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Role of Flag States under United Nations Convention on the Law of the Sea (UNCLOS)

By: Shubham Bhalla 

INTRODUCTION

 The development of flag states started in 1000 BC. The Egyptians used them for the first time for identity purposes. The usage of flag advancement increases in the Stone Ages for identification and in middle age, it has been used as a symbol of the nation. The Law of the Sea Convention explains the duties of Flag States on a large scale in comparison to previous conventions. In Public International Law, it is concerned within the maxim used in the North Sea Continental Shelf cases, Opinio Juris et necessitatis, refers to the psychological element representing the State that acts as they are fulfilling a legal Requirement which is obligatory for them. It also represents the establishment of an International Custom which has been sought for recognition earlier among other states, in the condition of taking certain practices obligatory.[1]

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In the early 19th Century, the ‘Lotus case’ revealed the essential for creating a new customary rule of International Law i.e Opinio Juris. In this case, it has been seen that even if the state has no jurisdiction in exercising their power over crimes committed on High Seas in respect to the Flag States then the French Government had no proof for the act, which had legal obligation over. This case has been criticized majorly for allowance of all those things which is not forbidden under International Law. Later, it has been overruled through the Geneva Convention on Law of Sea, 1958 by application of Article 11 of the convention, stated as ‘No criminal or disciplinary proceedings, except before the judicial/administrative authorities of either the flag State or of the State of which they are citizens, can be initiated against the persons responsible for the collision’.[2]

The practice of State establishes the coastal state in exercising its jurisdiction beyond the territorial jurisdiction by taking control of foreign vessels, to prevent the threat and enforce their rule of law. The example of North Sea Continental Shelf Cases is classical here which speaks about the provision of universal jurisdiction concerning the crimes of piracy. In today’s phenomenon, States are not free to see the resources of the sea, it is due to the “conservation and Co-operation” under Modern International Law. It is all related to the requirement of new legal order which combined as the balance of interests, between exploitation and conservation of the sea Law, from free seas to clean seas and from the peaceful uses and Strategic considerations to the balance between the Coastal Interests and Flag Interests.

The freedom of Sea well explained by the Jurist Lauterpacht, “Freedom of the seas’ true purpose is to ensure freedom of navigation, unhampered by exclusive claims of the seas’ true purpose is to ensure freedom of navigation, unhampered by exclusive claims of individual States, and freedom of utilization of the sea resources to a degree to which they can be equitably utilized by all”.[3]

WHAT IS ‘FLAG STATE’?

The state will be called “Flag State” where the Ship has been registered in that particular Country. It is deemed to be a Home Country for a Ship. The Flag state has the overall responsibility to ensure that the ship or vessels flying its flag in compliance with the International Treaties, Conventions, Regulations, and other Laws applicable. Here, the inspection is carried out within the issue of certificate every time, which is based on National regulations and ratified by that Flag State. So, Safety is measured by the authority. It is a planned perspective as there is the issuance of certificate after every inspection. The flag State does not maintain any threat matrix as compared to Port State under Public International Law. [4]

In the case of Naim Molvan v. Attorney General for Palestine[5], the court held that the ship sailing without the flag of any state has no right of freedom of navigation. This case put a legal regime of a vessel on the seas. The flag helps in settling the responsibility where Rights should be applicable concerning that particular vessel. The flag gets its recognition with the codification of the usage under the High seas convention and ultimately under the United Nations Convention on Law of the Sea (UNCLOS) 1982.

ROLE OF FLAG STATE 

  • ARTICLE 94- DUTIES OF FLAG STATES

Every State shall efficiently execute its power in administrative, technical, and social matters over ships flying its flag. Law of the sea convention prescribes in the second Para of Article 94, a duty of the flag State to maintain regular checks upon the seaworthiness of ships, to maintain a register of the vessel, to take measures to ensure safety at sea concerning the construction, equipment, and seaworthiness of the vessel.

To ensure that crews are qualified, to hold inquiries into shipping casualties, to effectively exercise jurisdiction and control over their Ships, the manning of ships, and labour conditions, etc.

Article 94(1) the matters on which the flag State is to exercise its duties is made precise, that is jurisdiction and control over administrative, technical, and social events. This provision, also present under the 1958 High seas convention, was added to strengthen the concept of concerning the nationality of a vessel by indicating matters over which the flag State should exercise its jurisdiction. The United Nations Convention on Conditions for Registration of Ships 1986 amplifies the objective set out.

Article 1 – It prescribes that the flag State is to apply the provisions of that convention to ensure or, as the case may be, strengthening between a State and ships, fly its flag and, to operate effectively. Its jurisdiction and control over such ships concerning identification and accountability of ship owners and operators as well as concerning administrative, technical, economic, and social events.

The reference there to economic matters has no direct counterpart in Article 94, but that has mentioned the comprehensive character of the obligations imposed on flag States generally throughout the UNCLOS, this slight widening of the purpose served by registration and of the duties of the flag State is compatible with the UNCLOS.

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  • ARTICLE 94(2) – REGISTER AND ASSUME JURISDICTION:

Flag states are required to keep a record of ships flying their flag & to allow jurisdiction under its internal laws over each vessel, its masters as well as crew in administrative, technical, and social matters concerning the ship. For this, the requirement is that the register should contain the names of the vessel and in particular, nothing further requirements were mentioned within this provision.

Article 11 of UNCLOS, on the other hand, sets out in considerable detail the information that should be in a record of a vessel.

  • ARTICLE 94(3) – CONSTRUCTION, EQUIPMENT, AND SEAWORTHINESS OF SHIPS

(b) Crew of ships, labour requirements, and the Coaching of crews taking into account the suitable international instruments;

(c) Utilisation of signals, the maintenance of communications, and the prevention of collisions.[6]

  1. Each vessel before registration is surveyed by a qualified surveyor of ships and should have proper navigational equipment as are appropriate for the safe navigation of the ship. International Maritime Organization is a very specialized agency of the United Nations which is liable for actions to promote the safety and security of international shipping and to prevent marine pollution from ships.
  2. Every vessel has a head which is a master and officers who have proper qualifications and various crew members who have proper qualifications for their work as engineers etc. Safety of Life at Sea (SOLAS), 1974 commands a universal responsibility on flag States to ensure, for the safety of life at sea, the appropriate manning of the ship.

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Standard of Training, Certification, and watchkeeping of Seafarers (STCW) 1978, as amended, contains a comprehensive set of international regulations concerning training and certification of personnel. This Convention establishes minimum requirements for training, qualifications, and seagoing service for masters and officers and certain categories of ratings, such as those forming part of a navigational watch or engine-room watch on, Oil Tanker, LPG, etc.

  1. To ensure safety at high seas means of communications are vital for accident prevention and safety. To exercise its jurisdiction the flag states must take necessary measures regarding the use of signals and maintenance of communications and prevention of collision. The Act for the prevention of collisions at sea is found in International Regulations for Preventing Collisions at Sea 1972.

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Rules on signals: Under Safety of Life at sea (1974) all vessels are required to carry radio installations.[7]

  • ARTICLE 94(5) – CONFORMITY WITH INTERNATIONAL REGULATIONS;

Similarly, with regards to article 94(3) and (4), subsection 5 stresses that flag state is required to conform to “generally accepted” international regulations, procedures, and practices and to take any steps which may be necessary to secure their observation. Internationally accepted regulations and practices are dictated by practical necessity. While each state remains free to apply its legal requirements as regards safety, there would be chaos if these requirements widely varied or were incompatible. This provision is questionable to a range because the law and procedures to be adopted are not defined. It also does not give guidance as to what legislation could be classified as “generally accepted”. Thus one could go ahead to understand it to mean rules and standards established through competent international organizations or general diplomatic conferences to bridge the reluctance of states to impose strict safety legislation due to competition in the industry. So, a nation might be compelled to standards it did not specifically adopt. Examples of particular rules, procedures, and standards include Safety of life at sea (SOLAS), The International Convention for the Prevention of Pollution from Ships (MARPOL), etc. Flag states by this article, are under obligation to take any steps necessary to ensure observance of generally accepted international regulations and procedures. Including those related to safety, marine pollution, and the maintenance of radio communication.

  • ARTICLE 94(6) UPON RECEIVING A REPORT FLAG STATE SHALL INVESTIGATE THE MATTER.

In this article, the country has the right to use its power if the flag state has not exercised proper jurisdiction and control concerning a ship flying its flag, to report its facts to flag states. Upon receiving the report the flag state is to investigate the matter and will take remedial steps if necessary. This article calls for good faith on the part of flag states; it also re-emphasises the exclusive jurisdiction of flag states over vessels flying their flag on the high sea.

  • Article 94 (7) Inquiry into every marine casualty or incident of navigation on high seas

Few flag states are consistent in investigating casualties involving ships properly registered under their flag. They also make reports which show that they are working in the field for collecting the reason for which these casualties are happening. The Marine Accident Investigation Branch is very productive and a good example compared to other organizations. This article applies to the incidents which cause casualties like loss of life or very serious injuries to nationals of different states, damages to ships, or the marine environment. In this Flag state and other states who have a dispute will cooperate and conduct such inquiry. SIMO plays a very vital role in uniting other states for smooth conducting of such inquiries and the betterment of their mutual interest.

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INDIAN SCENARIO IN RESPECT TO THE CASE, The Italian Republic v. The Republic of India[8] (Enrica Lexie Incident)

In this case, two Italian mariners working under Vessel Protection Detachment (VPD) posted on Enrica Lexie, an Italian commercial vessel, shot two Indian Fishermen mistaking them to be pirates in contiguous waters (20.5 nautical miles off the coast of Kerala). Thereafter, the Indian navy and coastguards detained the two Italian marines.

The Permanent Court of Arbitration (hereinafter referred to as PCA) held that Italy was guilty of violating India’s freedom and right of navigation under the United Nations Convention for the Law of the Sea (UNCLOS) Article 87 (1) (a) and 90. India and Italy had concurrent jurisdiction over the incident and a valid legal basis to institute criminal proceedings against the mariners; however, their immunity as state officials acts as an exception to the jurisdiction. The mariners will now be tried in Italy and given a sentence according to their domestic laws.

COMMENTS:

While delivering the judgment, the PCA did not acknowledge the presence of natural rights of a person which cannot be violated in furtherance of official duty. Furthermore, the case has established a dangerous precedent where it will be difficult for India to protect its innocent unarmed citizens from such acts done without provocation in the future.

[1] Dr. Ashok k. Jain, PUBLIC INTERNATIONAL LAW & HUMAN RIGHTS [LAW OF PEACE], (Third Edition 2010).

 

[2] S.S. Lotus Case (1927) PCIJ, Series A No. 10.

[3] SUPRA NOTE 1.

[4] Dr. ASHOK K. JAIN, PUBLIC INTERNATIONAL LAW & HUMAN RIGHTS [LAW OF PEACE], Third Edition 2010.

[5] 81 Ll L Rep 277.

[6] Mafia.org. (2020). Article 94. Duties of the flag State. [online] Available at: https://maifa.org/resolution/resolutions/UNCLOS%2094.htm [Accessed 15 Dec. 2020].

 

[7] Nordquist, Volume III, United Nations Convention on the Law of the Sea, a Commentary at 149.

[8] (2013) 4 SCC 721.

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Copyright Licensing Agreement and the Clauses Covered Under It- An Analysis

By: Darshi Sanghvi

What is copyright licensing?

In India, copyright is known by and large as an ownership right offered by law to creators, for instance, of artistic work, cinematography, literature and sound recordings. In other words, it is a protection provided to creators of work in the form of an acknowledgement for their intellectual contribution. The primary objective of any copyright is to protect the interest of the creator, besides the dissemination of knowledge that is carried out. An often undiscovered fact is amidst other benefits; economic rights also enable a creator to reap economic benefits from his intellectual creations. As per the Copyright Act of 1957, there are different rights in place, pertaining to the nature of the work undertaken. It is further pertinent to note that it is the exclusive right of the owner to do or authorise doing any of the acts covered thereon.[1]

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The copyright framework permits not only the communication of work, but also its reproduction, translation and adaption. Thus, the owner of the copyright work is given the opportunity of generating wealth not just by exploiting it himself, but also by sharing it with the public at large for mutual benefits. This is where copyright assignment and licensing come into play.  A distinction may be drawn between licensing and assignment, in terms of the fact that through licensing, the licensee is granted rights on the basis of certain conditions, however their ownership is not vested in the licensee. On the other hand, in an assignment, the assignee is regarded as the owner of the interest assigned to him.

