15th Jun 2021

SWIFT broke EU data laws, panel says

Belgian money transfer company SWIFT violated EU data protection laws when it gave US intelligence information on millions of private European financial transactions, an independent EU panel has said, calling on the firm to immediately halt the data transfer.

According to a draft letter - set to be made public on Thursday (23 November) but seen by the DowJones newswire - 25 data protection officials from across the EU concluded that "SWIFT committed violations of data protection laws by transferring data to the US."

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"SWIFT and financial institutions must immediately take the necessary measures to end this illegality," the letter adds.

The European Commission is keeping its options open for now with a commission spokesman telling Spain's El Pais on Wednesday the report "is not binding, although it is an important political opinion, that we cannot ignore."

The commission could take legal action against the Belgian government for failing to ensure SWIFT complies with EU regulations, but the SWIFT company itself - situated just outside EU capital Brussels - is unlikely to face sanctions.

Belgian prime minister Guy Verhofstadt has previously said his country is not to blame and called on the EU to negotiate a formal data-sharing agreement with the US to provide legal clarity for firms such as SWIFT for the future.

SWIFT, which stands for the Society for Worldwide Inter-bank Financial Telecommunications, handles about 11 million financial transactions per day in more than 200 countries worldwide.

Its standard transfer format contains the names of the donor and receiver, the account number and bank address, as well as the amount and the intended purpose of the transfer.

It became known in June this year that officials from the CIA, the FBI and other US agencies had since 2001 been allowed to inspect the transfers as part of the global fight against terrorism.

But under EU law, it is illegal for companies to transfer confidential personal data to another country unless that country offers adequate protection.

SWIFT has defended its actions by saying that it was obliged to cooperate with Washington under US law since some of its branches are located in the US.

But this argument was rejected in September by a Belgian investigation which said SWIFT was subject to Belgian rules, regardless of whether the data transferred to US authorities came only from the company's US subsidiary or from its headquarters in Belgium.

European Central Bank President Jean-Claude Trichet told the European Parliament last month that power to prevent the transfer of personal data to US authorities for use in anti-terror investigations by SWIFT were "beyond the remit" of his bank or of European national banks.

European companies fear US espionage

European companies are increasingly concerned that the US, which is allegedly spying EU cross-border bank transfers as part of its fight against terror, is also doing this in order to obtain economic data.

Finance chiefs blame 9/11 for EU bank snoop affair

Belgian financial company SWIFT and the European Central Bank (ECB) have told MEPs they did nothing wrong in a secret deal to send European bank data to the US, with Washington's war on terror putting increasing pressure on EU civil liberties since the 9/11 terrorist attacks.

European Central Bank knew about US data access

The European Central Bank and the Bank of England were aware that customers' payment data were being transferred to US authorities, according to a document obtained by Belgium's Le Soir newspaper.

No cover up on SWIFT bank scandal, Brussels promises

The European Commission has promised there will be no cover up on questions about US access to EU bank data via the Belgian SWIFT system, but warned its investigation could hinge on niceties of EU law.

EU law violated in US banking data transfer scandal

The money-transfer company Swift has violated EU privacy rules when it secretly supplied the US authorities with millions of private bank transactions for use in anti-terror investigations, a Belgian commission has said.

European bank urges US to clarify snooping activity

The European Central Bank has called on the EU and the US to urgently clarify the line between data protection and fighting terrorism, saying there is currently no alternative to the SWIFT money transfer system where the US has received personal information on EU citizens since 2001.

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