The State Duma passed biometrics – Newspaper Kommersant No. 237 (7438) of 12/21/2022

The bill on the Unified Biometric System (UBS) was adopted by the State Duma in the second reading in the toughest version, in fact, without taking into account the comments of the banking community. Market participants argue that as a result, citizens will lose all desire to use the EBS, and banks will have additional costs. The third reading of the bill is scheduled for December 21. Lawyers admit that due to the importance of the bill, attempts to amend it may continue until it is signed by the president.

The proposals of the banking community to the draft law on the EBS, which was adopted in the second reading on December 20, were not taken into account, market participants say. Thus, Alexander Naumov, deputy head of the National Council of the Financial Market (NSFR), notes that the final text retained a clause on the transfer of data to the EBS without customer consent participants in the collection of information. In this case, in particular, it refers to the obligation of banks to transfer to the EBS the biometrics they have collected.

The data custodian must notify the subject 30 days in advance “in any form that allows you to confirm that the notification has been received.” But permission is not required, the data will not be transferred only in the event of an objection from the client.

“This is the main disadvantage,” emphasizes Mr. Naumov. “Customers, giving the bank biometrics, did not agree to transfer it to the state system. I think that people, as a result, will demand the removal of their biometrics.”

In addition, banks that have transferred data to the state system will then have to pay for their use. Only state structures, local governments and the Central Bank are exempted from charging fees. “With this bill, all data is looped on the state system… in terms of the development and popularization of biometrics among the population, this will reduce the desire of people to use it,” Alexander Naumov believes.

Banks are offered to share unique data for free, which they have been collecting for a long time at their own expense, agrees Georgy Okromchedlishvili, Senior Analyst at ITS WM. The high cost of processing with the help of the EBS will also lead to the fact that it will also be unprofitable for commercial organizations to use it, Mr. Naumov believes.

We are talking primarily about the deterioration of the prospects for the development of biometrics. EBS, which has existed since 2018, has not become popular. Private attempts to collect data and the organization of services based on biometrics by banks and companies are not in particular demand. In such a situation, Mr. Naumov sees no point at all in “turning biometrics into a state system that no one will need.”

Among the few advantages of the document, market participants note that the transfer of customer data without his express consent still implies the possibility of subsequent deletion of data from the EBS.

In addition, the service was not made mandatory: the client will not be able to refuse the service if he did not want to be identified or authenticated using biometrics.

The Big Data Association believes that the effectiveness of regulation will depend on the enforcement of the law. It is important that biometrics be understood as processes such as “identification” and “authentication”, and not just the processing of photos and videos, they emphasize there: “Otherwise, any use and transfer of photos may be in a gray area.”

The Central Bank stated that they “support the adopted amendments aimed at increasing the security and safety of biometric personal data of citizens, as well as reducing the risk of their unauthorized processing.” The Ministry of Digital Development stated that the bill takes into account all the proposals of the Bank of Russia.

Consideration of the bill in the third reading is scheduled for December 21. Lawyers admit the possibility of changes, despite the fact that after the second reading this happens very rarely – due to the importance of the document in terms of protecting personal data. This regulation, explains Andrey Gromov, CEO of GR Group, seriously affects the rights of citizens, which means that it can become the basis for a challenge in the Constitutional Court even before the signing of the law by the president.

Olga Sherunkova