals:Indian Agents entering into arrangements with Money Transfer Operators overseas, known as Overseas Principals, may note that Overseas Principals with adequate volume of business, track record and outreach will only be considered under the scheme. Further, since the primary objective of permitting the business of money transfer business in the country is to facilitate cheaper and more efficient means of receipt of remittances, operators with limited outreach in terms of branch network in the country and localized operations overseas will not be entertained.Applicant Indian Agents should submit the following documents / comply with the following requirements, in respect of their Overseas Principals:The Overseas Principal should obtain necessary authorisation from the Department of Payment and Settlement Systems, Reserve Bank of India under the provisions of the Payment and Settlement Systems Act (PSS Act), 2007 to commence/ operate a payment system. Prior to such authorization, the Reserve Bank will verify the background and antecedents of the Overseas Principal with the help of Govt. of India,The Overseas Principal should be a registered entity, licenced by the Central Bank / Government or financial regulatory authority of the country concerned for carrying on Money Transfer Activities. The country of registration of the Overseas Principal should be AML compliant.The minimum Net Worth of Overseas Principals should be at least US $ 1 million as per the latest audited balance sheet, which should be maintained at all times. However, the Reserve Bank may consider relaxing the minimum Net Worth criterion in case of Overseas Principals incorporated in FATF member countries and are supervised by the concerned Central Bank/ Government or financial regulatory authority.The Overseas Principal should be well established in the money transfer business with a track record of operations in well regulated markets.The arrangement with Overseas Principal should result in considerably increasing access to formal money transfer facilities at both ends.The Overseas Principal should be registered with the overseas trade / Industry bodies.The Overseas Principal should have a good rating from one of the international credit rating agencies.The Overseas Principal should submit confidential reports from at least two of its bankers.The Overseas Principal should submit a report certified by independent Chartered Accountants, regarding steps taken to comply with anti money laundering norms in the home/ host country.The Overseas Principals will be fully responsible for the activities of their Agents and Sub Agents in India.Proper records of remitters as also beneficiaries pertaining to all pay-outs in India are to be maintained by the Overseas Principals. All records must be made accessible on demand to the Reserve Bank or other agencies of the Government of India, viz., Ministry of Finance, Ministry of Home Affairs, FIU-IND, etc. Full details of the remitters and the beneficiaries should be provided by the Overseas Principals, if called for.SECTION IIIGuidelines for appointment of Sub Agents by Indian Agents:1. The SchemeUnder the Scheme, Indian Agents can enter into Sub Agency agreements with entities, fulfilling certain conditions, for the purpose of undertaking money transfer business.2. Sub AgentsA Sub Agent should have a place of business, and whose bonafides are acceptable to the Indian Agent. Indian Agents are free to decide on the tenor of the arrangement as also the commission or fee through mutual agreement with the Sub Agent. The audit and on-site inspection of premises and records of the Sub Agents by the Indian Agent to be conducted at least once in a month and in a year respectively.3. Procedure for Submission of information in respect of Sub Agents by Indian AgentsIndian Agents should submit necessary information in the prescribed format (Annex-III) in soft copy form pertaining to their existing Sub Agents within one month of the date of this circular, to the respective Regional Offices of the Foreign Exchange Department of the Reserve Bank under whose jurisdiction the registered office of the Indian Agent falls, for onward submission to the Ministry of Home Affairs (MHA), Govt. of India (GoI) through the Ministry of Finance (MoF), Govt. of India (GoI). Thereafter, Indian Agents should submit on a quarterly basis necessary information in the prescribed format (Annex-III) in soft copy form pertaining to their Sub Agents appointed during a quarter within 15 days of the end of the quarter, to the respective Regional Offices of the Foreign Exchange Department of the Reserve Bank under whose jurisdiction the registered office of the Indian Agent falls for onward submission to the Ministry of Home Affairs (MHA), Govt. of India (GoI) through the Ministry of Finance (MoF), Govt. of India (GoI). In case of any objection by the MHA, the Sub Agency arrangement concerned should be terminated immediately.Indian Agents should also furnish certificates along with the information in Annex-III that the Sub Agents appointed by them comply with the eligibility norms and also they have done due diligence, wherever applicable, in respect of them.4. Due Diligence of Sub AgentsThe Indian Agents and the Overseas Principals should undertake the following minimum checks while conducting due diligence of the Sub Agents, other than ADs Cat-I, ADs Cat-II, Scheduled Commercial Banks, FFMCs and the Deptt. of Posts.existing business activities of the Sub Agent/ its position in areaShop & Establishment/ other applicable municipal certification in favour of the Sub Agentverification of physical existence of location of the Sub Agentconduct certificate of the Sub Agent from the local police authorities. (certified copy of Memorandum and Articles of Association and Certificate of Incorporation in respect of incorporated entities).Note: Although obtaining of conduct certificate of the Sub Agent from the local police authorities is non-mandatory for the Indian Agents, the Indian Agents must take due care to avoid appointing individuals/ entities as Sub Agents who have cases / proceedings initiated / pending against them by any law enforcing agencies.declaration regarding past criminal cases, cases initiated/ pending against the Sub Agent and/or its directors/ partners by any law enforcing agency, if anyPAN Card of the Sub Agents and its directors/ partnersPhotographs of the directors/ partners and the key persons of the Sub AgentThe above checks should be done on a regular basis, at least once in a year. The Indian Agents should obtain from the Sub Agents proper documentary evidence confirming the location of the Sub Agents in addition to personal visits to the site. The Indian Agents should discontinue agreements with Sub Agents who do not meet the criteria laid down above within three months from the date of this circular.5. Selection of CentersThe Indian Agents are free to select centers for operationalising the Scheme. However, this may be advised to the Reserve Bank.6. TrainingThe Indian Agents would be expected to impart training to the Sub Agents as regards operations and maintenance of records.7. Reporting, Audit and InspectionThe Indian Agents would be expected to put in place adequate arrangements for reporting of transactions by the Sub Agents to the Indian Agents (on a regular basis) in a simple format to be prescribed by them, say at monthly intervals.Regular spot audits of all locations of Sub Agents, at least on a monthly basis, should be conducted by Indian Agents. Such audits should involve a dedicated team and 'mystery customer'(Individuals acting as potential customers to experience and measure the extent up to which people and process perform as they should) concept should be used to test the compliance carried out by Sub Agents. As mentioned above, a system of inspection of the books of the Sub Agents should be put in place. The purpose of such inspection, which should be done at least once a year, would be to ensure that the money transfer business is being carried out by the Sub Agents in conformity with the terms of agreement/prevailing RBI guidelines and that necessary records are being maintained by the Sub Agents.Note:- As of now, the Indian Agents are fully responsible for the activities of their Sub Agents. While the Indian Agents will be encouraged to act as self-regulated entities, the onus of ensuring the conduct of activities of the Sub Agents in the prescribed manner will lie solely on the Indian Agents concerned and Reserve Bank of India can in no way be held responsible for the activities of the Sub Agents. Each Indian Agent would be required to conduct due diligence before appointing a Sub Agent and any irregularity observed could render the Indian Agent’s permission liable for cancellation.SECTION IVGuidelines for renewal of permission(authorization) of existing Indian Agents:1. Necessary permission to Indian Agents will be issued initially for a period of one year, which may be renewed for one to three years at a time on the basis of fulfilment of all conditions and other directions/ instructions issued by the Reserve Bank from time to time by Indian Agents.2. The applicant should be an Authorised Dealer Category-I bank or an Authorised Dealer Category-II or a Full Fledged Money Changer (FFMC), as defined in the A.P. (DIR Series) Circular No. 25 [A.P. (FL Series) Circular No. 02] dated March 6, 2006, or a Scheduled Commercial Bank or the Department of Posts.3. The Indian Agent should have minimum Net Owned Funds of Rs.50 lakh.4. Application for renewal of permission should be submitted to the Regional Office concerned of the Foreign Exchange Department of the Reserve Bank under whose jurisdiction the registered office of the Indian Agent falls along-with the documents pertaining to the Overseas Principal as detailed in Section II above and the following documents:A declaration to the effect that no proceedings have been initiated by / are pending with the Directorate of Enforcement (DoE) / Directorate of Revenue Intelligence (DRI) or any other law enforcing authorities, against the Indian Agent or its directors and that no criminal cases are initiated / pending against the Indian Agent or its directors.A write up on the KYC / AML / CFT, risk management and internal control policy framework, put in place by the Indian Agent.Audited Balance Sheet and Profit and Loss Account for the last two financial years of the Indian Agent, if available or a copy of the latest audited accounts, with a certificate from statutory auditors regarding the position of the Net Owned Funds as on the date of application.Confidential Reports from at least two of the bankers of the Indian Agent in sealed cover.Details of sister/ associated concerns of the Indian