Through copyright licensing, the licensor grants a license to the licensee, thereby authorising the use of the said copyright by such a licensee. The licensee is thus provided with the adequate protection and spared from the claim of infringement unauthorised use that may be made by the licensor otherwise.

Furthermore, the term ‘Exclusive License’ is elaborated in the Copyright Act to comprise of licenses that confer, on the licensee or any other person duly authorised by him, any right pertaining to the copyright of the work, excluding all the other persons.[2]

In exchange of a consideration, a copyright owner may choose to transfer some or all of his rights to others for the purpose of seeking monetary benefits. A license may either be said to be exclusive, or non-exclusive.[3]

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What is a copyright licensing agreement?

In order to initiate licensing, a copyright owner enters into a contract, widely known as the Copyright Licensing Agreement. Through such a contract, the copyright owners permit another individual or organization to use their work in several ways, for instance:

  • For reprinting
  • For distribution
  • For using it over a specified period of time[4]

In a nutshell, it is an agreement that throws light on how, why, when and where a copyrighted work can be capable of being used.

Types of copyright licensing agreements

  • Voluntary License – The author, also known as the Copyright owner, is said to have exclusive rights with regard to his creative work and has the sole right to grant license in that respect. The Copyright Act 1957[5] provides that the owner of the copyright may grant the interest in his copyright through a license in writing, which must be signed by him or an agent duly authorised by him to do so. Such a license can be granted with respect to existing as well as future work. A voluntary license may be exclusive, non-exclusive, sole or implied.
  • Compulsory License[6]– As a part of the Berne Convention[7], India has taken a step towards the incorporation of a compulsory license under the Copyright Act 1957. The term “compulsory license” is used to mean a statutory license that provides an exclusive right to do an act without the prior permission of the copyright owner/ author. Section 31 covers the compulsory licensing of copyrighted work that is withheld from the public.

Important clauses to be included in Copyright Licensing Agreements

An agreement begins by stating the date and place of its execution and further proceeds towards identifying the contracting parties. This lays the foundation for the following clauses that are particular to the property or rights that are granted.

  • Recitals: This clause is considered essential for any form of agreement as it is used to provide a gist about the contracting parties. This clause sets forth the relationship of the parties up to the stage before which the agreement came into being. A well-drafted recital plays its part in clearly expounding the context of the agreement to any reader, thus enabling a person unknown to the agreement to comprehend it better. Nevertheless, it also clarifies the fact that the binding clauses of the agreement are to be included in the coming clauses and not the recital itself.
  • Definition: This clause is equivalent to a dictionary for the purpose of the agreement. It elucidates all the terms of immense importance to the agreement, which play an important role in determining the rights and obligations of the parties. Definitions can additionally be used for the purpose of restricting the scope of the agreement. A precise description of the terms like “licensed patents”, “use”, “royalty”, “revenue” etc. can be found within this clause.
  • Rights Grant/ Grant of license: This clause plays a significant role in enabling the parties to understand the extent to which the license extends. The Rights Grant clause irons out the significance of the rights granted by the Licensor to the Licensee. The said clause states several points like the “Exclusivity of the license”, “right to use”, “restrictions on use” and “limitations- geographical and political”. Most importantly, it acts as a guide by specifying “who gets what”. The clause clarifies that the Artist retains his right to reproduce his work and that the license remains with the artist and does not affect the ownership of the copyrighted work.
  • Indemnification: In the event of any litigation risk or loss arising on one party as a result of the act of another or due to the existence of any defect in the license granted or the ownership of the copyright, it is essential to discuss the specifics of who will be indemnified and who will be the indemnifier if such a risk comes true. In other words, this clause provides the right to the party suffering due to the act of another party to call upon him to indemnify the suffering party for any loss that may have incurred.
  • Consideration: Consideration forms an essential part of any contract, unless it is expressly mentioned otherwise. The consideration clause of a license agreement cites the amount of consideration that a licensee is required to pay to the licensor, in the form of royalties. The clause further sets out the method by which such royalties are to be calculated. According to most of the agreements, the royalties paid are based on the profit made by the licensee by exploiting the license. Besides such a royalty, the licensor is also entitled to demand a fixed license fee to be paid, which can be taken separately from the royalty. Both, the fee and the royalty depend on a number of factors, for instance, the use of work, the Artist’s reputation, the scope of the license, so on and so forth. The licensor also possesses the right to formulate a condition obligating the licensee to keep track of the sales made by him and to show the licensor such audit reports that shall be prepared by him.
  • Obligations of the Parties: Every party contracting under a license agreement has certain obligations towards each other which differ and are over and above the aforementioned clauses. These obligations involve making disclosures with respect to the information which is required to be known by both the licensor and licensee; in case the grant is of an exclusive license then the licensor agrees not to exploit the exclusivity granted to him thereunder; and may also contain a clause that obligates the licensee to exploit the copyrighted property in a manner that enables him to make the most of the license granted to him, much more so in case of exclusive license which exclusively grants him the license to exploit particular copyrighted work.

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  • Alterations and modifications: Alterations or modifications of any sort that may be made by the licensee must first be granted under the rights grant clause. If, upon granting any such right, modifications are made in the work, then the licensor might demand to be the owner of such property post the requisite improvement and shall then assign such improved property under another license with identical conditions as the previous agreement. Under certain circumstances, the licensee might seek to retain the ownership of the improved property, and then the licensor might obtain a license from the licensee for the purpose of including the modified part in his original work.
  • Term and termination: This clause lays down the period for which a license is granted to the licensee, the focus being on the date when it comes into force and the date on which it ceases to exist. Such a license possesses the scope of being renewed from time to time, subject to the conditions as specified under the agreement or at the will of parties. Term of the license is finalised by the concerned parties bearing in mind their respective benefits. Termination of an agreement is by and large based on two factors: at convenience and for cause. More often than not, parties don’t prefer granting the opposite party a right to terminate the contract at convenience as it may lead to a loss to the other party who might have invested a huge amount of money with a view of exploiting the licensee or the granted rights. One party is entitled to immediately terminate the agreement, if the other party does an act that is considered as a breach of any term of the agreement. This clause also puts out the consequences of termination of the license for any reason whatsoever. Nevertheless, in case of termination of the agreement at convenience, the party bringing about the termination of the agreement can, under obligation, be compelled to give a prior notice of certain period before such termination is implemented.
  • Dispute Resolution: In case of any dispute arising between the parties with regard to any breach of the agreement or any other reason pertaining to the license. Majority of the agreements elucidate the process to be followed in case of a conflict. The form of dispute resolution that must be opted for, can be decided at the discretion of the parties, which can be chosen from normal litigation, arbitration, mediation, and conciliation. The parties are at their will to decide the manner of dispute resolution and the law governing them.[8]

This is a non-exhaustive list of clauses essential to the agreement entered into between a copyright owner and the person seeking rights to reproduce or perform that copyrighted work. Copyright license agreement should be drafted, bearing in mind the protection of the rights of the Licensor as well as the Licensee. Furthermore, each clause must stipulate the rights, obligations, and limitations expressly, such that any future misunderstandings and misconceptions can be avoided on the part of the parties.

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[1] Section 14 of Copyright Act 1957

[2] Section 2(j) of Copyright Act 1957

[3] https://ssrana.in/ip-laws/copyright-law-india/copyright-licensing-in-india/

[4] https://vakilsearch.com/advice/copyrights-in-india-how-to-assign-and-license-a-copyright/

[5] Section 30 of Copyright Act 1957

[6] Section 31 of Copyright Act 1957

[7] Article 9(2) of Berne Convention

[8] https://www.gspkendra.com/2018/12/27/most-important-clauses-in-a-copyright-licensing-agreement

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Analysis of Banking and Investment Laws in USA, UK and UAE

By: Manas Maheshwari 

Introduction

Banks are the most important element of the Financial System of any country. The Economic Development Indicator depends on the efficacy and efficiency of the banking system prevailing in that particular country. The core function of Bank is to accept deposits and lend money thereby acting as an intermediary between depositors and borrowers. The income of  Bank is difference between rate of interest charged to the borrowers and the rate of interest paid to the depositors. This is the traditional function of Banks. In modern times like now, Banks including Non-Banking Financial Companies (NBFCs) perform various other value added services to its customers like foreign exchange transactions, providing distinct types of loans other than business loans such as car loans, home loans, education loans etc. , advisory and consultancy services, hire purchase financing, insurance services and many more. The Banking is not limited to the Commercial Banking operations alone. It has widened its limits and has reached the stage where the Investment Bank’s role in the economic development has come into play. The Investment Bank performs dual functions like acting as an underwriter, book manager to the issue, merchant banker, registrar in primary securities market from side of the corporate issuer. The Investment Bank also advises the clients mainly, Institutional Investors about the Buy and Sell side functions. The role of Foreign Direct Investment (FDI) also comes into play when the commercial operations has been globalized and particularly when the capital is not at abundance.

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Analysis of Banking and Investment Laws in UAE

As per the Doing Business Report 2020[1] published by the World Bank, the United Arab Emirates is ranked 16th out of 190 countries. This shows that UAE is gradually becoming  business and financial centric attracting a host of global banks corporate to set up their operations.

Currently, there are three types of Banks operating within UAE. These are:

  1. Commercial Banks;
  2. Islamic Banks and
  3. Foreign Banks.

The Islamic Banks are regulated by the Shariah principles as opposed to the commercial banks leading to many operational differences between the two. The popular banks currently operating in UAE are Emirates NBD, National Bank of Abu Dhabi, Abu Dhabi Commercial Bank, First Gulf Bank and Dubai Islamic Bank.

The UAE Central Bank is the primary regulator for Banking and Financial Services in UAE. Apart from Central Bank, there are various other regulatory bodies namely:

  1. The Insurance Authority (“IA”);
  2. The Securities and Commodities Authority (“SCA”);
  3. Dubai Financial Services Authority (“DFSA”) and
  4. Abu Dhabi Global Market (“ADGM”).

The Regulatory authorities functioning within the federal level are the Central Bank, IA and SCA and those functioning within the emirate level are DFSA (operates within the Dubai International Financial Centre) and ADGM (operating within Abu Dhabi).

The Federal Law No. 10 of 1980[2] governs the Central Bank, the Monetary System and Organization of Banking. The Islamic Banks, Financial Institutions and Investment Companies are governed by Federal Law No. 6 of 1985[3]. The Decretal Federal Law No. 14 of 2018[4] covers the subject of Central Banks and Organization of Financial Institution and their activities. The SCA is governed by Federal Law No. 4 of 2000[5] and issues regulations from time to time which the companies operating in the securities market has to comply with. The IA regulates the Insurance sector in UAE in accordance with Federal Law No. 6 of 2007[6].

The DIFC, being an international Financial hub offers very vibrant environment w.r.t Commercial Banking and Investment Banking services. The laws related to this area of business are:

  1. Companies Law[7];
  2. Electronic Transactions Law[8];
  3. Insolvency Law[9] and
  4. Law of Security[10].

The Financial Collateral Regulations[11], Insolvency Insurers Regulations[12], Security Regulations[13] and Investment Companies Regulations[14] has been amended from time to time by DIFC.

The Central Bank of UAE issues licenses to foreign banks for operating in UAE as per the law that governs the domestic bank licensing. The Investment Banks cannot accept deposits whose maturity period is less than two years with some exceptions and these banks are licensed as per the relevant law[15]. The Islamic Banks can carry all types of Banking, Financial and Investment services and operations as per the relevant federal law.

