11th Jun 2023

European bank urges US to clarify snooping activity

The European Central Bank (ECB) 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.

In a letter to MEPs on Wednesday (31 January), the ECB president Jean-Claude Trichet said "the ECB has investigated possible alternatives to using SWIFT services and has had to conclude that at this stage no feasible alternatives are available."

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"The main issue at stake is to find ways to reconcile EU and non-EU data protection legislation, as well as to maintain a proper balance between such legislation and the legal instruments applied in the fight against terrorism," he wrote, according to Reuters.

Mr Trichet added that it would be impossible for the ECB to supervise SWIFT, saying it was outside of its expertise and it had to respect its confidentiality obligations.

SWIFT, a private Belgian money transfer company, violated EU data protection laws when it gave US intelligence information on millions of private European financial transactions, an independent EU panel concluded in November.

The name stands for the Society for Worldwide Inter-bank Financial Telecommunications and the company 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 last 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 2006 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.

EU justice and home affairs commissioner Franco Frattini – speaking before the European Parliament on Wednesday - fell short of shedding more light on whether the SWIFT case was unique or if telecommunication records and records of insurance companies were also being tapped, as Dutch liberal MEP Sophie In't Veld had asked.

Only seven member states replied to a European Commission letter, sent out in November last year, asking whether national governments were aware of similar cases and under which conditions banks use data through SWIFT.

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