Agent functioning in the financial sector.A certified copy of the board resolution for renewal of permission.Note :- An application for the renewal of permission under MTSS shall be made not later than one month, or such other period as the Reserve Bank may prescribe, before the expiry of the permission. Where an entity submits an application for the renewal of its MTSS permission, the permission shall continue in force until the date on which the permission is renewed or the application for renewal of permission is rejected, as the case may be. No application for renewal of MTSS permission shall be made after the expiry of the permission.SECTION VInspection of Indian AgentsInspections of the Indian Agents may be conducted by the Reserve Bank under the provisions of Section 12(1) of the FEMA, 1999.SECTION VIKYC/ AML/ CFT Guidelines for the Indian AgentsDetailed instructions on Know Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/Combating the Financing of Terrorism (CFT) for Indian Agents under MTSS in respect of cross-border inward remittance activities, in the context of the FATF Recommendations on Anti Money Laundering standards and on Combating the Financing of Terrorism have been prescribed (Annex-II).SECTION VIIGeneral InstructionsAll Overseas Principals are required to submit their annual audited balance sheet along with a certificate on Net Worth from their Statutory Auditors to the Central Office of the Foreign Exchange Department and the Department of Payment and Settlement Systems of the Reserve Bank. Similarly, all Indian Agents are required to submit their annual audited balance sheet along with a certificate from their Statutory Auditors on Net Owned Funds to the Regional offices concerned of the Foreign Exchange Department of the Reserve Bank. As the Overseas Principals and the Indian Agents are expected to maintain minimum Net Worth and Net Owned Funds respectively on an ongoing basis, they are required to bring it to the notice of the Reserve Bank immediately along with a detailed plan of restoring the Net Worth/ Net Owned Funds to the minimum required level, if there is any reduction in their Net Worth/ Net Owned Funds below the minimum level.PART-BReports / Statements1. A quarterly statement of the quantum of remittances received, as per the enclosed format (Annex-IV) should be furnished by the Indian Agents to the Regional Offices (ROs) concerned of the Foreign Exchange Department (FED) of the Reserve Bank, under whose jurisdiction their registered offices fall and Foreign Exchange Department, Forex Markets Division, Central Office, Amar Building, Fort, Mumbai-400001 within 15 days from the close of the quarter to which it relates.2. List of their additional locations should be furnished by the Indian Agents to the ROs concerned of the FED of the Reserve Bank, under whose jurisdiction their registered offices fall, on quarterly basis within 15 days from the close of the quarter to which it relates.3. Indian Agents should forward the list of their Sub Agents, Overseas Principal-Indian Agent wise along with the addresses of all the locations of their Sub Agents in excel format in soft form by emailing the same. Indian Agents should e-mail in excel format in soft form and to the concerned FED Regional Office, full updated list (names and addresses of all the locations) of the Sub Agents, whenever they appoint/ remove any Sub Agent. Indian Agents should visit the RBI website and verify the list of Sub Agents on regular intervals and any aberration to the list observed may immediately be brought to the notice of the concerned FED ROs and FED Central Office (CO). Further, Indian Agents should confirm the veracity on quarterly basis of the list placed on RBI wesbite to FED CO either in form of a letter or by e-mail within 15 days of the end of a quarter.3. A half-yearly statement of the collateral held as at the end of June and December every year, as per the enclosed format (Annex-V) should be furnished by the Indian Agents to the ROs concerned of the FED of the Reserve Bank, under whose jurisdiction their registered offices fall and Foreign Exchange Department, Forex Markets Division, Central Office, Amar Building, Fort, Mumbai-400001 within 15 days from the close of the half-year to which it relates.Annex-IIKYC/ AML/ CFT Guidelines for Indian AgentsSECTION-IKnow Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/Combating the Financing of Terrorism (CFT)/Obligation of Authorised Persons (Indian Agents) under Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009 - Cross Border Inward Remittance under Money Transfer Service Scheme1. IntroductionThe offence of Money Laundering has been defined in Section 3 of the Prevention of Money Laundering Act, 2002 (PMLA) as "whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money laundering". Money Laundering can be called a process by which money or other assets obtained as proceeds of crime are exchanged for "clean money" or other assets with no obvious link to their criminal origins.2. The objectiveThe objective of prescribing KYC/AML/CFT guidelines is to prevent the system of cross border inward money transfer into India from all over the world under the MTSS from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist financing activities. KYC procedures also enable Authorised Persons, who are Indian Agents under MTSS [referred as APs (Indian Agents) hereinafter] to know/understand their customers and their financial dealings better, which in turn help them manage their risks prudently.3. Definition of CustomerFor the purpose of KYC policy, a ‘Customer’ is defined as :a person who receives occasional/ regular cross border inward remittances under MTSS;one on whose behalf a cross border inward remittance under MTSS is received (i.e., the beneficial owner)[In view of Government of India Notification dated February 12, 2010 - Rule 9, sub-rule (1A) of PML Rules - 'Beneficial Owner' means the natural person who ultimately owns or controls a client and or the person on whose behalf a transaction is being conducted, and includes a person who exercises ultimate effective control over a juridical person].4. Guidelines4.1 GeneralAPs (Indian Agents) should keep in mind that the information collected from the customer while making payment of cross border inward remittances is to be treated as confidential and details thereof are not to be divulged for cross selling or any other like purposes. APs (Indian Agents) should, therefore, ensure that information sought from the customer is relevant to the perceived risk, is not intrusive, and is in conformity with the guidelines issued in this regard. Any other information from the customer, wherever necessary, should be sought separately with his/her consent.4.2 KYC PolicyAPs (Indian Agents) should frame their KYC policies incorporating the following four key elements:Customer Acceptance Policy;Customer Identification Procedures;Monitoring of Transactions; andRisk Management.4.3 Customer Acceptance Policy (CAP)a) Every AP (Indian Agent) should develop a clear Customer Acceptance Policy laying down explicit criteria for acceptance of customers. The Customer Acceptance Policy must ensure that explicit guidelines are in place on the following aspects of customer relationship in the AP (Indian Agent).No remittance is received in anonymous or fictitious/ benami name(s). [APs (Indian Agents) should not allow any transaction in any anonymous or fictitious name (s) or on behalf of other persons whose identity has not been disclosed or cannot be verified in view of Government of India Notification dated June 16, 2010 Rule 9, sub-rule (1C)].Parameters of risk perception are clearly defined in terms of the nature of business activity, location of customer and his clients, mode of payments, volume of turnover, social and financial status, etc. to enable categorisation of customers into low, medium and high risk (APs may choose any suitable nomenclature, viz., level I, level II and level III). Customers requiring very high level of monitoring, e.g., Politically Exposed Persons (PEPs) may, if considered necessary, be categorised even higher.Documentation requirements and other information to be collected in respect of different categories of customers depending on perceived risk and keeping in mind the requirements of Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009, Prevention of Money-Laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005, as amended from time to time, as well as instructions / guidelines issued by the Reserve Bank, from time to time.Not to make payment of any remittance where the AP (Indian Agent) is unable to apply appropriate customer due diligence measures, i.e., AP (Indian Agent) is unable to verify the identity and /or obtain documents required as per the risk categorisation due to non-cooperation of the customer or non reliability of the data/information furnished to the AP (Indian Agent). It is, however, necessary to have suitable built in safeguards to avoid harassment of the customer. In the circumstances when an AP (Indian Agent) believes that it would no longer be satisfied that it knows the true identity of the customer, the AP (Indian Agent) should file an STR with FIU-IND.Circumstances, in which a customer is permitted to act on behalf of another person/entity, should be clearly spelt out, the beneficial owner should be identified and all reasonable steps should be taken to verify his identity.b) APs (Indian Agents) should prepare a profile for each new customer, where regular cross-border inward remittances are/ expected to be received, based on risk categorisation. The customer profile may contain information relating to customer’s identity, social / financial status, etc. The nature and extent of due diligence will depend on the risk perceived by the AP (Indian Agent). However, while preparing customer profile, APs (Indian Agents) should take care to seek only such information from the customer, which is relevant to the risk category and is not intrusive. The customer profile is a confidential document and details contained therein should not be divulged for cross selling or any other purposes.c) For the purpose of risk categorisation, individuals (other than High Net Worth) and entities whose identities and sources of wealth can be easily identified and transactions by whom by and large conform to the known profile, may be categorised as low risk. Customers that are likely to pose a higher than average risk should be categorised as medium or high risk depending on customer's background, nature and location of activity, country of origin, sources of funds and his client profile, etc. APs(Indian Agents) should apply enhanced due diligence measures based on the risk assessment, thereby requiring