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Only authorized Institutions and Companies incorporated as per the Commercial Companies Law are licensed to act as moneychangers[16]. In respect of Financial Intermediaries involved in sale and purchase of stocks and bonds and in money market transactions, only UAE citizen in respect of natural person can act as an intermediary[17]. The responsibility for licensing brokers and intermediaries fall upon SCA in respect of shares and Central Bank in case of currency and commodities.

The Investment Companies as per the resolution[18] adopted by Board of Directors of Central Bank is involved in following businesses:

  1. Managing Portfolios;
  2. Preparing Allotment;
  3. Managing Investment Trust funds and
  4. Acting as a Trustee for managing funds on behalf of Beneficiary.

The Finance Companies undertake the following activities according to the resolution[19] adopted:

  1. Loans and Advances;
  2. Issuing credit guarantee and
  3. Issue of securities such as stocks, bonds, debt etc.

The Laws and Regulations governing Foreign Exchange are:

  1. Anti-Money laundering legislation[20] by Central Bank (To Register Hawala Providers);
  2. Anti-Money Laundering/Anti-Terrorist Financing Regulations[21] by DIFC and
  3. Anti-Money Laundering and Combating the Financing of Terrorism[22] by DMCC.

In the midst of Covid-19 pandemic, the Central Bank of UAE have taken various measures relating to rescheduling loan payments, reducing charges for customers, deferring loan installments, encouraging customers to adopt digital banking services, to boost lending capacity of banks and to provide temporary relief to private sector and retail customers affected by Covid-19 pandemic and directed all banks to carry out sanitization of ATMs on regular basis[23].

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Analysis of Banking and Investment Laws of UK

As per the Doing Business Report 2020[24] published by World Bank, United Kingdom is ranked 8th out of 190 countries. This establishes the fact that UK Laws and Regulations are business friendly.

Most of the UK laws partakes its character from European laws and regulations. The Primary framework for regulating Banking, Financial Services and Insurance sector in UK is Financial Services and Markets Act 2000[25] (“FSMA”). Apart from this, there are various domestic rules and regulations derived from secondary sources.

The principal regulators for Banks are:

  1. Bank of England (“BOE”);
  2. Prudential Regulation Authority (“PRA”), a division of BOE and
  3. Financial Conduct Authority (“FCA”).

The BOE performs a statutory duty exercising its powers in the matter of resolution of Banks if a Bank is declared insolvent. The Financial Policy Committee (“FPC”) of BOE performs macro-supervision over Banking and Financial Sector. The Payments System is regulated by a Payment Systems Regulator and the issuance of Electronic Money is regulated by FCA.

The Primary function of PRA is to supervise the Banking and Insurance Companies[26]. The PRA also ensures proper mechanism of infrastructure in place for performing Banking related functions. It develops strategies in cooperation with the Companies to counter the crisis like situations. The PRA helps in ensuring a sound financial system is in place.

Till 2013, the Financial Services Authority (“FSA”) was the principal regulator for Banking and Financial Services industry. After 2013, the responsibility was divided between PRA and FCA.

The PRA and FCA are different entities working together and having a common aim. The FCA is responsible for ensuring fairness in the Financial Markets. It helps in ensuring a fair outcome for the consumers. The primary objectives[27] of FCA are:

  1. To protect the consumers;
  2. To protect the Financial Markets;
  3. To promote competition and
  4. To work in coordination with consumer groups, trade associations, professional bodies and other stakeholders.

The FCA is an independent public body and the main source of its income is the fees which it charges from its customers. The FCA is accountable to the Parliament and Treasury.

The activities that are regulated under the Banking and Financial sector are incorporated in the Financial and Markets Act (Regulated Activities) Order 2001[28] (“RAO”). Regulated Activities covers the following aspects:

  1. Accepting Deposits;
  2. Securities and Derivatives Business;
  3. Transactions in Investments;
  4. Insurance Activities;
  5. Mortgage Contracts and
  6. Consumer Credit.

In the wake of the global financial crisis in 2008, the UK economy went into a sharp recession. This was the time when the concept of Bank Ring-Fencing was developed. Under this concept, the retail banking services of the Bank were separated from the other services that the Bank offered and were prioritized. The Bank Ring Fencing helps in protecting the consumer banking services from the unexpected events which leads to global financial crisis like situations.

The Financial Services Compensation Scheme (“FSCS”) is a deposit insurance scheme which protects the consumers of the firms in financial sector that have failed.

The Consumer credit in UK is mainly regulated by Consumer Credit Act, 1974[29]. The Act regulates the following aspects:

  1. Credit card purchases;
  2. Credit agreements and
  3. Credit advertising.

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The Banking Resolution aspect is incorporated in the Banking Act 2009[30]. The Bank of England is the UK’s Banking Resolution Authority. The Resolution regime is governed by the Bank of England’s approach to Resolution. This Resolution regime does not apply to the credit unions. The depositors of credit unions are paid out by FSCS up to a maximum limit of 85,000 pounds per credit union[31].

Due to Covid-19 pandemic, the FCA has also reviewed the disaster recovery plans in order to ensure that all the regulations have been complied with[32]. The UK’s exit from the European Union will also have a substantial impact on the Banking and Financial Sector.

Analysis of Banking and Investment Laws in USA

USA has a dual banking system put in place. Both the Federal Banks and State-Chartered Banks are operating in USA. The following categories of Banks are operating in USA:

  1. National Banks;
  2. State-Member Banks;
  3. State non-member Banks;
  4. Foreign Banks;
  5. Private banks;
  6. Industrial Banks and
  7. Trust Companies.

The Banks are required to obtain a charter before accepting deposits and continuing business[33].

The Primary Regulatory Authority for keeping a regulatory oversight over the Banking operation in US is the Federal Reserve System (“Fed”). The Federal Reserve System, being the Central Bank of USA is the primary supervisory authority over Bank Holding Companies, Financial Holding Companies, State Chartered Banks, Savings and Loan Holding Companies. The Federal Reserve is equipped with the following powers:

  1. Remove officers of Banking Companies;
  2. Imposing penalty and fines;
  3. Revoking Bank membership and
  4. Terminating activities of Banks.

The main functions[34] performed by Fed are:

  1. Formulate monetary policy;
  2. Stabilizing the financial system;
  3. Administering the payment and settlement system and
  4. Promoting the consumer awareness and community development.

Besides the Federal Reserve, other regulatory bodies operating in USA are:

The Office of the Comptroller of the Currency (“OCC”): The OCC[35] is the primary supervisory authority having oversight over National Banks, Saving Banks and Foreign Banks having branches at federal level. The OCC is an independent unit of the Department of Treasury. It helps in ensuring that the Banks are accountable to customers and comply with the relevant laws and regulations.

The Federal Deposit Insurance Corporation[36] (“FDIC”): It is an independent agency created to instill the confidence among the general public in the financial system. It insures deposits and supervises the state-chartered Banks. The responsibility of FDIC also lies in administering the deposit insurance fund and managing receiverships.

State Banking Agencies: The State Banking Agencies are responsible for supervising the banks operating at state level. The functions of this agency varies from state to state. Some common functions performed by these agencies are:

  1. Issuing Bank charters;
  2. Conducting examinations at Bank and
  3. Enforcing regulations and levying fines.

Some other important regulators[37] for Banking and Financial oversight are:

  1. Financial Crimes Enforcement Network;
  2. Federal Trade Commission and
  3. Consumer Financial Protection Bureau.

The Securities and Exchange Commission (“SEC”) is the primary regulator of Securities Market in USA. The primary objective of SEC is to protect the investors, develop efficiency in the securities market and to address investor grievances.

The derivative market in USA is regulated by Commodity Futures Trading Corporation (“CFTC”). The National Association of Insurance Commissioners (“NAIC”) is a regulatory organization governed by chief insurance regulators of the respective states. The Insurance Laws are enacted by the respective state legislature under which insurance regulators operate. The legislations related to Banking in USA are:

National Bank Act of 1864[38]: This act performs the functions relating to establishing national banks, creating uniform national currency and establishing OCC.

Federal Reserve Act of 1913[39]: This act established the Federal Reserve System as the Central Bank of USA. The act sets out the framework for the operation of Fed and ensuring stable monetary and financial system.

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Federal Credit Union Act[40]: This act establishes the National Credit Union Administration for governing the credit unions.

Federal Deposit Insurance Act[41]: This act establishes the Federal Deposit Insurance Corporation which will insure the deposits of all banks and saving associations. The FDIC is the primary regulator for state non-member banks.

Bank Holding Company Act of 1956[42]: This act gives enhanced powers to Federal Reserve by regulating the Bank Holding Companies.

International Banking Act of 1978[43]: This act brings foreign banks at par with the domestic Banks w.r.t regulations, capital requirements etc.

The Gramm-Leach-Bliley Act[44] was adopted in 1999 for providing affiliation of Banks, securities firms and for safeguarding the personal sensitive data of the customers.

The Dodd-Frank act[45] of 2010 is a comprehensive set of regulations governing financial services borne out of great recession of 2008. The Act performs following functions[46]:

  1. Protecting consumers against any abusive lending and mortgages by Banks;
  2. Overseeing non-banking hedge funds;
  3. Establishing financial stability oversight council;
  4. Orderly shutdown of Banks if it becomes insolvent and
  5. Creating Volcker’s Rule which prohibits banks from owning hedge funds for their own purpose.

Besides these important acts some other important acts such as Bank Secrecy Act[47], Patriot Act[48] etc.

According to Doing Business Report 2020[49] published by World Bank Group, the United States of America is ranked 6th out of 190 countries. The Banking and Investment related laws in USA are quite business friendly and amended from time to time in response to the latest developments.

 

[1] The World Bank, Ease of Doing Business Rankings, Link.

[2] Union Law No. (10) of 1980.

[3] Federal Law No. (6) of 1985.

[4] Decretal Federal Law No. (14) of 2018.

[5] Federal Law No. (4) of 2000.

[6] Federal Law No. (6) of 2007.

[7] DIFC Law No. 5 of 2018.

[8] DIFC Law No. 2 of 2017.

[9] DIFC Law No. 1 of 2019.

[10] DIFC Law No. 8 of 2005.

[11] DIFC Financial Collateral Regulations, November 01, 2019.

[12] DIFC Insolvency (Insurers) Regulations, September 29, 2008.

[13] DIFC Securities Regulations, November 01, 2019.

[14] DIFC Investment Companies Regulations, November 12, 2018.

[15] UAE Central Bank, Banking, Link.

[16] UAE Central Bank, Banking, Link.

[17] UAE Central Bank, Banking, Link.

[18] Resolution No. 164/8/94 dated 18 April 1995.

[19] Resolution No. 58/3/96 dated 14 April 1996 and Resolution No. 165/06/2004 dated 6 December 2004.

[20] Central Bank of UAE, Anti-Money laundering legislation,  Link.

[21] DIFC Non-Financial Anti Money Laundering/Anti-Terrorist Financing (AML/CFT) Regulations, Link.

[22] DMCC Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Policy and Process, Link.

[23] Mazen Boustany and Samar Safar Aly, Guidance for Financial Services Industry in the UAE, April 01, 2020, Link.

[24] The World Bank, Ease of Doing Business Rankings, Link.

[25] 2000 c 8.

[26] Bank of England, What is the Prudential Regulation Authority?, Link.

[27] Financial Conduct Authority, About the FCA, Link.

[28] 2001 No. 544.

[29] 1974 c 39.

[30] 2009 c 1.

[31] Financial Services Compensation Scheme, About us, Link.

[32] Mazen Boustany and Samar Safar Aly, Guidance for Financial Services Industry in the UAE, April 01, 2020, Link.

[33] Baker McKenzie, Global Financial Services Regulatory Guide, Link.

[34] Federal Reserve System, About the Fed, Link.

[35] Office of Comptroller of Currency, Who We Are, Link.

[36] Federal Deposit Insurance Scheme, About Us, Link.

[37] Baker McKenzie, Global Financial Services Regulatory Guide, Link

[38] 12 U.S. Code § 38.

[39] Pub. L. 63-43.

[40] 12 USC § 1751 et al.

[41] Pub. L. 81-797.

[42] 70 Stat. 133.

[43] 92 Stat. 607.

[44] 113 Stat. 1338.

