EU and US seal agreement on bank data transfers

An earlier interim deal was rejected in February by the EU legislature, due to data privacy concerns and inter-institutional power struggling. It strained EU-US relations but put the Parliament's newly acquired powers centre-stage.

This time around, the Swedish commissioner believes the provisions have been "significantly" altered and will gather the support of euro-deputies. They may approve the agreement in July.

As outlined last week by Ms Malmstrom in anticipation of the final deal, the text says that all data sent to the US has to be based on an anti-terrorist investigation and that no random scanning, profiling or data mining will be allowed.

The transferred data will include a whole range of personal information on the initiator and recipient of a transaction, such as name, address and national identification number.

The agreement provides the right of rectification, erasure and blocking of wrong data, along with administrative and judicial redress. The latter has been a constant sticking point for MEPs.

Several layers of independent auditors are set to scrutinise the respect of all data privacy provisions. Similar reports by an EU-appointed auditor last year failed to convince MEPs, however.

As was the case in the past, the US pledges to send any leads on terrorism finance to police authorities in the member states concerned, as well as the bloc's police agency Europol and the justice co-operation body Eurojust.

A novelty of the draft agreement is the provision that Europol will verify all data requests from the US department of treasury – the entity where the "Terrorism Finance Tracking Programme" is based.

It was set up in the aftermath of the 2001 terrorist attacks and seriously strained transatlantic relations in 2006 when it emerged that it was tapping a secret US-based database of the Society for Worldwide Interbank Financial Telecommunication (Swift), the main company facilitating and keeping track of international transactions.

Following the scandal, the Belgium-based company decided to reconfigure its database structure so that European transactions were no longer mirrored in the US. The change occurred on 1 January, which justified the rush to vote in an interim agreement in February, so as to avoid a "security gap."