intensive ‘due diligence’ for higher risk customers, especially those for whom the sources of funds are not clear. Examples of customers requiring enhanced due diligence include (a) non­resident customers; (b) customers from countries that do not or insufficiently apply the FATF standards; (c) high net worth individuals; (d) politically exposed persons (PEPs); (e) non-face to face customers; and (f) those with dubious reputation as per public information available, etc.d) It is important to bear in mind that the adoption of customer acceptance policy and its implementation should not become too restrictive and must not result in denial of cross border inward remittance facilities to general public.e) With a view to preventing the system of cross border inward money transfer into India from all over the world under the MTSS from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist financing activities, whenever there is suspicion of money laundering or terrorist financing or when other factors give rise to a belief that the customer does not, in fact, pose a low risk, APs (Indian Agents) should carry out full scale customer due diligence (CDD) before making payment of any remittance.4.4 Customer Identification Procedure (CIP)a) The policy approved by the Board of APs (Indian Agents) should clearly spell out the Customer Identification Procedure while making payment to a beneficiary or when the AP has a doubt about the authenticity/veracity or the adequacy of the previously obtained customer identification data. Customer identification means identifying the customer and verifying his/her identity by using reliable, independent source documents, data or information. APs (Indian Agents) need to obtain sufficient information necessary to establish, to their satisfaction, the identity of each new customer, whether regular or occasional. Being satisfied means that the AP must be able to satisfy the competent authorities that due diligence was observed based on the risk profile of the customer in compliance with the extant guidelines in place. Such risk based approach is considered necessary to avoid disproportionate cost to APs (Indian Agents) and a burdensome regime for the customers. The APs (Indian Agents) should obtain sufficient identification data to verify the identity of the customer and his address/location. For customers that are natural persons, the APs (Indian Agents) should obtain sufficient identification document /s to verify the identity of the customer and his address/location. For customers that are legal persons, the AP (Indian Agent) should (i) verify the legal status of the legal person through proper and relevant documents; (ii) verify that any person purporting to act on behalf of the legal person is so authorised and identify and verify the identity of that person; and (iii) understand the ownership and control structure of the customer and determine who are the natural persons who ultimately control the legal person. Customer identification requirements in respect of a few typical cases, especially, legal persons requiring an extra element of caution are given in paragraph 4.5 below for guidance of APs (Indian Agents). APs (Indian Agents) may, however, frame their own internal guidelines based on their experience of dealing with such persons, their normal prudence and the legal requirements as per established practices. If the AP (Indian Agent) decides to undertake such transactions in terms of the Customer Acceptance Policy, the AP (Indian Agent) should take reasonable measures to identify the beneficial owner(s) and verify his/her/their identity in a manner so that it is satisfied that it knows who the beneficial owner(s) is/are [in view of Government of India Notification dated June 16, 2010 - Rule 9 sub-rule (1A) of PML Rules].Note: Rule 9(1A) of Prevention of Money Laundering Rules, 2005 requires that every AP (Indian Agent) under MTSS shall identify the beneficial owner and take all reasonable steps to verify his identity. The term "beneficial owner" has been defined as the natural person who ultimately owns or controls a client and/or the person on whose behalf the transaction is being conducted, and includes a person who exercises ultimate effective control over a juridical person. Government of India has since examined the issue and has specified the procedure for determination of Beneficial Ownership. The procedure as advised by the Government of India is as under:A. Where the client is a person other than an individual or trust, the AP (Indian Agents) shall identify the beneficial owners of the client and take reasonable measures to verify the identity of such persons, through the following information:The identity of the natural person, who, whether acting alone or together, or through one or more juridical person, exercises control through ownership or who ultimately has a controlling ownership interest.Explanation: Controlling ownership interest means ownership of/entitlement to more than 25 percent of shares or capital or profits of the juridical person, where the juridical person is a company; ownership of/entitlement to more than 15% of the capital or profits of the juridical person where the juridical person is a partnership; or, ownership of/entitlement to more than 15% of the property or capital or profits of the juridical person where the juridical person is an unincorporated association or body of individuals.In cases where there exists doubt under (i) as to whether the person with the controlling ownership interest is the beneficial owner or where no natural person exerts control through ownership interests, the identity of the natural person exercising control over the juridical person through other means.Explanation: Control through other means can be exercised through voting rights, agreement, arrangements, etc.Where no natural person is identified under (i) or (ii) above, the identity of the relevant natural person who holds the position of senior managing official.B. Where the client is a trust, the AP (Indian Agent) shall identify the beneficial owners of the client and take reasonable measures to verify the identity of such persons, through the identity of the settler of the trust, the trustee, the protector, the beneficiaries with 15% or more interest in the trust and any other natural person exercising ultimate effective control over the trust through a chain of control or ownership.C. Where the client or the owner of the controlling interest is a company listed on a stock exchange, or is a majority-owned subsidiary of such a company, it is not necessary to identify and verify the identity of any shareholder or beneficial owner of such companies.b) Some close relatives, e.g., wife, son, daughter and parents, etc., who live with their husband, father / mother and son / daughter, as the case may be, may find it difficult to undertake transactions with APs (Indian Agents) as the utility bills required for address verification are not in their name. It is clarified, that in such cases, APs (Indian Agents) can obtain an identity document and a utility bill of the relative with whom the prospective customer is living along with a declaration from the relative that the said person (prospective customer) wanting to undertake a transaction is a relative and is staying with him/her. APs (Indian Agents) can use any supplementary evidence such as a letter received through post for further verification of the address. While issuing operational instructions to the branches on the subject, APs (Indian Agents) should keep in mind the spirit of instructions issued by the Reserve Bank and avoid undue hardships to individuals who are, otherwise, classified as low risk customers.c) APs (Indian Agents) should introduce a system of periodical updation of customer identification data, if there is a continuing relationship.d) An indicative list of the type of documents / information that may be relied upon for customer identification is given in SECTION-II. It is clarified that permanent correct address, as referred to in SECTION-II means the address at which a person usually resides and can be taken as the address as mentioned in a utility bill or any other document accepted by the AP for verification of the address of the customer. When there are suspicions of money laundering or financing of the activities relating to terrorism or where there are doubts about the adequacy or veracity of previously obtained customer identification data, APs (Indian Agents) should review the due diligence measures including verifying again the identity of the client and obtaining information on the purpose and intended nature of the business relationship, as the case may be. [In view of Government of India Notification dated June 16, 2010- Rule 9 sub-rule (1D) of PML Rules].e) Payment to Beneficiariesi) For payment to beneficiaries, the identification documents, as mentioned at SECTION-II, should be verified and a copy retained. The copy of identification documents obtained should contain current and legible photograph of beneficiaries. This shall continue for a period of next six months from the date of this circular, subject to submission of a copy of the identifications documents during every payment. Further, in the event of a beneficiary being discovered to have received funds on the basis of a photo ID which did not sport his/ her photograph, action would also be initiated against the Agent/ Sub Agent. Thereafter, in addition to this, the identification requirements for cash payment to beneficiary shall also include biometric identification of the beneficiary. This stipulation will ultimately be linked to UID when it is fully implemented.ii) A cap of US $ 2500 has been placed on individual remittances under the scheme. Amounts up to Rs.50,000 may be paid in cash. Any amount exceeding this limit shall be paid only by means of cheque/D.D. /P.O., etc., or credited directly to the beneficiary's bank account. However, in exceptional circumstances, where the beneficiary is a foreign tourist, higher amounts may be disbursed in cash. Only 30 remittances can be received by a single individual during a calendar year.4.5 Customer Identification Requirements – Transactions by Politically Exposed Persons (PEPs) - Indicative GuidelinesPolitically exposed persons are individuals who are or have been entrusted with prominent public functions in a foreign country, e.g., Heads of States or of Governments, senior politicians, senior government/judicial/military officers, senior executives of state-owned corporations, important political party officials, etc. APs (Indian Agents) should gather sufficient information on any person/customer of this category intending to undertake a transaction and check all the information available