[45] 124 Stat. 1376-2223.

[46] Mark Koba, Dodd-Frank Act: CNBC Explains, Link.

[47] 84 Stat. 1114-2.

[48] 115 Stat. 272.

[49] The World Bank, Ease of Doing Business Rankings, Link.

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E- Sports Player Contracts and the Clauses Covered Under It

By: Manohar Samal

  1. Introduction 

Electronic sports (e- sports) involves playing computer or other games for profit where fans view the gaming and place wagers depending upon the skills of the players indulged in such games.[1] Not only wagers but, e- sports generate revenues through live streaming of players as well.[2] Reportedly, 380 million people worldwide were indulged in watching some or other form of e- sports making it a billion dollar industry.[3] The growth and evolution of e- sports into a money- making industry has resulted in exploration of new possibilities in the legal field such as its operation with legal endorsements, intellectual property and contracts.[4]

Contract law plays an extremely central role in e- sports and contracts for teams, players, tournament leaders and leagues should be well- drafted in place. This is mainly because during the initial years of e- sports turning into a profitable industry, exploitation and late payment of consideration were common occurrences.[5] One of the most vital contracts in e- sports is the endorsement contract as many players have faced difficulties in such forms of contracts in the past.[6]

Albeit the fact that the e- sports sector has colossally grown within the past decade worldwide and in India, the regulatory system seems to be lackadaisical in this field.[7] India does not have any law on regulating e- sports and only a Private Member Bill titled Sports (Online Gaming and Prevention of Fraud) Bill has been introduced before the Lok Sabha till date.[8]

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  1. E- Sports Player Contracts and the Clauses Covered Under It 

Traditional sports have well- regulated systems with contractual stability.[9] However, the same thing cannot be said about e- sports. Since there is no principal legislation or effective regulation, contract based relationships govern the entire e- sports industry.[10] Therefore, it would not be wrong to infer that contract law plays a pivotal and colossal role in the e- sports industry. Due to the various difficulties faced by players in the past, it is important that certain contract clauses work in their favor and towards the interest of the e- sports game at large. This would naturally mean that e- sports player contracts will have to contain some indispensable content and clauses and these clauses have been enlisted below:[11]

  1. Definitions Clause- The definitions clause is an indispensable clause in any contract. This would also include e- sports player contracts since a definition clause helps in explaining the exact meaning of the terminology or nomenclature used in the contract which can result in reduced risk of future litigation in interpretation related matters as all ambiguities are eliminated after looking at the definitions clause.
  2. Player Services Clause- All the services which are going to be provided by the player have to be clearly specified in the e- sports player contract. This would include all services provided by the player in addition to participating and playing in competitions, leagues or tournaments such as social media promotion and creation and promotion of video content (vlogging). This clause would also have to cover the hours of engagement which is agreed upon by the player and the respective contractor.
  3. Player Obligations Clause- E- sports player contract needs to contain an exhaustive list of obligations which the player is expected to carry out. This would include details in respect of tournaments which the player will participate in, the teams which will accompany and instruct the player, the amount of promotion required to be done by the player in sponsor events, the apparel and accessories to be worn by the player and the hours of training in which the player is expected to indulge. The player obligations clause is pivotal because it results in clear indication of the players obligations preventing any form of exploitation.
  4. Player Restrictions Clause- The player restrictions clause is responsible for explicating the restrictions and limitations which the player has to adhere to. This clause includes factors and concomitants such as restriction from playing in tournaments without the team or the contractor’s permission, restriction to promote competitors’ or their sponsors and for specifying a code of conduct for players to observe during the tenure of the contract.
  5. Non- Disparagement Clause- A non- disparagement clause offers protection to teams and sponsors from defamatory remarks made by a player and is an indispensable part of an e- sports player contract.
  6. Remuneration and Allowances Clause- Details of the remuneration paid or going to be paid to the player has to be specified under this clause. Moreover, all benefits, allowances and bonuses arising in the course of the contract will also have to be specified under this clause.

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  1. Image Rights Clause- This clause covers a unique aspect known as image rights. An image right is the right associated with the player due to his or her skills which a team or the contractor can use during the course of contract.[12] Such image rights include name, appearance, voice, in- game avatar or gamer tag. This clause is paramount since it could lead to the player being additionally compensated or paid for allowing exploitation and utilisation of his or her image rights.
  2. Equipment Clause- The equipment going to be supplied, types and forms, restrictions and permissions to use and similar connected matters have to be covered under the equipment clause. This is mainly because the equipment has a great role to play in the player’s success while participating in a tournament or league or competition.
  3. Revenue Sharing Clause- The revenue sharing clauses contains facts about the amount of extra revenue which will be shared with the players from the sale of merchandise, sale of in- game items, revenue generated out of streaming and prize money earned. Since revenue sharing from additional sources has been a controversy leading to litigation and conflict amongst the team and the players, it is vital that this clause is drafted properly where clear specifications about percentage of revenue sharing is stipulated.
  4. Roster Management Clause- Roster management clause is a key clause in an e- sports player contract. This is mainly because roster management strategy of the team can directly affect a player’s career. Roster management is a process which involves strategising the use of player resources by the team.[13] Therefore, it would contain information such as players going to initiate playing during the tournament, league or competition and the number of substitute players. The time duration after which each substitute will be allowed to play is also covered under the roster management clause of an e- sports player contract.

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  1. Termination and Renewal Clause– The termination and renewal clause is an indispensable clause in an e- sports player contract. This clause contains aspects of compensation in case pre- termination of contract takes place and quantification of value of the remaining contract period of a player in proportion to the investments made by the contractor in such player. Post- termination obligations and duties are also covered under this clause such as deletion of data, return of equipment and non- disparagement. Non- compete and non- acceptance of any other team or contractor’s offer is also covered under this clause. Renewal related aspects are also covered under this clause. This is an important clause to keep the player’s conduct in check and also helps the player in understanding his or her restrictions. Such clauses are also known as buyout clauses.[14]
  2. Loans Clause- Unlike the common meaning assigned to the term “loan”, in an e- sports contract, loans are not even remotely related to bank loans and instead refer to loaning of members to other teams. It may arise that teams may enter into arrangements for exchange and loaning of players. This is why it is important that the loans clause is drafted properly so that any form of legal dispute between teams does not arise. The loans clause contains information such as the duration of loans, functions to be performed by the loaned player, restrictions and permissions to the loanee team and other assignment details.
  3. Governing Law and Disputes Resolution Clause- The governing law and disputes resolution clause affirms the jurisdiction whose law will govern the contract[15] and the court, tribunal or forum which will be preferred in case any sort of dispute arises between the team, sponsors or players. The location of such preferred court, tribunal or forum is also specified under the governing law and disputes resolution clause.
  1. Confidentiality Clause- The confidentiality clause is a pivotal clause in any contract. Similarly, confidentiality clauses have significance in e- sports player contracts as well. This is because aspects such as team plans, resources and strategy are delicate information which could lead to the success or loss of teams in e- sports. Therefore, it is important to protect it through a confidentiality or non- disclosure clause. The scope of confidentiality, permissible disclosure and related aspects are covered under the confidentiality clause of an e- sports player contract.

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  1. Conclusion

 Hence, the above discussions pristinely explicate the role of an e- sports player contract in the smooth conduct and success of e- sports games along with showcasing the clauses which are covered under such forms of contract.

[1] USC Gould School of Law. “eSPorts Law Growth”. USC Gould Online Blog. (2020). [online]. [last accessed on 15 August 2020]. Available from: <https://onlinellm.usc.edu/blog/esports-law-growth/>.

[2] Willingham, AJ. “What is eSports? A Look at an Expensive Billion Dollar Industry”. CNN Edition. (27 August 2018). [online]. [last accessed on 15 August 2020]. Available from: <https://edition.cnn.com/2018/08/27/us/esports-what-is-video-game-professional-league-madden-trnd/index.html>.

[3] Ibid.

[4] Ibid 1.

[5] Ibid 1.

[6] Ibid 1.

[7] Verma, Bhumesh and Srivastava Stuti. “Regulating E- Sports- An Opportunity and a Challenge”. RGNUL Student Research Review. (05 July 2019). [online]. [last accessed on 15 August 2020]. Available from: <http://rsrr.in/2019/07/05/regulating-e-sports-an-opportunity-and-a-challenge/>.

[8] Ibid.

[9] Rastogi, Anirudh and Ranjit, Vishakh. “E- Sports Player Contracts: Common Clauses and Potential Legal Issues in India”. Mondaq. (18 June 2020). [online]. [last accessed on 15 August 2020]. Available from: <https://www.mondaq.com/india/gaming/955392/e-sports-player-contracts-common-clauses-and-potential-legal-issues-in-india>.

[10] Ibid.

[11] Ibid.

[12] Vrey, Rogier and Wilms, Tim. “eSports and Image Rights”. CMS Law. (17 August 2017). [online]. [last accessed on 15 August 2020]. Available from: <https://cms.law/en/nld/publication/esports-and-image-rights>.

[13] Roundhill Investments. “E- Sports Glossary”. Roundhill Investments. (2020). [online]. [last accessed on 15 August 2020]. Available from: <https://www.roundhillinvestments.com/esports-glossary>.

[14] Lewin, Pete. “Why Every Esports PLayer Needs a Contract”. The ESports Observer. (21 November 2016). [online] [last accessed on 15 August 2020]. Available from: <https://esportsobserver.com/every-esports-player-needs-contract/>.  

[15] Contractbook. “Electronic Sports (eSports) Player Contract (EU)”. Contractbook. (2020). [online]. [last accessed on 15 August 2020]. Available from: <https://contractbook.com/templates/electronic-sports-esports-player-information-eu>.

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Digital Forensics and Law Enforcement

By: Prabha Devi Ganesan

INTRODUCTION

Digital Forensics is also defined as the science of identifying, preserving, analyzing and reporting of any evidence stored in the digital media like computer, network, server and mobile device. The documents of the evidence which are collected from the storage media computer system or any digital device can be used as evidence in the court. Before performing a forensic investigation a digital forensic examiner must understand various concepts in forensic.

People who can involve at the time of investigation are

  1. First responder
  2. Forensic investigators
  3. Court expert witness
  4. Law enforcement personnel

Process of Digital Forensics

  1. Identification -The first process of digital forensic is that what kind of evidence is present and also identifying the format and finding out where it is stored in the computer or mobile device.
  2. Preservation – It means that all the data is isolated, preserved and secured from using the digital device.
  3. Analysis – Based on the evidence found the fragments of data are reconstructed and the conclusion is being drawn as a conclusion. It also tells that how was it taken place.
  4. Reporting – It is like reconstructing all the crime scene and reviewing it with proper photograph, sketching and mapping the crime scene
  5. Presentation – This is the last process and all the above process are being summarized in this process and explained and put to a conclusion. The terms should be written in a abstracted terminologies

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Principles of digital evidence can be gathered digitally from the messages that are sent via phone, email internal history, computer files, images and instant messages. It can also be from the sources like desktop computers, laptops, mobile devices and cloud.

Main objectives

It helps to find the identity of the suspect or the culprit. Reconstructing the procedures at the crime scene may help to ensure that digital evidence which is obtained is not being altered or corrupted. It also helps to identify the evidence at short period of time and also gives overview of any malicious activity involved. It also helps to find the motive behind the crime scene. Process of computer forensic report gives a complete documentation on the investigation process. All the evidence is preserved by following chain of custody.

In case of confiscating a computer, expert forensic examiner must be called. The expert is called to ensure that any criminal actions doesn’t get lost or damaged if the computer is switched off. Pictures of the data that is currently being displayed on the screen and when the computer system is taken into custody when the server system is off because when the server system is off, the data saved can be damaged or disrupted from the services provided to the customers. As soon as the mobile is being confiscated it must be switched off and battery must be removed it is to make sure that the recent call information and cell tower remains unchanged. Once if it is off we shouldn’t turn it on because it may change the information on the device. A remote command can be sent without the knowledge of the investigator if the attacker gets to know about the mobile device is on. The mobile must be kept off because there are many other chances where it can be switch on easily. All the evidence which is collected is kept in FARADAY BAGS or other materials used when isolating a mobile device.  We should turn on flight mode. Turn off WIFI. Turn off Bluetooth. NFC or other communications system must be off. To prevent static electricity it can be kept in a material where there is no passage of electric current like paper bag, paper made out if cardboard and any envelope made up of paper.

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LAW ENFORCEMENT

Computer based evidence have common in court proceedings and also it consists of many important information for computer for intelligence than the law enforcement. There is much enforcement of techniques that law enforcement is not being known. Digital forensics is involved in the commercial organizations   in case of any disputes regarding the employment, wrong or fraud investigation and intellectual property theft bankruptcy etc.

CASE LAW 1:  (CREDIT CARD FRAUD)

STATE OF TAMILNADU VS THE MANAGER OF BPO ORGANIZATIONS (BUSINESS PROCESS OUTSOURCING)

FACTS OF CASE: The manager with the fraud control unit of BPO filed a complaint stating that two of his employees has conspired with the credit card holder and manipulated the credit card limit and as a result they cheated the company of INR 0.72 million. After the investigation they have seized six mobile phones, imported wrist watches, jewelers, credit cards and leather accessories all worth of INR0.3 million and cash INR 25000. They also informed the company of the security lapses in their software so that cases like this could not be repeated in the future. This case has won the second runner-up position for India Cyber Cop Award for its investigating. It was also stated that the case was remarkable by the investigating team of the business process and its use in collecting digital evidence.

CASE LAW 2: (BLACKMAILING)

STATE OF MAHARASTRA VS THE NRI (NON-RESIDENT INDIAN)

FACTS OF THE CASE: the accused was a NRI was working in Dubai she posed to a young girl living in Kolkata to enter into Han email correspondence. The accused started corresponding with the complainant using different email IDs with different female names which made the complainant believe that he was corresponding with different girls. Later on the accused asked for money and gifts and also sexual favors from the girls whom he was corresponding with. The accused started blackmailing the complainant referring to the email exchanges and she was made to believe that one of the girl committed suicide and sent fake copies of high court of Calcutta he also paid the bribe for the officials who supposedly investigating and compensate the family. This case won the first runner-up position India Cyber Cop Award for its investigating

Coming to the network forensics it involves HEX CODES AND ASCII CODES

ASCII CODES – AMERICAN STANDARD CODE FOR INFORMATION INETRCHANGE

When we take forensics it is also important to know about the number system fundamental. It is for the understanding the machine. There are 4 types they are binary, octal, decimal and hexadecimal

Binary number

Base -2

Symbols- (1-0)

Octal number

Base – 8

Digits – (0-7)

Decimal number

Base -10

Standard number is always 10

Hexadecimal number

Base – 16

Digits – (0-9)

Characters – A to f

OFFSET – It indicates the distance between the starting or beginning of the object and a given element or point with the same object.

FILE SYSTEM FORENSICS

The Identification, collection and analysis of digital evidence from different types of storage media is known as FILE SYSTEM FORENSICS. There are many concepts that relates to the file system

 

Firstly,

Hard disk – data can be hidden on the maintenance track or it can be protected or preserved in a protected area on the hard disk which is also known as evidence collection tool

File allocation table (FAT) and Master File table (MFT) in New Technology File System (NTFS) are to keep a track of files present in the storage media

Deleted files are removed from the file system table even though it looks like it has been deleted from the hard disk and looks like it doesn’t appear in the hard disk anymore and the clusters which are being deleted allows the other files to save or store data. There are different ways to recover the data using certain techniques we can use hex format   when we are using hex format we should start from the starting or beginning and end of the file. We should copy it in a text file. After saving it in a text file it has to be saved in an appropriate file extension.

PARTITION TABLE

It is the Master boot record. It enables a computer system to know how the hard drive is being organized particular partition are being erased but still it is being stored in the hard drive.

 

SLACK SPACE

The data is hidden in a random data is called ram slack found left over at the end of the volume. If the data are being deleted and if the clusters are not being stored it can be used in to store the data, and also the data which is deleted can be restored. It is mainly to hide the data in the storage media in a computer.

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FREE SPACE

The space which is being created are being obtained after the deletion of the file which is been deleted from the original partition is called free space

FAKED BAD CLUSTERS

The data can also be stored in cluster that are named as bad and master file table which is names as badclus contains the information about the bad clusters present in NTFS file system. Size of file system is equivalent to the size of the volume. It is used to hide the size of the data stored on volume by a suspect

FAT 32 – 1996

It is mainly used in DOS and windows operating system before windows XP. 32 in the FAT32 represent the 32 bit number to depict cluster value. It accommodates 2^32. Newer hard drive don’t use FAT32

It gives a idea about where a particular file is stored it is also considered to be very simple when compared to NTFS file system.

NTFS

It’s a newer file system than FAT32

It is being used in Window NT & 2006

It has 512 byte record called boot record

It is used to read the information regarding the partition present on the file system and other relevant information that is used by the operating system to load properly

CONCLUSION

Digital forensic examination of electronic system has end up in a great success in the analysis of cyber and computer assisted crime and also it has equivalent importance on the appropriate incident management capabilities to handle misuse of systems.

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Laws relating to Private Equity in the Construction Industry

By: Ananyaa Jha

Introduction

The capital investment in a business plays a major role in determining its long-term sustainability and success and there are various sources available, one of which is private equity, which has gained momentum since the past two decades in India, especially owning to the boom of the IT sector. At present the private equity (PE) firms are showing tremendous growth, the funds are distributed evenly across different sectors to mitigate the risk-factor. PE is a capital form of investment in a company that is not listed or traded publicly.

The paper discusses the law governing private equity in India along with how does a PE investment work. It also throws light upon the increasing demand for last-mile funding in construction industry and how private equity can come to the rescue.

Private Equity & its’ Importance?

The term private equity refers to capital investment in an entity that isn’t publicly traded. It’s an interest or ownership in a company that isn’t publicly listed. Private Equity investment can be made in a public company with the objective of making them private and delisting them from the stock exchange platform. Private Equity investors gain equity in return for the capital they invest in the company. Private Equity investors are generally institutional investors (such as banks, hedge funds, pension funds etc.) or individuals having a high net worth, or private equity firms comprising of accredited investors.[1]

Private Equity is different than venture capital as the latter is a funding provided to start-ups or entities which are in the nascent stages which showcase a lucrative growth in the long run, whereas private equity is more commonly invested in mature businesses that have already been established but are unable to generate profits due to poor performance & lack of efficiency, and are in-turn failing.  Private Equities play an active role in the functioning of an entity in order to improve the performance and help steer the company in the direction of increased revenues so that upon selling the investment and exiting from the entity, a generous amount of profit can be earned.[2]

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PE is a crucial form of investment as along with providing the required liquidity in a project, it stimulates entrepreneurship & increases shareholders value, in turn promoting job creation and fuelling economic growth. PE leans towards the riskier side of an investment scale as there is high likelihood of a company failing to perform. It involves a high level of long-term risk in order to yield high returns. Various strategies of PE investment include but is not limited to- growth equity funds, leveraged buyouts, venture capital investments, certain real estate investment amongst others.

Construction Industry & Private Equity

Construction industry and private equity have joined hands for the past many years, coming together to fund significant development projects worldwide. In the absence of PE firms, a lot of real estate development projects wouldn’t see the light of day or wouldn’t have reached the finish line. In this industry, the PE firms make available the required funds to help a project start and finish. These firms have a major role to play in the development of real estate.

Development of the real estate in any country is a costly affair, sometimes requiring the support of foreign investors too. The entire project can cost upwards of 10 to 100 crores. In majority, the development firms fall short of the necessary amount to fund the project in its entirety. This is where PE firms come into the picture. Usually, a banking institution will cover a hefty amount of the costs yet it leaves approximately 20-35% to be funded by the developers, which could still be a large amount, unable to be funded by the developers on their own, they may require additional help funding their project, bringing in private equity.[3]

If a PE firm chooses to invest in a real estate development project, they will have a major role to play in the process of decision-making. Basically, the PE firm/investor are regarded as either a majority or a part-owner of the property in which they are investing, owing to the large scale of investment in the project, they get entitled to a considerable scale of ownership of said project, which entitles them to have substantial influence in all the decisions to be made. They will provide their input throughout the construction process. The construction firm, in all becomes indebted to the PE firm.

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The year 2020 has witnessed a drop in PE investments because of the novel coronavirus disease’s outbreak (COVID-19 pandemic). The chance of specific sectors like healthcare, technology, e-commerce among a few others currently bringing about investment opportunities exists[4].

The real estate industry has taken a major hit due to the ongoing COVID-19 pandemic and the end of first quarter (March) has shown the sector to reach an all-time low. Commercial as well as residential sectors have been hit severely.[5] The already ailing residential sector in terms of poor demand is witnessing a hard time to launch any new projects or to even finish the ongoing projects due to shortage of labour and continuous construction stoppage.[6]

The slowdown in the sector will remain even post COVID-19 crisis and as lockdowns relaxation continues nationwide, since the construction sector is faced with a critical working capital crisis which holds utmost importance to restart the business & sustain it successfully. Many have their hopes pinned on intervention by the government to help recover the loss created by the pandemic. However, private equity can prove to be of aid in this current scenario.

The regulatory framework revolving around PE funds in India

In India, commonly the PE funds are established as trusts & in accordance with SEBI (Alternative Investment Funds) Regulations, 2012, are registered as an alternative investment fund (AIF). Although, only a company, trust and limited liability partnership are available to be used as the legal vehicle for the PE funds. Companies Act, 2013 provides for PE funds to be established as companies but this method is not used much due to the lax compliance required in comparison to trust structures and in addition, the unclear precedents for fund-raising. According to the Limited Liability Partnership (LLP) Act, 2008, the alternative investment funds can be instituted as LLPs, however, the LLPs use for PE funds is quite rare.[7] The regulatory framework:

  1. SEBI (AIF) Regulations, 2012

SEBI via notification dated May 21, 2012, repealed & replaced 1996 Venture Capital Funds Regulations of SEBI with the Alternative Investment Funds Regulations of 2012, The AIF Regulations were intended to provide for unregulated funds & extends its principles in this regard along with increasing stability and accountability of the market. There are 3 categories along which these AIFs are spread. Category II categorizes such AIFs which don’t come under the ambit of Category I & III. According to regulations, PE funds get registered as Category II. The purpose of preparing these regulations was to create a standard structure in order to govern private set of funds & investment vehicles to improve the channelizing of the funds.

SEBI has recently issued a circular that introduces various notable changes to the legal framework that currently exists. To strengthen the disclosures required, SEBI directed compulsory Performance Benchmarking along with standardizing PPM, that’s the prime document for disclosing all the relevant information to the potential investors, & Annual Audits for the alternative investment funds. On 1st March, 2020, all these changes have been enforced.

  1. The Companies Act, 2013

The Companies Act, 2013 brought with it a required overhaul for companies’ governance in India. The Act of 2013 brought major changes by placing regulatory responsibility, accountability & heavy compliance policies on private companies. Private companies take the ‘private placement’ route to raise capital as they aren’t permitted to offer securities to the general public & raise capital, so they have to take a different approach, wherein the securities are issued to only a selected no. of private individuals. Section 42 of the Act governs the ‘private placement’ process and all such private companies have to comply with the provisions contained in the section. The Section plainly states an invitation or an offer can’t be made to over 200[8] individuals, excluding the securities that are offered under ESOP[9] & the Qualified Institutional Buyers, but such immense rules in respect of PE funds are inapt because regulating the investments that are done through PE funds do not necessitate large compliances because the securities aren’t offered to the public. [10]

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The working of PE Investment

Elucidated below is a guideline which the investors/firms need to follow when they invest in private equity of an entity:

  • Raising Capital & Share-Purchase: The Private Equity investment process starts with chalking out an acquisition plan, & ways in which capital for it could be raised, that encompasses decisions based on different kinds of financing used for raising capital, etc, along with conducting due diligence. As soon as the acquisition deal closes, the management duties of the firm that’s been acquired becomes the responsibility of PE investors.
  • The Acquired Company’s Restructuring: The subsequent move is restructuring of the firm required to increase its productivity by managing the company through improving operations & reducing costs. It covers a wide range of crucial decisions about the operations, the expansion, the profitability, the strategy to be adopted, along with the company’s growth model. The involvement level will be directly proportional to the size of their investment.[11]
  • Selling/Exiting the Company: Generally, the end mission of PE firms is putting the company on sale/exiting at a sizeable profit, which usually takes place after around 3 to 7 successful years after initial investment, although the number of years may vary depending on specific strategic circumstances. After the acquired company begins profiting, & continues to show consistent growth, it is the right time to sell it as there exists high probability of the promoters gaining enormous profits from the sale of the entity. The PE investors get their share of the profits and enjoy a good return.