on the person in the public domain. APs (Indian Agents) should verify the identity of the person and seek information about the source /s of wealth and source /s of funds before accepting the PEP as a customer. The decision to undertake a transaction with a PEP should be taken at a senior level which should be clearly spelt out in the Customer Acceptance Policy. APs (Indian Agents) should also subject such transactions to enhanced monitoring on an ongoing basis. The above norms may also be applied to transactions with the family members or close relatives of PEPs. The above norms may also be applied to customers who become PEPs subsequent to establishment of the business relationship. These instructions are also applicable to transactions where a PEP is the ultimate beneficial owner. Further, in regard to transactions in case of PEPs, it is reiterated that APs (Indian Agents) should have appropriate ongoing risk management procedures for identifying and applying enhanced CDD to PEPs, customers who are family members or close relatives of PEPs and transactions of which a PEP is the ultimate beneficial owner.4.6 Monitoring of TransactionsOngoing monitoring is an essential element of effective KYC procedures. APs (Indian Agents) can effectively control and reduce their risk only if they have an understanding of the normal and reasonable receipt of remittances of the beneficiary so that they have the means of identifying receipts that fall outside the regular pattern of activity. However, the extent of monitoring will depend on the risk sensitivity of the remittance. APs (Indian Agents) should pay special attention to all complex, unusually large receipts and all unusual patterns which have no apparent economic or visible lawful purpose. APs (Indian Agents) may prescribe threshold limits for a particular category of receipts and pay particular attention to the receipts which exceed these limits. High-risk receipts have to be subjected to intense monitoring.Every AP (Indian Agent) should set key indicators for such receipts, taking note of the background of the customer, such as the country of origin, sources of funds, the type of transactions involved and other risk factors. APs (Indian Agents) should put in place a system of periodical review of risk categorization of customers and the need for applying enhanced due diligence measures. Such review of risk categorisation of customers should be carried out periodically.APs (Indian Agents) should exercise ongoing due diligence with respect to the business relationship with every client and closely examine the transactions in order to ensure that they are consistent with their knowledge of the client, his business and risk profile and where necessary, the source of funds [In view of Government of India Notification dated June 16, 2010 -Rule 9, sub-rule (1B)]APs (Indian Agents) should examine the background and purpose of transactions with persons (including legal persons and other financial institutions) from jurisdictions included in the FATF Statements and countries that do not or insufficiently apply the FATF Recommendations. Further, if the transactions have no apparent economic or visible lawful purpose, the background and purpose of such transactions should, as far as possible, be examined and written findings together with all the documents should be retained and made available to the Reserve Bank/ other relevant authorities, on request.4.7 Attempted transactionsWhere the AP (Indian Agent) is unable to apply appropriate KYC measures due to non-furnishing of information and /or non-cooperation by the customer, the AP should not undertake the transaction. Under these circumstances, APs should make a suspicious transactions report to FIU-IND in relation to the customer, even if the transaction is not put through.4.8 Risk Managementa) The Board of Directors of the AP (Indian Agent) should ensure that an effective KYC programme is put in place by establishing appropriate procedures and ensuring effective implementation. It should cover proper management oversight, systems and controls, segregation of duties, training and other related matters. Responsibility should be explicitly allocated within the AP (Indian Agent) for ensuring that the APs’ policies and procedures are implemented effectively. APs (Indian Agents) should, in consultation with their Boards, devise procedures for creating risk profiles of their existing and new customers and apply various anti money laundering measures keeping in view the risks involved in a transaction.b) APs’ (Indian Agents) internal audit and compliance functions have an important role in evaluating and ensuring adherence to the KYC policies and procedures. As a general rule, the compliance function should provide an independent evaluation of the AP’s (Indian Agent’s) own policies and procedures, including legal and regulatory requirements. APs (Indian Agents) should ensure that their audit machinery is staffed adequately with individuals who are well-versed in such policies and procedures. The concurrent auditors should check all cross border inward remittance transactions under MTSS to verify that they have been undertaken in compliance with the anti-money laundering guidelines and have been reported whenever required to the concerned authorities. Compliance on the lapses, if any, recorded by the concurrent auditors should be put up to the Board. A certificate from the Statutory Auditors on the compliance with KYC / AML / CFT guidelines should be obtained at the time of preparation of the Annual Report and kept on record.4.9 Introduction of New TechnologiesAPs (Indian Agents) should pay special attention to any money laundering threats that may arise from new or developing technologies including transactions through internet that might favour anonymity and take measures, to prevent their use for money laundering purposes and financing of terrorism activities.4.10 Combating Financing of Terrorisma)In terms of PML Rules, suspicious transaction should include inter alia transactions which give rise to a reasonable ground of suspicion that these may involve the proceeds of an offence mentioned in the Schedule to the PMLA, regardless of the value involved. APs (Indian Agents) should, therefore, develop suitable mechanism through appropriate policy framework for enhanced monitoring of transactions suspected of having terrorist links and swift identification of the transactions and making suitable reports to the FIU-IND on priority.b) APs (Indian Agents) are advised to take into account risks arising from the deficiencies in AML/CFT regime of certain jurisdictions, viz., Iran, Uzbekistan, Pakistan, Turkmenistan, Sao Tome and Principe, Democratic People’s Republic of Korea (DPRK), Bolivia, Cuba, Ethiopia, Kenya, Myanmar, Sri Lanka, Syria, Turkey and Nigeria, as identified in FATF Statement (www.fatf-gafi.org) issued from time to time, while dealing with individuals from these jurisdictions. In addition to FATF Statements circulated by the Reserve Bank of India from time to time, (latest as on February 14, 2013, circulated vide the A.P. (DIR Series) Circular No. 71 dated January 10, 2013), APs (Indian Agents) should also consider using publicly available information for identifying countries, which do not or insufficiently apply the FATF Recommendations. All APs (Indian Agents) are accordingly advised to take into account risks arising from the deficiencies in AML/CFT regime of these countries, while entering into business relationships and transactions with persons (including legal persons and other financial institutions) from or in these countries/ jurisdictions and give special attention to these cases.4.11 Principal Officera) APs (Indian Agents) should appoint a senior management officer to be designated as Principal Officer. Principal Officer shall be located at the head/corporate office of the AP and shall be responsible for monitoring and reporting of all transactions and sharing of information as required under the law. The role and responsibilities of the Principal Officer should include overseeing and ensuring overall compliance with regulatory guidelines on KYC/ AML/ CFT issued from time to time and obligations under the Prevention of Money Laundering Act, 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009, rules and regulations made there under, as amended from time to time.The Principal Officer should also be responsible for developing appropriate compliance management arrangements across the full range of AML/CFT areas (e.g. CDD, record keeping, etc.). He will maintain close liaison with enforcement agencies, APs (Indian Agents) and any other institution which are involved in the fight against money laundering and combating financing of terrorism. To enable the Principal Officer to discharge his responsibilities, it is advised that the Principal Officer and other appropriate staff should have timely access to customer identification data and other CDD information, transaction records and other relevant information. Further, APs (Indian Agents) should ensure that the Principal Officer is able to act independently and report directly to the senior management or to the Board of Directors.b) The Principal Officer will be responsible for timely submission of CTR and STR to the FIU-IND.4.12 Maintenance of records of transactions/Information to be preserved/ Maintenance and preservation of records/ Cash and Suspicious Transactions Reporting to Financial Intelligence Unit- India (FIU-IND)Section 12 of the Prevention of Money Laundering Act (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009, casts certain obligations on the APs (Indian Agents) in regard to preservation and reporting of transaction information. APs (Indian Agents) are, therefore, advised to go through the provisions of Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009 and the Rules notified there under and take all steps considered necessary to ensure compliance with the requirements of Section 12 of the Act ibid.(i) Maintenance of records of transactionsAPs (Indian Agents) should introduce a system of maintaining proper record of transactions prescribed under Rule 3, as mentioned below:all cash transactions of the value of more than Rupees ten lakh or its equivalent in foreign currency;all series of cash transactions integrally connected to each other which have been valued below Rupees ten lakh or its equivalent in foreign currency where such series of transactions have taken place within a month and the aggregate value of such transactions exceeds Rupees ten lakh;all transactions involving receipts by non-profit organisations of value more than Rupees ten lakh or its equivalent in foreign currency [In view of Government of India Notification dated November 12, 2009 - Rule 3, sub-rule (1) clause (BA) of PML Rules];all cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine and where any forgery of a valuable security or a document has taken place facilitating the transaction; andAll suspicious transactions whether or not made in cash and by way of as mentioned in the Rules.