The demand for last-mile funding in Construction Industry

PE firms have been on the look out to take advantage out of the increasing need of last-mile funding by the construction/real-estate developers because of the on-going stagnation in the residential sector which has worsened due to the liquidity crisis that is existent in the country. Many of the PE investors are keeping an eye for offering capital out of existing funds for construction projects which are in the final or late stage & also establishing platforms in order to finance such real estate projects. [12]

After Real Estate (Regulations & Development) Act (RERA) was implemented in 2017, the developers since then have focused on completing the construction projects & so the demand for funding capital in the late-stages has soared. The banks unwillingness to refinance loan in addition to the liquidity crisis in the financial market has elevated the demand for PE funds because a substantial number of late-stage projects are unable to finish due to lack of capital.

Given the scenario, influx of last-mile capital funding coming in to complete projects is very positively transformative for all the concerned stakeholders. The benefit of last-mile funding is that comparatively it’s a less risky approach as these projects have the necessary approvals, the construction has begun & to some extent have started bringing about sales, so all of this helps to mitigate the risk involved, which provides better chances of reward & hence, investors interests piques.

The PE firms’ interest in the real estate sector is growing at the same time when the government is taking initiative to revive the sector. The government in 2019 announced the establishment of a Rs 25,000 crore AIF in respect of last-mile funding to get the stalled residential projects back on track, because sales have been on the declining scale since 2014, except a marginal rise in the year 2016, but the demonetisation decision by the government & goods and services tax (GST) implementation worsened the situation in 2017 & since the recovery in the sector is moving very slowly.

Conclusion

Private Equity and the construction sector haven’t always connected as the PE investors have by & large steered clear of the construction industry owing to a great deal of inherent risks, like the business having a cyclic nature, professional management, succession planning along with the unrealised expectations in respect of financial requirements of the construction business, i.e., bonding, & the owners of construction companies have been apprehensive of outside investors. However, that perception is changing as PE investors will bring not just financial aid but act as a strategic partner, unlike the other sources of capital & work with the business & make a sustainable model by keeping a long-term vision, thereby maximizing value. The PE firms will bring in deep understanding of the construction industry & help the companies grow by investing not just capital but an array of other valuable requirements for the company to grow.[13]

[1] https://www.investopedia.com/articles/financial-careers/09/private-equity.asp, (Last Visited at 9:00 AM on 6th November, 2020).

[2] https://www.investopedia.com/ask/answers/020415/what-difference-between-private-equity-and-venture-capital.asp#:~:text=Private%20equity%20is%20capital%20invested,potential%20for%20long%2Dterm%20growth., (Last Visited at 10:00 AM on 6th November, 2020).

[3] https://workwithfocus.com/news/private-equitys-role-in-real-estate-development-construction/, Last Visited at 5 PM on 6th November, 2020.

[4] Rukmini Rao, “Coronavirus: E-commerce, SaaS and healthcare to attract more PE funding, says report”, Business Today, May 14, 2020, available at https://www.businesstoday.in/current/corporate/coronavirus-e-commerce-saas-and-healthcare-to-attract-more-pe-funding-says-report/story/403823.html (last visited at 2 PM on 6th November, 2002).

[5] Knight Frank India Survey.

[6] Kailash Babar, “Covid-19 impact: Real estate sentiments hit lowest level”, The Economic Times, April 16, 2020, available at https://economictimes.indiatimes.com/wealth/real-estate/covid-19-impact-real-estate-sentiments-hit-lowest-level/articleshow/75175857.cms?from=mdr (last visited at 7 PM on 6th November, 2020).

[7] Pratish Kumar, Sumitava Basu and Divya Dhage, “Private Equity in India: market and regulatory overview”, available at https://uk.practicallaw.thomsonreuters.com/8-504-2425?transitionType=Default&contextData=(sc.Default)&firstPage=true, (last visited at 11:00 AM on 6th November, 2020).

[8]  Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014.

[9] Employee Stock Option Plan

[10] B&B Associates, “Private Equity in India: Evolution and Legal Overview”, July 31, 2020, available at: https://bnblegal.com/article/private-equity-in-india-evolution-and-legal-overview/, (last visited at 9:00 PM on 8th November, 2020).

[11] https://corporatefinanceinstitute.com/resources/careers/companies/equity-firm/, last visited at 11:00 AM on 8th November, 2020.

[12] Bidya Sapam, “Private equity firms sense big opportunity in last-mile real estate funding”, December 3, 2019, available at: https://www.livemint.com/industry/infrastructure/private-equity-firms-sense-big-opportunity-in-last-mile-real-estate-funding-11575311313757.html, (Last Visited at 10 AM on 9th November, 2020).

[13] https://www.cohnreznick.com/insights/private-equity-builds-bridges-construction-industry#:~:text=Private%20equity%20brings%20a%20lot,a%20company%20needs%20to%20grow., last visited at 11:30 AM on 10th November, 2020.

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Analysis of Laws Relating To Criminal Procedure In India, USA And UAE

By: Divyashree Dhumal

The Criminal Justice System is designed to delivers justice for all. Which also means protecting the innocent, convicting criminal and providing fair trails. The Code of Criminal Procedure is provided with the rules and regulations that has to be followed by the Court and Police. The Code of Criminal Procedure does not define what are violations of laws but rather set out procedure on how a criminal case should be handled. The Code of Criminal Procedure is important for the Defendant.  The Code of Criminal Procedure guarantee’s constitutional due process to those individuals charged with crime.

It is an objective of the Code to provide an opportunity of fair trail to the accused person and to make sure that the right of the accused is not compromised. The code makes sure that there is no delay made in the investigation and ensures fair trial. It also ensures the attendance of any person who is related to with the case through the means of warrants, summons, proclamation and attachments of the property. The Code provides a detailed scheme for the working of various functionaries of the state to help and administration of the justice.

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The Code of Criminal Procedure in India.[1]

Earlier there was no constant procedure for the Criminal Justice system in India. In 1861, the Code of Criminal Procedure was passed by the British Government. It was first created in the year 1882 and then amended in the year 1898.

In (iqbal v state of maharashtra, 1975) the Supreme Court said, “It is the procedure that spells much difference between the rule of law and the rule of the whim and caprice.”

The Code of the criminal procedure is called a Criminal Procedure Code (CrPC). It is Substantive criminal law in India. The act contains 484 sections further divided into 37 chapters, 2 schedules, and 56 forms. It provides detailed information about the investigation of crime, apprehension of a suspected person, evidence collection, determination of the guilt, and determination of punishment to the offenders. The Code describes all the offenses that are present in the Indian Penal Code on how should they be dealt with.

The CrPC provides uniform sets of criminal courts throughout the territory of India by conferring jurisdictions, powers, and functions. The Code separates the Judiciary from the Executive, which enables the state to work differently without the interference of any other organ of the state. The Judicial Magistrate works under the High Court of their respective States. The Judicial Hierarchy is represented by the Chief Judicial Magistrate and first- and second-class Judicial Magistrate, District Magistrate and subordinate magistrate. Earlier jury system was followed now the jury system has been abolished.

Under the Code of Procedure, every person is entitled to Fair trail and hearing from an independent and impartial tribunal. The Accused is considered to be innocent until proven guilty. The Accused has the right to be represented by a counsel. In case, The Accused is poor and in no condition to appoint a counsel then the court provides free legal aid. Some Special provision are provided under section 313,315 and 164(2), etc. made for protecting the rights of the Accused. Special provision is made for Protection of the accused person. Supreme court of India has also given guidelines with respect of right of the accused person (D.K. Basu vs State of West Bengal , AIR 1997).

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The Procedure of the Summary cases is same as the Summons cases except where it is provided. In summons cases the offences are punishable with imprisonment up to two years. Additional revisional jurisdiction powers are also given to the session’s courts by the High Court. The revision power given to the Superior Courts cannot be exercised by the Interlocutory orders. An appeal by the state in case of acquittal can be only filed only after obtaining leave from the High court. The Court has the power punish the blatant matters in case of perjury on the spot. Public Prosecutors and assistant public prosecutors are systematized and qualification is prescribed for the same. If a case is related to the central government which has to be removed then the consent of the government has to be taken.

Code of Criminal Procedure in USA[2]

There is federative structure in the United States, the federal government and each state has their own criminal justice processes, federal criminal procedure law and 50 different state jurisdictions. The pre-trial (investigatory) process and the trial (adjudicatory) process are the two parts of criminal law procedure.

In the first century Supreme Court of United states had no constitutional criminal procedure decisions. There were two reason for this and professor Akhil Amar pointed out two reason for that: first in (Barron v. Baltimore , 1833) the court decision meant that then federal constitution did not apply in state proceedings until the incorporation of the bill of rights after the fourteenth Amendment. Second, general appellate jurisdiction over federal criminal cases until 1891 was lacked by the court. The Criminal Procedure of USA has been derived from several source of law. The criminal procedure is different from civil procedures.

Under 3 article, 2 section, clause 3 provide that in trail of crimes except in impeachment case, such trail shall be held in the states where the said crime has been committed and if not committed in that state then at a place or places as the congress by law suggests and also there shall be jury for these cases. Fifth amendment is a relevant part of the United States Constitution, which says that no person shall be answerable for a capital, or infamous crime, unless on a presentment or indictment of grand jury, except in cases of land or naval forces, or Militia,  when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law.

Sixth amendment provides rights for the accused person such as in a criminal prosecution the accused person has right to speedy and public trail, with an impartial jury of the State and District where the crime has been committed. Eighth amendment provides that excessive bail shall not be required. Fourteenth amendment provides that no person shall be deprived of life, liberty or property without due process of law nor deny any person within the jurisdiction for equal protection of the law. Burden of proof always lies on the prosecution in a criminal trial which means that the Prosecution has to prove beyond the reasonable doubt that the defendant is liable. As there is no burden on the defendant. The Defendant has to only prove that it reasonably possible that the defendant did not commit the crime. Once both the sides have presented their cases then the case goes to the jury. The jury is made aware of all the legal rules which may affect the decision. the jury then deliberate in the jury room about whether the defendant is Guilty or not of the particular crime.

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At that point the jury is not allowed to discuss about it to anyone other than the other jury members or even read about the cases. Once the jury has decided it is called as verdict. In case the defendant is found guilty the sentence of the defendant is done by the Judge. After the sentence, the case enters the post-conviction stage and the defendant has the right to appeal to the Higher Court. American appellate does not retry the cases. In USA Plea bargaining takes place even in most serious crime such as homicide. Plea bargaining becomes impossible when the defendant is charged or indicted for the crime. After the defendant has plead guilty, the court recalls its rights. The parties participate in a discussion in which they try to agree on a particular sentence range and once they have reached to an agreement the case is disclosed in an open court. the court has the authority whether to accept the plea or not.

Criminal Procedure in UAE

The Initial step in a Criminal action for the victim is to file a complaint against the offender to the police. The complaint should set out the details of the incident that had occurred and the series of events pertaining to the criminal offences. The complaint can be in formal writing or by the way of oral statement before the police which is recorded in Arabic and then signed by the complainant. The complainant has to file the complaint before police station which has the jurisdiction. The complainant has the authority to call a witness who can testify against the offender which will be in his favour. Following the complaint, the police will have to get in contact with the accused and take his/her statement. During this whole process the accused can bring in potential witnesses who can testify for the accused.

The police have to report the case to the relevant department within the police station that are responsible for opining and reviewing the complaint. Once the police have finalized their task after taking the statements of all the parties, the complaint is given to the police prosecutor, a judicial authority empowered to refers cases to the Court. The Criminal trial in Arabic, and all statements are taken in or translated into Arabic. The Court provides the accused with sworn translator. Cases are heard before judges only, a closed setting. Only the legal counsel, the defence counsel and the parties to the case, along with the witnesses that may be haven been called are allowed in the chambers. In case if a minor is involved then parents and legal guardians can attend. There are no jury trails. The duration of a trail may vary and it depends on the emirate in which you are tried. There is no limit to the duration of trail. The punishment under U.A.E penal code are divided into two categories, sharia- based and Chastisement.

Conclusion

There is not much difference in the criminal procedure around the world and how they are enforced and applied. The Criminal trail works in the same way. But the criminal procedure in USA and India are much detailed and elaborated then UAE Criminal Procedure. The procedure of the investigation by police are also the same.

[1] https://en.wikipedia.org/

[2] https://en.wikipedia.org/wiki/United_States_constitutional_criminal_procedure

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Analysis of Marketing Strategies of Luxury Brand

By: Bushra Sarwar

What is a luxury brand?

The brand is the identity of a product which get associated with the customer. Branding is like the positioning of the product in the mind of the consumer. As per marketing management professor, Kotler, brands are designed by companies in such a way so that consumer can relate it or get associated with it.

As per the Economic theory, luxury brands are those brands whose demands increase with the rise in income of the consumer. Luxury brands are in contrast to the necessity of goods. So, the need of luxury brand is proportionally related to payment of the consumer. They are mostly status symbol products and catered to classy people. Luxury brands are targeted to high-class income group people.

Sometimes, luxury brands are equal to superior products. The essence of luxury goods is that they have high demand elasticity of sales, which suggests that they can profusely partake in the buying of luxury goods as individuals become bounteous & wealthier. However, this also means that if there is a reduction in consumer income, then demand will also decrease.

First and foremost, a brand-driven industry is the luxury industry. People purchase luxury products and services because they trust the brand and love it. Premium products and services are guided by their brand perception and success rather than any other group.

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How companies build luxury brands:

How do businesses build profitable brands? How do they make those products resonate through time and space with customers? What are the main success factors that cause the global brand environment to be dominated by some brands? These questions come into the mind of the CEO of the company and brand manager all around the world.  Develop a brand is not a one day or one-time affair. It is a long-term process to develop the image of a product in the mind of consumers. The company needs specific marketing and branding plan to increase brand outreach.

Source: Author’s Creation

Figure 1 Process of building Luxury Brands

Figure 1 presents the process of creating luxury brands. Identification of niche segment is the most critical steps in the process of building brands. For different products, the company should adopt different differentiation strategies. Develop the symbol for creating value in the brands. The brand creates exclusivity feature to make a difference among other brands. These all part together position the image of the brand in the mind of the customer. The above component will help brand managers to create luxury brands.

List of top 10 popular luxury brands

Source: branddirectory.com

What are marketing strategies?

The long-term preparation of corporate targets that the organisation aims to accomplish is a Marketing Strategy/Technique. It is necessary to choose specific measures to consolidate the credibility of goods and services or increase market sales to achieve these objectives. To identify the target market and to be able to keep customers loyal to the organisation to improve the positioning of the company, it is necessary to use opportunities.

To achieve positioning among customers and satisfy consumer and organisational relationship loyalty, it is essential to identify how do you want to place or position the product/service in the market. It is the method of creating sales opportunities, also of communicating and setting the product or service, and of translating the organisational lines that allow the correct channels to reach a target market.

Why does Company need marketing strategies?

Figure 3 Why company needs marketing strategies?

Source: Author’ created

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Marketing strategies adopted by luxury brands:

As per 2014 Mckinsey report, digital platform influences the 45% sale of luxury products. Luxury brands prefer to do advertising through print and electronic media. Nowadays, shoppers spent most of its time on online shopping, so luxury brands are coming on a digital platform to promote their products. Taylor (2020) suggested digital marketing strategies for luxury brands:

Analysis of marketing strategies

Michael porter defined four kind of generic strategies to create competitive advantage.

  • Cost leadership
  • Cost focus
  • Differentiation Leadership
  • Differentiation Focus

The Cost Leadership Approach focuses on minimising the cost of providing a customer’s goods or services, to become cost-efficient and add value to your shareholder’s wealth.

Under differentiation strategy, instead of focusing on the most part, brands differentiated their products from competitors. Under which business houses differentiate their products in terms of design, comfort, quality, and value-added features. As per Oh and Kim (2011), most brands prefer to use differentiation marketing strategy to create a difference in the market. Oh, et al., (2011) conducted this study in Asian countries (Japan, China and South Korea) and chose Louise Vuitton brand to study marketing strategies. The author found three critical factors which create Louise Vuitton as a brand: innovation, differentiation and customer-centric advertising.

Cost focus strategy focuses on cost leadership to focus on a niche market. Cost leadership strategy does not work on luxury products. Any strategy based on low costing would not work in fashion brands. Differentiation focus is the part of the differentiation strategy, which is used by the luxury brands.

PEST and SWOT Analysis:

  • PEST stands for political, economical, social and technological factor analysis.
  • SWOT stands for strength, weakness, opportunity and threat analysis.

SWOT & PEST tests are two approaches through which businesses plan ahead by carrying out research. Such variables are primary determinants of strategic planning. Businesses may fail to achieve desired objectives without SWOT and PEST analysis.

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Marketing strategies of famous brands:

Apple’s Brand:

Apple follows a straightforward brand strategy.  As their tagline says: Think different, Apple think differently at every stage of the product (product preparation to launching). Apple does not merely sell a phone or tablet; they simply sell a lifestyle to its luxury customers. Apple’s brand marketing makes people realize that they need an apple product to enrich their life with quality products and profitable experience.

Nike’s Brand:

Nike creates a strategy by knitting the story of a brand. Nike takes this opportunity to make a possible story around its every product to start the ideas, which fascinate the customers.

Adding a storytelling element to your brand or presenting the meaning of your business storey to your customers adds a human element to your organisation and can be a perfect marketing strategy for you.

McDonald Brand:

McDonald is not a new name in the market; it is recognized worldwide. Marketing strategy of McDonald is to maintain consistency.

How did McDonald’s build a name so distinguishable? Well, for over 60 years, they have kept their brand name and product consistent while making thoughtful and on-brand enhancements. Their logo has remained nearly identical, and their marketing taglines have relentlessly endorsed the same message: we make you happy.

Conclusion:

This write-up talks about the analysis of the marketing strategies of luxury brands. The article starts with the introduction of luxury brands and how companies are creating luxury brands by adopting differentiation strategies and top 10 brands based on brand value globally. It also provides an understanding of marketing strategies and why luxury brands needed marketing strategies and what marketing strategies followed by brands.

This article also analysed the Michael porter competitive advantage strategies and found the luxurious brands follow differentiation strategy. PEST and SWOT analysis are the two essential techniques followed by companies to achieve desired objectives. Finally write up concluded by comparing the marketing strategies followed by famous brands: Apple, Nike and McDonalds.

 

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References:

Top 50 luxury brands 2020. Retrieved by https://brandirectory.com/rankings/luxury-and-premium/table

https://www.toolshero.com/marketing/marketing-strategy/

How to build luxury brands. https://martinroll.com/resources/articles/strategy/five-steps-to-build-a-luxury-brand/

Oh, S., & Kim, J. (2011). Analysis of the Marketing Strategy of a Luxury Brand and its Success in Selected Asian Countries. International Journal of Interdisciplinary Social Sciences, 6(1).

Taylor, M. (2020). 10 Marketing Strategies For Luxury Brands That Deliver Results. Retrieved from https://www.ventureharbour.com/luxury-brand-digital-marketing/

 

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Supply Chain Management in Pharmaceutical Industry

By: Bushra Sarwar

Introduction:

What is Supply Chain Management?

Supply chain management (SCM) is the successful management of supply chain operations to gain competitive advantages and customer satisfaction. It reflects a concerted attempt by supply chain organisations to build and manage supply chains in the most reliable and possible profitable ways (Kapoor, Vyas & Dadarwal, 2018). Or

SCM is the handling of a good or service’s entire manufacturing flow, starting from the raw components all the way to providing the finished product to the customer.  A business establishes a network of suppliers that transfer the commodity from raw material suppliers to those organizations that directly communicate with customers.

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Core Concept of Supply Chain Management:

  1. Involvement of multiple organizations to transfer the product from origination point to end customer.
  2. Most organizations are restricted to their own activities which are happening inside the organization related to SCM, while few businesses understood the managed activities of supply chain for delivering the product to end user.

Flow in Supply Chain Management:

  • Physical Flow
  • Information flow

Physical flow is the most seeable part of SCM, which involve movement and transfer of goods from one place to another place.

Information flow involves the coordination of daily information about transfer of goods among various members of supply chain.

Working of Supply Chain Management:

Figure 1 Working of Supply Chain Management

Source: IBM

Five C’s of Supply Chain Management:

Figure 2 Five C’s of Supply Chain Management

Modern features of SCM are connectivity with the social media and modern disruptive technologies like IOT (Internet of things), AI (Artificial Intelligence), ML (Machine Learning) etc. collaboration among the supplier by using cloud computing to enable collaboration with many enterprises. Cyber-aware is the most important part to protect the supply chain from cyber attack and malicious malware. Controlling of supply chain through AI enabled platform to make it more automated. Usage of analytics for scale up the information in real time, which is comprehensive and fast. Predictive analytics help to predict future demand based on historical data.

Overview of Pharmaceutical Industry:
India’s presence in worldwide pharmaceuticals is prolific and rapidly expanding. It is the world’s largest supplier of generic drugs, having a 20 percent share of global supply by volume, and also supplies 62 percent of global vaccine demand. India secures 3rd position in production of medicines and14th place in terms of value. India is the only country outside of the USA with the highest number of US-FDA compliant pharmaceutical plants (more than 262, including Active Pharmaceutical Ingredients). More than 2000 WHO-GMP (World Health Organization-Good Manufacturing Practice) sanctioned pharma plant and 300 EDQM (European Directorate of Quality Medicines) plants in India.

60,000 generic brands are produced in India across 60 categories. India is home to more than 3000 companies with a fast and secure network of 10,500 manufacturing facilities (Invest India). Export in Pharmaceutical industry is growing with a growth of 10.72% every year. Cost of production is 33% lower in India in comparison to US market, which attracts most of the companies to open their pharma plants in India.

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Top 10 Pharmaceutical companies in India and worldwide:

Indian Companies Revenue (Billion US $) Global Companies Revenue (Billion US $)
Sun Pharmaceuticals $4.2bn Johnson & Johnson $56.1bn
Dr Reddys $2.4bn Pfizer $51.75bn
Divi’s Laboratories Ltd $2.3bn Roche $49.23bn
Cipla $2.5bn Novartis $47.45bn
Aurobindo Pharma $1.9bn Merck & Co. $46.84bn
Torrent Pharmaceuticals Ltd $1.5bn GlaxoSmithKline $44.27bn
 Lupin $1.2bn Sanofi $40.46bn
Zydus Cadilla $1.0bn AbbVie $33.26bn
Abbott India $1.7bn Takeda $30.52bn
Alkem Laboratories $1.8bn Shanghai Pharmaceuticals Holding $26.69bn

Source: Pharmaceutical-technologies.com

Supply Chain Management in Pharmaceutical Industry:

Pharmaceutical companies do not have flexible, cost-efficient and robust supply chain (Pwc report-Pharma 2020). Figure 1 presents the supply chain of pharmaceutical industry. It covers the innovation and development of new product, manufacturing, packaging, distribution to wholesaler, retailer, and pharmacy and directly to patient. Presently pharmaceutical companies are not working on JIT (Just in time) basis, or producing on demand basis, rather they produce the things, store it in the warehouse and decrease the cost efficiency of companies.