(ii) Information to be preservedAPs (Indian Agents) are required to maintain all necessary information in respect of transactions referred to in Rule 3 to permit reconstruction of individual transactions including the following information:the nature of the transaction;the amount of the transaction and the currency in which it was denominated;the date on which the transaction was conducted; andthe parties to the transaction.(iii) Maintenance and Preservation of Recordsa) APs (Indian Agents) are required to maintain the records containing information of all transactions including the records of transactions detailed in Rule 3 above. APs (Indian Agents) should take appropriate steps to evolve a system for proper maintenance and preservation of transaction information in a manner that allows data to be retrieved easily and quickly whenever required or when requested by the competent authorities. Further, APs (Indian Agents) should maintain for at least ten years from the date of transaction between the AP and the client, all necessary records of transactions, both with residents and non-residents, which will permit reconstruction of individual transactions (including the amounts and types of currency involved, if any) so as to provide, if necessary, evidence for prosecution of persons involved in criminal activity.b) APs (Indian Agents) should ensure that records pertaining to the identification of the customer and his address (e.g. copies of documents like passport, driving license, PAN card, voter identity card issued by the Election Commission, utility bills, etc.) obtained while undertaking the transaction, are properly preserved for at least ten years from the date of cessation of the business relationship. The identification records and transaction data should be made available to the competent authorities upon request.c) In paragraph 4.6 of this Circular, APs (Indian Agents) have been advised to pay special attention to all complex, unusual large transactions and all unusual patterns of transactions, which have no apparent economic or visible lawful purpose. It is further clarified that the background including all documents/office records / memoranda pertaining to such transactions and purpose thereof should, as far as possible, be examined and the findings at branch as well as Principal Officer’s level should be properly recorded. Such records and related documents should be made available to help auditors in their day-to-day work relating to scrutiny of transactions and also to Reserve Bank/other relevant authorities. These records are required to be preserved for ten years as is required under Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009 and Prevention of Money-Laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005, as amended from time to time.(iv) Reporting to Financial Intelligence Unit – Indiaa) In terms of the PML rules, APs (Indian Agents) are required to report information relating to cash and suspicious transactions to the Director, Financial Intelligence Unit-India (FIU-IND) in respect of transactions referred to in Rule 3 at the following address:The Director,Financial Intelligence Unit-India (FIU-IND),6th Floor, Hotel Samrat,Chanakyapuri, New Delhi-110021.Website - http://fiuindia.gov.in/b) APs (Indian Agents) should carefully go through all the reporting formats. There are altogether four reporting formats, as detailed in SECTION-III, viz. i) Cash Transactions Report (CTR); ii) Electronic File Structure-CTR; iii) Suspicious Transactions Report (STR); and iv) Electronic File Structure-STR. The reporting formats contain detailed guidelines on the compilation and manner/procedure of submission of the reports to FIU-IND. It would be necessary for APs (Indian Agents) to initiate urgent steps to ensure electronic filing of all types of reports to FIU-IND. The related hardware and technical requirement for preparing reports in an electronic format, the related data files and data structures thereof are furnished in the instructions part of the formats concerned.c) In terms of instructions contained in paragraph 4.3(b) of this Circular, APs (Indian Agents) are required to prepare a profile for each customer based on risk categorisation. Further, vide paragraph 4.6, the need for periodical review of risk categorisation has been emphasized. It is, therefore, reiterated that APs (Indian Agents), as a part of transaction monitoring mechanism, are required to put in place an appropriate software application to throw alerts when the transactions are inconsistent with risk categorization and updated profile of customers. It is needless to add that a robust software throwing alerts is essential for effective identification and reporting of suspicious transactions.4.13 Cash and Suspicious Transaction ReportsA) Cash Transaction Report (CTR)While detailed instructions for filing all types of reports are given in the instructions part of the related formats, APs (Indian Agents) should scrupulously adhere to the following:i) The Cash Transaction Report (CTR) for each month should be submitted to the FIU‑IND by 15th of the succeeding month. Cash transaction reporting by branches to their controlling offices should, therefore, invariably be submitted on a monthly basis and APs (Indian Agents) should ensure to submit CTR for every month to FIU-IND within the prescribed time schedule.ii) While filing CTR, details of individual transactions below Rs.50,000 need not be furnished.iii) CTR should contain only the transactions carried out by the AP on behalf of their customers excluding transactions between the internal accounts of the APiv) A cash transaction report for the AP as a whole should be compiled by the Principal Officer of the AP every month in physical form as per the format specified. The report should be signed by the Principal Officer and submitted to the FIU-IND.v) In case of Cash Transaction Reports (CTR) compiled centrally by APs (Indian Agents) for the branches at their central data centre level, APs (Indian Agents) may generate centralised Cash Transaction Reports (CTR) in respect of branches under central computerized environment at one point for onward transmission to FIU-IND, provided:The CTR is generated in the format prescribed by Reserve Bank in Para 4.12(iv)(b) of this Circular.A copy of the monthly CTR submitted on its behalf to the FIU-IND is available at the branch concerned for production to auditors/inspectors, when asked for.The instruction on ‘Maintenance of records of transactions’, ‘Information to be preserved’ and ‘Maintenance and Preservation of records’ as contained above in this circular at Para 4.12 (i), (ii) and (iii) respectively are scrupulously followed by the branch.However, in respect of branches not under central computerized environment, the monthly CTR should be compiled and forwarded by the branch to the Principal Officer for onward transmission to the FIU-IND.B) Suspicious Transaction Reports (STR)i) While determining suspicious transactions, APs (Indian Agents) should be guided by definition of suspicious transaction contained in PML Rules, as amended from time to time.ii) It is likely that in some cases, transactions are abandoned/ aborted by customers on being asked to give some details or to provide documents. It is clarified that APs (Indian Agents) should report all such attempted transactions in STRs, even if not completed by customers, irrespective of the amount of the transaction.iii) APs (Indian Agents) should make STRs if they have reasonable ground to believe that the transaction, including an attempted transaction, involves proceeds of crime generally irrespective of the amount of transaction and/or the threshold limit envisaged for predicate offences in part B of Schedule of Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009.iv) The Suspicious Transaction Report (STR) should be furnished within 7 days of arriving at a conclusion that any transaction, including an attempted transaction, whether cash or non-cash, or a series of transactions integrally connected are of suspicious nature. The Principal Officer should record his reasons for treating any transaction or a series of transactions as suspicious. It should be ensured that there is no undue delay in arriving at such a conclusion once a suspicious transaction report is received from a branch or any other office. Such report should be made available to the competent authorities on request.v) In the context of creating KYC/ AML awareness among the staff and for generating alerts for suspicious transactions, APs (Indian Agents) may consider the following indicative list of suspicious activities.Some possible suspicious activity indicators are given below:Customer is reluctant to provide details / documents on frivolous grounds.The transaction is undertaken by one or more intermediaries to protect the identity of the beneficiary or hide their involvement.Large amount of remittances.Size and frequency of transactions is high considering the normal business of the customer.The above list is only indicative and not exhaustive.vi) APs (Indian Agents) should not put any restrictions on payment to beneficiaries where an STR has been made. Moreover, it should be ensured that employees of APs shall keep the fact of furnishing such information as strictly confidential and there is no tipping off to the customer at any level.4.14 Customer Education/Employees’ Training/Employees’ Hiringa) Customer EducationImplementation of KYC procedures requires APs (Indian Agents) to demand certain information from customers which may be of personal nature or which has hitherto never been called for. This can sometimes lead to a lot of questioning by the customer as to the motive and purpose of collecting such information. There is, therefore, a need for APs (Indian Agents) to prepare specific literature/ pamphlets, etc., so as to educate the customer of the objectives of the KYC programme. The front desk staff needs to be specially trained to handle such situations while dealing with customers.b) Employees’ TrainingAPs (Indian Agents) must have an ongoing employee training programme so that the members of the staff are adequately trained to be aware of the policies and procedures relating to prevention of money laundering, provisions of the PMLA and the need to monitor all transactions to ensure that no suspicious activity is being undertaken under the guise of remittances. Training requirements should have different