Figure 3 Supply Chain of Pharma Company

Source: Pwc

The pharmaceutical supply chain involves a wide variety of stakeholders; including suppliers, wholesale distributors, and pharmacy benefit managers. The stakes are high for pharmaceutical firms in such a dynamic phase. Drugs that are improperly marketed damage both the credibility and customer loyalty of the organization, as well as future benefit. An inefficient supply chain can disturb the health of patient and create disruptive effect on public health.

Challenges in SCM of pharmaceutical industry:

Major challenges in pharma industry is to maintain the quality of drugs, delivery on time, network of supplier, mode of transportation etc. Few drugs need optimum temperature during transportation from one place to another which became a challenge if temperature is not maintained (Shah, 2004). Recently in news temperature of -80degree Celsius is required during transportation to maintain the quality. So, here emerging technologies like block chain can help to monitor the temperature of vaccine.

Best practices in Pharmaceutical Industry:

In recent years, the pharmaceutical industry has become highly competitive. The rise of counterfeit medications, stringent quality regulations and serialized mandates has been seen. This made it important for the pharmaceutical industry’s supply chain to be strong and traceable. Hill (2019) discussed five best practices to be applied in pharmaceutical supply chains.

Associate and Consort with digital business network

The cornerstone of a multi-enterprise supply chain is a digital business network. This electronically links all of the supply chain partners across the cloud. It makes it possible for them to work together in sync when pharmaceutical supply chain partners are related. This offers end-to-end visibility and an incentive for multiple business interactions to collaborate.

Evaluate manufacturing Practices

Analyze in depth the manufacturing process. Focus on the collection of good quality practices required so that all goods are consistent across all batches. Implement sound measuring practices to guarantee that a drug’s recipe is not contaminated.

Corroborate traceability

In order for pharma companies to have visibility into the development of their partners, end-to-end traceability is important. This will assist them to manage the consistency of the commodity across the multi-enterprise, multi-tier supply chain. Companies can use block chain technology, Internet of things to ensure the traceability in the supply process of medicines.

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Respond to change in Demand

In order to identify and respond to changes in supply and demand, pharmaceutical supply chain management must be robust. You will analyse knowledge in real time through the implementation of state-of-the-art planning applications. Share it with your supply chain partners immediately if you notice an unexpected shift in demand or a supply interruption.

Transparency in Inventory

It is also essential to assign transportation, warehousing and other value-added services to various channels. Get full visibility of inventory downstream and enforce good shipping practices. This will ensure that the destination is reached by your pharmaceutical goods without losing the quality. Transparency will increase the confidence among the partners and stakeholders of supply chain.

Conclusion:

This write-up describes about the supply chain management in pharmaceutical industry. It includes basic concept of supply chain management, flows (information and physical) of supply chain management, working of supply chain management and five C’s of SCM. This study also describes the overview of pharmaceutical industry, top 10 companies worldwide and in India. Role of supply chain management in pharmaceutical industry is also discussed. Effective supply chain management can create the efficient supply of drugs to end users. Major challenges in the SCM are to maintain the quality of drugs, on time delivery etc, which can be resolved by using emerging technologies like block chain, IoT and AI. Finally write-up concludes with the best practices followed in the pharmaceutical industry.

References:

Kapoor, D., Vyas, R. B., & Dadarwal, D. An Overview on Pharmaceutical Supply Chain: A Next Step towards Good Manufacturing Practice. Drug Des Int Prop Int J 1 (2)-2018. DDIPIJ. MS. ID, 107.

Mehralian, G., Zarenezhad, F., & Ghatari, A. R. (2015). Developing a model for an agile supply chain in pharmaceutical industry. International Journal of Pharmaceutical and Healthcare Marketing.

Shah, N. (2004). Pharmaceutical supply chains: key issues and strategies for optimisation. Computers & chemical engineering, 28(6-7), 929-941.

Pwc Report (2020):Pharma 2020-Supplying the future. Retrieved from https://www.pwc.com/gx/en/pharma-life-sciences/pharma-2020/assets/pharma-2020-supplying-the-future.pdf

Hill, K(2019). Five best practices of Pharmaceutical Supply Chain Management. Retrieved from https://www.epmmagazine.com/opinion/5-best-practices-that-pharmaceutical-supply-chain-management/

Wesources:

www.Google.com

www.Ibm.com

www.Pharmaceutical-technologies.com

www.InvestIndia.com

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Blog

Social Media Marketing and Consumer Psychology

By: Bushra Sarwar

What is social media?

Usage of internet, social media, smart phone apps and other technology for digital communication has become part of the everyday lives of billions of people. Nowadays, social media is prevalently used by everyone. Social media is a digital platform like Facebook, Instagram, Twitter, Linkedin, etc., which is used by the public to share their ideas, photographs, and information in the virtual world. Other activities like blogging, social gaming, business network, advertisement, platform to promote new talent, movie review etc. even politician used social media to create awareness and reach the voters (Stephen, 2016).  Even in such pandemics, social media helped a lot to spread awareness about the harmful effects of covid. As per the news article of Krishnan (2019), average time spent on social media by Indian is more than 2 hours. An average US adult spent 38 minutes/day on Facebook, while 16-24 years age group youth spent 3hours/day on social media (Metev, 2020). Metev (2020) expected more than 3 billion people are expected to join the social media network.

Social networking began as a way for friends and family to communicate. Still, it was later embraced by companies who wanted to take advantage of a typical new medium of communication to reach consumers. The strength of social media is the opportunity to communicate and exchange data with everyone on this world or several individuals at the same time. Social networking has been primarily adopted as an efficient tool that supports companies’ marketing objectives and strategies, especially in aspects related to customer interaction, management of customer relationships and communications.

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Types of Social Media Network:

Foreman, C. (2017) defined various types of social media network and its usage. Social networking can strategically strengthen two-way contact between businesses and consumers and link more customers to organisations as a result. Figure 1 presents the summary of Foreman defined social media network. Ten types of social media network are explained, and every platform has a different usage for its users. Along with social media, network examples are also given.

Social networks are communication and interaction channels that lead to growing trust among societies. Any website or online forum that allows users to express their views, thoughts, information, and promotes engagement and community building can be categorised as a social network. (Ziyadin et al., 2019).

What is Social Media Marketing (SMM)?

SMM is the use of social media platforms (Facebook, Twitter, Snapchat, Instagram, Youtube, Pinterest etc.) to create your brand, to reach in the audience, to boost traffic on your website, and to reach masses at once. SMM includes sharing great content on your social media pages, listening to your followers and engaging them, reviewing your metrics, and running social media ads.

Do you ever realize, if you visit any add, shopping sites like Amazon, Flipkart, Myntra, AJIO etc., on social media, you start getting recommendations to buy or see on the same kind of advertisement on your social media platform? It is surprising why it happens? It happens due to data analytics tools. Whenever you start visiting a website, company start storing your data and using predictive analytics, start identifying your choices of things and start sending mail related to your wish list.

Fundamentals of Social Media Marketing:

Figure 3 presents the fundamentals and core pillars of social media marketing. Whenever you are in think of to publish something on social media, start looking on the five fundamental principles of SMM. Social media platform generated a lot of content writer jobs to youth. Firstly identify your strategy, define your goals and objectives, identify social media platform and decide the type of content which you want to share with the world.

Start planning and publishing the excellent content on the desired platform, engage your audience by social media tools. By using analytics, identify the preferences of the masses and start catering the same advertisement.

What is consumer psychology?

Consumer psychology is the branch of social psychology to understand the behavior of consumer. Consumer psychology is the process used by consumer to select, decide, and in purchasing of products. Consumer psychology is very important to the business world, once they understand the behavior of consumer, it would be easy for them to serve the products of their choice and desire. As per the Kotler (Marketing Management Book Author), marketing is the pull process, not push process and in this way it differs form selling. When companies start innovating the products, and selling the products as per the consumer’s choice, companies start gaining the market share and stay ahead from their competitors.

Influence of social media on consumer psychology:

As per Fitzgerald (2019), social media has become an essential tool to influence the buying behaviour of consumers. Now a day’s business world is using social media network to reach a large number of population. Studies believed that three kinds of factors affect consumer psychology: social, personal, and psychological. Individual elements are people’s interest and opinion; psychological factors are a person’s beliefs and attitude, whereas social factors are peer’s group, social group, and social media group.

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Fitzgerald presented few facts which show that social media influence consumer psychology:

  • 71% population buy the things based on social media referrals (hubspot report)
  • For purchasing 31% user browse social media. (marketing week.com)]
  • Social media influence purchase of 47% millennial. (Deloitte)
  • To increase brand familiarity 80% population uses social media. (maybe Tech)
  • Shopping brands which have social media presence, their sales are 32% more. (Big Commerce).
  • Mostly brands (90%) use social media for creating brand awareness. (Hootsuite)

The above facts shows that social media has strong presence and influence our decisions. Now this article is discussing the stages of consumer buying process-

Figure 4 Buying Behavior Process

Figure 4 presents the stages of consumer buying behavior process. Social media has strong presence in all the stages, which influence need identification process of customers, during exploring the products, social media sites provides lot of options to explore number of brands products which influence the decision making process of consumers. Social media influence purchase of consumer through various factors. Factors are given below:

  1. Create product awareness
  2. Originate social proof to influence other customers
  3. Discount offer, promotion on social media
  4. Brands endorsed by celebrity and advertise on social media
  5. Celebrity and well known person reviews
  6. Trend set by the influencers

The above factors show the influence of social media in the buying behaviour of consumers because these factors affect consumer psychology. Social media platforms create awareness about the products. Social proofs are significant in an online platform to make a purchase. Whenever we buy any products from social media, we always look for reviews, from the other customers who already purchased the same products and are using it. This creates a picture of satisfaction o sense of belongingness in our mind and forces us to buy the same products which have excellent reviews on social media platforms.

Sometimes, discounts, sales, offers influence or pull the consumer to make a purchase. For example Flipkart, amazon, myntra, big bazaar generate offers on the occasion of Diwali, Dussehra, or any Festivals. Similarly, big bazaar has Wednesday offers. These all offer influence consumer psychology. Similarly, celebrity advertisement and celebrity endorsement also influence our psychology.

Why consumer psychology is important?

Seventy-six per cent of customers expect businesses or brand houses to consider their needs and desires (Salesforce survey). This suggests that if a business brand doesn’t know what a customer wants until they can tell you, they’re likely to take their company elsewhere. Influential companies develop their marketing campaigns based on insights into customer behaviour. Based on their thoughts alone, they do not produce goods and marketing plans; they bring external input into the fold to figure out what consumers want and how they want it then engage with them accordingly. This is the essence of having a meaningful customer experience. For creating a loyal customer base, customer experience is significant.

Conclusion:

This article/write-up throws the light on social media and consumer psychology. The article starts with the introduction of social media, social media networks, and social media marketing. Ten types of social media network discussed in this articles which have a strong presence in the minds of consumers. Strategy, planning and publishing, engaging the customers, analyse and predict consumer behaviour is the fundamental of social media marketing. The article also discussed consumer psychology and how social media platform affects consumer psychology and influence consumer behaviour. Articles also discussed why consumer psychology is essential for the business to increase their outreach and presence in the global world. In all sense, it shows that social media has a strong presence which influences our psychology and buying decision process.

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Reference:

Foreman, C. (2017). https://blog.hootsuite.com/types-of-social-media/

Fitzgerald, R. (2019).https://connextdigital.com/how-social-media-impact-consumer-buying-behavior/

Krishnan, V. (2019). https://www.thehindu.com/news/national/how-much-time-do-indians-spend-on-social-media/article29201363.ece

Metev, D.(2020). https://review42.com/how-much-time-do-people-spend-on-social-media/

Stephen, A. T. (2016). The role of digital and social media marketing in consumer behavior. Current Opinion in Psychology, 10, 17-21.

Ziyadin, S., Doszhan, R., Borodin, A., Omarova, A., & Ilyas, A. (2019). The role of social media marketing in consumer behaviour. In E3S Web of Conferences (Vol. 135, p. 04022). EDP Sciences.