focuses for frontline staff, compliance staff and staff dealing with new customers. It is crucial that all those concerned fully understand the rationale behind the KYC policies and implement them consistently. The steps to be taken when the staff come across any suspicious transactions (such as asking questions about the source of funds, checking the identification documents carefully, reporting immediately to the Principal Officer, etc.) should be carefully formulated by the APs (Indian Agents) and suitable procedure laid down. The APs (Indian Agents) should have an ongoing training programme for consistent implementation of the AML measures.c) Hiring of EmployeesIt may be appreciated that KYC norms/AML standards/CFT measures have been prescribed to ensure that criminals are not allowed to misuse the system of money transfer under MTSS. It would, therefore, be necessary that adequate screening mechanism is put in place by APs (Indian Agents) as an integral part of their recruitment/hiring process of personnel to ensure high standards.Note:- (i) The Government of India had constituted a National Money Laundering / Financing of Terror Risk Assessment Committee to assess money laundering and terror financing risks, a national AML/CFT strategy and institutional framework for AML/CFT in India. Assessment of risk of Money Laundering /Financing of Terrorism helps both the competent authorities and the regulated entities in taking necessary steps for combating ML / FT adopting a risk-based approach. This helps in judicious and efficient allocation of resources and makes the AML / CFT regime more robust. The Committee has made recommendations regarding adoption of a risk-based approach, assessment of risk and putting in place a system which would use that assessment to take steps to effectively counter ML / FT. The recommendations of the Committee have since been accepted by the Government of India and need to be implemented. Accordingly, APs (Indian Agents) should take steps to identify and assess their ML/TF risk for customers, countries and geographical areas as also for products/ services/ transactions/delivery channels, in addition to what has been prescribed in the paragraph 4 above. APs (Indian Agents) should have policies, controls and procedures, duly approved by their boards, in place to effectively manage and mitigate their risk adopting a risk-based approach as discussed above. As a corollary, APs (Indian Agents) would be required to adopt enhanced measures for products, services and customers with a medium or high risk rating. APs (Indian Agents) may design risk parameters according to their activities for risk based transaction monitoring, which will help them in their own risk assessment.(ii) The above KYC/ AML/ CFT Guidelines would also be applicable mutatis mutandis to all Sub Agents of the Indian Agents under MTSS and it will be the sole responsibility of the APs (Indian Agents) to ensure that their Sub Agents also adhere to these guidelines.Section -IICustomer Identification Procedure Features to be verified and documents that may be obtained from customersFeaturesDocuments- Legal name and any other names used(i) Passport (ii) PAN card (iii) Voter’s Identity Card (iv) Driving licence (v) Identity card (subject to the AP’s satisfaction) (vi) Letter from a recognized public authority or public servant verifying the identity and residence of the customer to the satisfaction of the AP(Indian Agent)- Correct permanent address(i) Telephone bill (ii) Bank account statement (iii) Letter from any recognized public authority (iv) Electricity bill (v) Ration card (vi) Letter from employer (subject to satisfaction of the AP).(any one of the documents, which provides customer information to the satisfaction of the AP (Indian Agent) will suffice).Note :- If the address on the document submitted for identity proof by the prospective customer is same as that declared by him/her, the document may be accepted as a valid proof of both identity and address. If the address indicated on the document submitted for identity proof differs from the current address declared by the customer, a separate proof of address should be obtained.Section-IIIList of various reports and their formatsCash Transaction Report (CTR)Electronic File Structure- CTRSuspicious Transaction Report (STR)Electronic File Structure-STRNote: FIU-IND have now advised that the 'go-live' date is October 20, 2012 and that Authorised Persons, who are Indian agents under MTSS may discontinue submission of reports in CD format after October 20, 2012, using only FINnet gateway for uploading of reports in the new XML reporting format. Any report in CD format received after October 20, 2012 will not be treated as a valid submission by FIU-IND.Annex-IIIFormat for Sub Agents of Indian Agents of MTSS1.Name of the Sub Agent2.Sub Agent Category (AD Cat-I bank/ AD Cat-II/ Other Scheduled Commercial Bank/ Full Fledged Money Changer/ Department of Posts/ Registered NBFC/ Others)3.Address of the registered/corporate/administrative office with telephone number/s, Fax number/s and e-mail id/s.4.Registered with5.Registration Number6.Details of Registration (papers to be attached as at Annex-IIIa)7.PAN Number (copy as at Annex-IIIa)8.Name/s of Banker/s and Bank Account Number/s (enclosures as at Annex-IIIa)9.Details (Name, Nationality, Residential address, Controlling interest in any other company, PAN Number) of each promoter with more than 10% equity holding10.Paid up capital in Rs. and Number of shares11.Accounts certified by which Chartered Accountant? Details (Enclosures as at Annex-IIIa)12.Whether prosecuted/ convicted for criminal/ economic offence? If yes, particulars thereof (Enclosures as at Annex-IIIa)13.Whether the Sub Agent is solvent as on date14.Details (Name, Designation, Nationality, Residential address, PAN No., Name/s of other company/ies in which the person has held any post, Details of equity shareholding in the company, if any) of Chairman/Managing Director/Director/Chief Executive Officer (Details as at Annex-IIIa)Note: With reference to point 9, ownership of the Sub Agent should be detailed up to the last layer of equity holding ending in mentioning the name of the individual/ entity that owns beneficial interest in the company.Date:Place:Signature of Chartered AccountantSignature of Managing DirectorAnnex-IIIa : List of Certified copies of Documents to be submittedCertificate of IncorporationMemorandum (up-to-date) and Articles of AssociationBoard resolution for conducting money transfer activities, submission of application and its contents including authorization of an official to make the application.Details of associates, group companies, etc.PAN Card/s of the Director/s.Bank Account details and sealed confidential reports from banks.A certificate from Chartered Accountant certifying Net Owned FundsBalance Sheet and P&L A/c statement for the last three years.Business plan for the next three years.Conduct certificate from the local police authorities.Declaration regarding past criminal cases, cases initiated/ pending against the company or its Directors by any law enforcing agencies.Photographs of the Directors and key persons.Information about the management.Shop and establishment certificate/ other municipal certificate.Annex-IVStatement showing details of quantum of remittances received through Money Transfer Service Scheme during the quarter ended __________________Name of the Indian Agent ______________________________________Name of the Overseas PrincipalTotal quantum of remittances received in US $INR equivalentNote: This statement is required to be submitted to the Regional Office concerned of the Foreign Exchange Department of the Reserve Bank and Foreign Exchange Department, Forex Markets Division, Central Office, Amar Building, Fort, Mumbai-400001 within 15 days from the close of the quarter to which it relates.Annex-VStatement of Collateral kept by Indian AgentsName of the Indian Agent __________________________Name of the Overseas PrincipalTotal quantum of remittances received during the past 6 months in US $Amount of collateral held in US $Collateral kept in various forms (Foreign Currency Deposit/ Bank Guarantee)Last review of adequacy of collateral along with observationsNote: This statement as at the end of June and December every year is required to be submitted to the Regional Office concerned of the Foreign Exchange Department of the Reserve Bank and Foreign Exchange Department, Forex Markets Division, Central Office, Amar Building, Fort, Mumbai-400001 within 15 days from the close of the half year to

Below I am sharing the current affairs for 3rd June 2020. This is one of the ways you can prepare the current affairs for UPSC.**Source: Telegram Channel: Prelims Specific Notes for IAS (these are key words to be used in the search bar of the Telegram App).****Prelims Specific Analysis: 3rd June 2020****The Hindu, PIB, IE and Others ****Index****A) Economy****1. India’s WTO envoy JS Deepak lists priorities for trade body (IE)****2. V-shaped Vs U-shaped Recoveries (TH, pg 15)****3. What are ‘Phishing’ Attacks (TH, pg 2)****4. Global Economic Prospects (GEP) June 2020 Update: World Bank (TH, pg 14)****B) Science and Technology****5. Scientists identify second most common coronavirus type in India (TH, pg 9)****6. More light on sun’s coronal heating puzzle (TH, pg 16)****7. Explained: Arsenicum album 30 (IE)****8. Explained: Can a handheld device kill virus with UV light? (IE)****C) International Relations****9. China gets set to build power project in PoK (TH, pg 14)****D) Schemes/Policies/Initiatives****10. Electronics incentive schemes launched (TH, pg 15)****E) Clever Picks (Miscellaneous)****11. India leading the major world bodies (TH, pg 6)****12. Sharp rise in deaths of young Pashmina goats (TH, pg 1)****A) Economy****1. India’s WTO envoy JS Deepak lists priorities for trade body (IE)****Context: **India’s WTO envoy JS Deepak, who has mobilised the developing countries for pursuing the developmental trade agenda in the face of powerful challenges at the WTO during his three-year tenure, charted a “way forward” based on five Indian priorities.**Analysis****First,** **“the resolution of the Appellate Body impasse” **must remain top most priority.* The Appellate Body, the highest adjudicating body for resolving global trade disputes, is an important element of the Dispute Settlement System of the World Trade Organization (WTO), hearing appeals against the findings of the panel established by the Dispute Settlement Body (DSB).* The Appellate Body (AB) ideally consists of seven members including the Chairman. But on 10th December 2019, this body went into crisis as two out of its three remaining members’ four-year terms came to an end.* The United States of America and the protectionist agenda-driven regime under President Trump is to blame for the crisis in the Dispute Settlement System (DSS) given the Appellate Body not having an adequate number of members.* The United States is blocking the appointment of new members to the Appellate Body (AB), claiming the WTO has failed to protect American interests.**Second,** “a more effective and lasting way to ensure the food security of the most vulnerable and eliminate the historic asymmetries in AMS entitlements in the Agreement on Agriculture.* The major industrialised countries such as the US, the European Union, Japan, Norway, and Switzerland among others enjoy what are called the most trade-distorting subsidies or the **AMS (aggregate measurement of support) entitlements** whereby they could continue to provide tens of billions of dollars of trade-distorting support to their farmers.* On the contrary, countries with huge populations and resource-poor farmers like India are not able to provide much support to their farmers. India is allowed to provide what is called de minimis support of up to 10 per cent of the value of the support.* Recently, India informed that it breached the 10 per cent commitment for rice and notified it under the Bali perpetual peace clause.* The developing countries led by India, Indonesia, South Africa, and China among other pressed for addressing the continued “historic asymmetries”.**Third **is the “urgent need to build the digital capacities of developing countries and LDCs (least-developed countries) in areas like digital skills and broadband infrastructure so that the benefits of the e-commerce applications like e-educaion, tele-medicine, electronic payments and use of digital platforms for sourcing goods and services are available to everyone including in developing countries and LDCs.”More important, “the requirement of new sources of revenue for developing countries including LDCs has also underlined **the need for ending the e-commerce moratorium on imposing customs duties on electronic-transmissions**.* Under the WTO Declaration on “**Global Electronic Commerce**”, services electronically transmitted should be exempted of customs duties.* Major industrialised countries and several developing countries want to make the moratorium for not imposing customs duties permanent.* India and South Africa have made strongly proposals to reconsider the moratorium on grounds that are having an adverse effect on their digital and economic development.**Fourth,** “the completion of negotiations on disciplines on fisheries subsidies with appropriate special and differential treatment for developing countries including LDCs to protect their small and subsistence fishermen.**And five**, India called for enabling “the effective use of TRIPs flexibilities to ensure access to essential medicines, treatments and vaccines to all at affordable prices, especially in the context of the Covid19 pandemic.”**2. V-shaped Vs U-shaped Recoveries (TH, pg 15)**A V-shaped recovery is characterized by a quick and sustained recovery in measures of economic performance after a sharp economic decline.* Because of the speed of economic adjustment and recovery in macroeconomic performance, a V-shaped recovery is a best-case scenario given the recession.U-shaped recoveries happen when a recession occurs and the economy does not immediately bounce back, but tumbles along the bottom for a few quarters.**3. What are ‘Phishing ‘Attacks (TH, pg 2)****Context:** The Delhi High Court asked the Centre to respond to Paytm’s plea alleging that telecom operators are not blocking those who are defrauding its customers by “phishing” activities over various mobile networks.**Analysis****So what is phishing? **Have you ever got an SOS message from a friend or a mail from your bank questioning how secure your credit card is? If you chose to ignore them, then you most probably escaped a **phishing attempt.****Phishing is the fraudulent practice of sending emails claiming to be from reputable companies to induce individuals to reveal personal information, such as passwords or credit card numbers. **Phishers are cyber criminals who siphon off vital confidential information, usually financial, from ‘susceptible' people and misuse it.**Example:** Receiving emails like a Scandinavian philanthropist ready to part with his wealth, or an African princess expecting you to be her prince charming.And it is **not always through email. **There is vishing (voice phishing) and smishing (SMS phishing) too. In any case, your personal and financial details will be the target.**Spear phishing**Spear phishing is an email that appears to be from an individual or a business familiar to you. **Spear phishers thrive on familiarity.**A fraudster may send a mail claiming he is from the RBI. The thing to remember here is that the sender's email id might be something like http://rbi.com (http://rbi.com), **but any government entity's domain name would be 'http://gov.in' or '.org' and not '.com'.****Whaling**Whaling is spear phishing targeted at an important person, such as a CEO or a senior-level employee in a firm.**Pharming**Imagine this. You get a mail from Facebook (at least that what it looks like) saying your account is compromised and you should click the link to update your credentials. You click the link, it takes you to a page that looks just like Facebook. If you have given your personal details without checking the url, you have just been 'pharmed."Just like farming where you plant seeds, **in pharming you are conned to 'voluntarily' plant your details. **The fraudster modifies the DNS entry to create a fake website and lures users to key in personal details.**A malware or spyware detector is unlikely to catch pharming** because it is carried out by poisoning the DNS at the host level while your PC remains safe.**Tabnabbing**Also spelt as tab napping, it is similar to pharming, but here **the CSS** (Cascading Style Sheets - CSS is the language for describing the presentation of Web pages, including colours, layout, and fonts) **of the real website is copied.**The inactive or dormant tab in your browser is the target.The fake website will have the same icon and description as the real one.The user, without verifying the url, spills out security details such as password.**4. Global Economic Prospects (GEP) June 2020 Update: World Bank (TH, pg 14)****Context:** The COVID-19 pandemic is expected to have “severe” short and long-term effects on economic growth, the **World Bank said in its Global Economic Prospects (GEP) June 2020 report**.**Analysis **Global Economic Prospects is a World Bank Group flagship report that examines global economic developments and prospects, with a special focus on emerging market and developing economies.It is **issued twice a year,** in January and June.* The January edition includes in-depth analyses of topical policy challenges while the June edition contains shorter analytical pieces.**Commodity Markets Outlook** is now released as its own report, also contained in this collection. The World Bank is a bank for nations, not people.**World Bank **The World Bank has two separate groups.One group, **the International Development Association**, provides loans to the world's poorest countries.The other group, **the International Bank for Reconstruction and Development,** gives loans to developing countries.**International Bank for Reconstruction and Development (IBRD)**IBRD is a global development cooperative owned by around 189 member countries.As the largest development bank in the world, it supports the World Bank Group’s mission by providing loans, guarantees, risk management products, and advisory services to middle-income and creditworthy low-income countries, as well as by coordinating responses to regional and global challenges.Created in 1944 to help Europe rebuild after World War II, IBRD joins with International Development Agency, to form the World Bank.It works closely with all institutions of the World Bank Group and the public and private sectors in developing countries to reduce poverty and build shared prosperity.**The International Development Association (IDA)**The ()**International Development Association** () is a group of 76 of the poorest World Bank Group member countries — India is not a member. ()*** *****Analysis**• The International Development Association (IDA) is the part of the World Bank that helps the world’s poorest countries.• Overseen by 173 shareholder nations, IDA aims to reduce poverty by providing **loans (called “credits”) and grants** for programs that boost **economic growth, reduce inequalities, and improve people’s living conditions.**• IDA complements the World Bank’s original lending arm—the **International Bank for Reconstruction and Development (IBRD).**o IBRD was established to function as a self-sustaining business and provides loans and advice to middle-income and credit-worthy poor countries.• IBRD and IDA share the same staff and headquarters and evaluate projects with the same rigorous standards.• IDA is one of the largest sources of assistance for the world’s 76 poorest countries and is the single largest source of donor funds for basic social services in these countries.• IDA lends money on concessional terms. This means that IDA credits have a zero or very low interest charge and repayments are stretched over 30 to 38 years, including a 5- to 10-year grace period.• **IDA also provides grants to countries at risk of debt distress.**o In addition to concessional loans and grants, IDA provides significant levels of debt relief through the **Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI).**o The HIPC Initiative was launched in 1996 by the **IMF and World Bank**, with the aim of ensuring that no poor country faces a debt burden it cannot manage.o In 2005, to help accelerate progress toward the United Nations Millennium Development Goals (MDGs), the HIPC Initiative was supplemented by the Multilateral Debt Relief Initiative (MDRI).v The MDRI allows for 100 percent relief on eligible debts by three multilateral institutions—the **IMF, the World Bank, and the African Development Fund (AfDF)—**for countries completing the HIPC Initiative process.o Low-income countries (LICs) have often struggled with large external debts.v The **IMF and the World Bank** have developed a framework to help guide countries and donors in mobilizing the financing of LICs' development needs, while reducing the chances of an excessive build-up of debt in the future.v The **Debt Sustainability Framework (DSF)** was introduced in April 2005 and is periodically reviewed.**World Bank Publications****World Development Indicators, International Debt Statistics, Migration and Development Brief, Ease of Doing Business Index** etc. are among the major publications of the World Bank.**B) Science and Technology****5. Scientists identify second most common coronavirus type in India (TH, pg 9)****Context:** The newly identified type, **that the scientists have christened A3i**, comprised 41% of those analysed in India, and may comprise 3.5% of the genomes globally.With this, there are 11 SARS-CoV-2 types identified globally, with **at least six of them identified in India.****Analysis**The** most dominant coronavirus clade in India is the A2a**, and comprises around 62% of the genomes in India.The **coronavirus type, or clade,** is a cluster of SARS-CoV-2 viruses that share evolutionary similarities.Such classifications are useful in establishing whether certain strains are particularly virulent, spread more easily, how they are likely to evolve over time and whether some could be less vulnerable to certain kinds of vaccines.Previous studies indicate that while **type O was the first ancestral family of the virus identified from China,** it’s the A2a type that has emerged dominant the world over because of a mutation in its genes that allows that coronavirus’ spike to more efficiently infiltrate the lungs.So far, there is no evidence that A3i is more virulent — that is, it’s linked to more deaths.**6. More light on sun’s coronal heating puzzle (TH, pg 16)****Context:** A group of scientists have recently discovered tiny flashes of radio light emanating from all over the sun, which they say could help in explaining the long-pending coronal heating problem.**Analysis**These radio lights or signals result from beams of electrons accelerated in the aftermath of a magnetic explosion on the sun.These observations were the strongest evidence till date that the tiny magnetic explosions, originally referred to as ‘nanoflares’, can indeed be heating up the corona (the aura of plasma that surrounds the sun and other stars).While the phenomenon of coronal heating has been known for the last 70 years, the availability of cutting-edge data from the Murchison Widefield Array (MWA) radio telescope proved to be a game-changer.* The **Murchison Widefield Array** (**MWA**) is a low-frequency radio telescope, located at the **Murchison** Radio-astronomy Observatory (MRO) in Western Australia.* The **MWA** has been developed by an international collaboration, including partners from Australia, New Zealand, Japan, China, India, Canada and the United States.The strength of the magnetic fields varies a lot from one place on the surface of the Sun to another, by more than a factor of 1,000. But the corona is hot everywhere. So, this heating process has to work all over the corona, even in regions of weak magnetic fields. Until now, the process of how this magnetic energy is deposited in the corona had remained a mystery.**The corona **Our Sun is surrounded by a jacket of gases called an atmosphere. The **corona** is the outermost part of the Sun's atmosphere.***Fig:**** Image of the solar corona during a total solar eclipse.*The corona does not have an upper limit.**The Sun's atmosphere, the corona, **is so much hotter than the surface.The **constant eruption of tiny solar flares in the solar atmosphere **is the most probable cause of this anomaly. These solar flares are so small that they are undetectable from Earth.The Sun’s corona, although hotter than its surface, is less dense and therefore emits fewer photons. Therefore, in normal times, the Sun’s surface shines so brightly that it obscures the corona.Only when there is a total solar eclipse does the solar disc get ‘occulted’ by the moon, exposing the corona to our view, albeit using instruments for photographing it.The Sun’s magnetic field lines stretch out from the surface and permeate the corona. Solar plasma wind and storms including flares and coronal mass ejections are born in coronal magnetic field.**Heliosphere **The solar wind, emanating from the Sun, creates a bubble that extends far past the orbits of the planets.This bubble is the heliosphere, shaped like a long wind sock as it moves with the Sun through interstellar space.Heliosphere is the region where the constant flow of particles from our Sun, called the solar wind, collides with material from the rest of the galaxy.This collision limits the amount of harmful cosmic radiation entering the heliosphere.**The Interstellar Mapping and Acceleration Probe (IMAP) **mission of NASA will help researchers better understand the boundary of the heliosphere.**7. Explained: Arsenicum album 30 (IE)****Context:** A homoeopathic drug, **Arsenicum album 30**, has become a subject of debate after several states recommended it for prophylactic (preventive) use against Covid-19.**Analysis**This was after the Ministry of AYUSH listed the drug among “preventive and prophylactic simple remedies” against Covid-19.The debate stems from the fact that there is no scientific evidence that the drug works against Covid-19, a fact stressed not only by medical scientists but also by some homoeopathic practitioners themselves.**The drug**Arsenicum album is made by heating arsenic with distilled water, a process repeated several times over three days.The health hazards of arsenic contamination in water are well known: long-term exposure to the metal can cause skin cancer, pulmonary and cardiovascular diseases.**8. Explained: Can a handheld device kill virus with UV light? (IE)****Context:** Can you kill the novel coronavirus with ultraviolet light?**Analysis****Ultraviolet light**In the broad spectrum of electromagnetic radiation that comes from the sun, when arranged according to wavelength, ultraviolet light comes between visible light and X-rays — that is, the wavelength of UV light is smaller than that of visible light and greater than that of X-rays.* The wavelength of ultraviolet radiation is between 10 nanometres and 400 nanometres (1 nanometre is a billionth part of a metre).Ultraviolet radiation in the 200-300 nanometre range is known to destroy the virus, making it incapable of reproducing and infecting.Ultraviolet radiation is one of two methods for sanitising and disinfecting public spaces from bacteria and viruses — the other being chemicals.Both chemicals and ultraviolet radiation are meant to disinfect public spaces only, not human skin.* As the World Health Organization points out: “Ultra-violet (UV) lamps should not be used to disinfect hands or other areas of your skin. UV radiation can cause skin irritation and damage your eyes.”**The hurdles**To disinfect areas from the coronavirus with UV radiation, one needs sources that emit sufficiently high doses of UV light.Such devices do exist, but these radiation sources are “typically an expensive mercury-containing gas discharge lamp, which requires high power, has a relatively short lifetime, and is bulky”.**C) International Relations****9. China gets set to build power project in PoK (TH, pg 14)****Context:** China under the multi-billion-dollar the China-Pakistan Economic Corridor (CPEC) will set up the 1,124- megawatt **Kohala Hydroelectric Power Project **in Pakistan-occupied Kashmir despite India’s objection to it.**Analysis**The dam is planned to be built on the **Jhelum River**, which is a branch of the Indus RiverIndia had protested Pakistan’s plans to build a dam in Gilgit-Baltistan, saying such projects in territories under Pakistan’s illegal occupation was not proper.* The Diamer-Bhasha Dam is a project that **both the World Bank and the Asian Development Bank (ADB)** have refused to touch because India objects to its location, which is in the Gilgit-Baltistan region.* China is now offering help to make **the dam (Diamer-Bhasha Dam)** which will be built on the **Indus River. ****D) Schemes/Policies/Initiatives** ()**10. Electronics incentive schemes launched (TH, pg 15)****Context:** Ministry of Telecom and IT launched three incentive schemes with a total outlay of about ₹48,000 crore to boost large-scale manufacturing of electronics in the country.**Analysis**The three schemes are —* Production Linked Incentive (outlay of nearly ₹41,000 crore),* Component Manufacturing Scheme (about ₹3,300 crore) and* Modified Electronics Manufacturing Clusters (about ₹3,800 crore).Under the **Production Linked Incentive (PLI),** which is targeted at mobile phone manufacturing and specified electronic components, the government initially plans to incentivise 10 firms — five global and five local.**E) Clever Picks (Miscellaneous)****11. India leading the major world bodies (TH, pg 6)**India is the chair of the Executive Board of the World Health Assembly (it is the decision-making body of the World Health Organization).In September, the United Nations General Assembly will discuss the theme, “The Future We Want”; in 2021, India joins the UN Security Council (non-permanent seat) and chairs the BRICS Summit, and in 2022, hosts the G-20, a rare alignment of stars for agenda-setting.**12. Sharp rise in deaths of young Pashmina goats (TH, pg 1)****Context:** The Chinese Army’s intrusion in Chumur and Demchok since January has left Ladakh’s nomadic herding **Changpa community** cut off from large parts of summer pastures.**Analysis**The People’s Liberation Army has taken over 16 kanals (two acres) of cultivable land in Chumur and advanced around 15 km inside Demchok, taking over traditional grazing pastures and cultivable lowlands.This has destabilised the movement of over 2,000 members of the nomadic community.In a cascading effect, this has resulted in a **sharp rise in deaths of young Pashmina goats **this year in the Korzok-Chumur belt of Changthang plateau in Ladakh.**Pashmina Products Receive BIS Certification**In the recent past, Bureau of Indian Standards (BIS) published an Indian Standard for identification, marking and labelling of Pashmina products to certify its purity.The Changthangi or Pashmina goat, is a special breed of goat indigenous to the high altitude regions of Ladakh in Jammu and Kashmir.They are raised for ultra-fine cashmere wool, known as Pashmina once woven.The Textiles are handspun and were first woven in Kashmir.The Changthangi goat grows a thick, warn undercoat which is the source of Kashmir Pashmina wool.These goats are generally domesticated and reared by nomadic communities called the Changpa in the Changthang region of Greater Ladakh.**Bureau of Indian Standards (BIS) **The Bureau of Indian Standards (BIS) is the national Standards Body of India working under the aegis of Ministry of Consumer Affairs, Food & Public Distribution.It is established by the Bureau of Indian Standards Act, 1986.The Minister in charge of the Ministry or Department having administrative control of the BIS is the ex-officio President of the BIS.The organisation was formerly the Indian Standards Institution (ISI).