MEPs threaten second veto on EU-US bank data deal

Earlier that day, the EU executive gave the green light to a draft agreement with the US negotiated by home affairs chief Cecilia Malmstrom. The text still needs approval of member states and the "consent" of the European Parliament.

The deal is "a positive step" and "incorporates important changes to accommodate the concerns" raised earlier by the European Parliament, the American ambassador to the EU, William E. Kennard, said in a press statement.

MEPs who spearheaded the rejection of the previous deal in February have again voiced serious criticism of the agreement however, to the dismay of EU commission chief Jose Manuel Barroso. During his monthly question time in the Strasbourg plenary, he reminded deputies of the importance of the transatlantic relationship and suggested it is important to "send a positive signal" to Washington.

The crux of the dispute is the issue of bulk data, which MEPs want to see filtered on EU soil, instead of sending it in bulk form to the US for processing.

Justice commissioner Cecilia Malmstrom explained on several occasions that the company facilitating international bank transactions, Swift, does not have the technical capability to filter out single transactions between individuals or organisations suspected of funding terrorism. This is done in Washington's Treasury Department, as part of the "Terrorism Funding Tracking Programme," which was put in place in the aftermath of the 2001 attacks on New York and Washington. In 2006, Europeans were aghast to discover that Swift had a mirror data base on US soil, which was accessed by American investigators. Some 60 percent of all international transactions originate in Europe.

Following the scandal, the Belgium-based company decided to reconfigure its database so that European transactions were no longer mirrored in the US. The change occurred on 1 January, with Washington saying that both the US and Europe have had a "security gap" ever since, since the tracking program has in the past produced valuable leads on terrorist activity.

The new bilateral agreement makes room for several EU and independent auditors, while the US says that the bulk data is encrypted and can only be accessed in a specifically targeted search for a certain name, which is already part of an anti-terrorism investigation. No "mining" or random scrolling through the various transactions is allowed.

"They won't be able to see what Cecilia has been transferring lately," Ms Malmstrom stressed in a press conference.

MEPs from the Liberal and Green camps are unimpressed, however.

"The US has the capacity to filter, so it can be done. We need to get the technology and do it here in the EU," Dutch Liberal MEP Sophie in 't Veld told EUobserver. In her view, the problem lies more with member states, which are not willing to deal with the problem themselves and "prefer outsourcing" the security work to the US on the principle "you have the needle, we give you the haystack."

The provision of involving the EU's police agency, Europol, in the process of authorising data requests from the US – a novelty compared to the interim deal rejected in February – is "very deceptive," Ms in't Veld said.

Instead of having Europol carry out the searches itself and transfer only the terrorist leads to the US investigators, she argued, its role would a mere rubber-stamping one – to look at the "compliance" of US requests with the agreement, not at the actual data.

The Socilaists' Mr Schulz also said his group "has serious concerns" on the involvement of Europol.

Ms Malmstrom speaking in parliament defended the involvement of Europol as "the only legal solution" for responding to data requests from the US in an EU framework.

From the perspective of Germany's Green MEP Jan Philipp-Albrecht, the message is clear: "The European Commission risks another rejection in the European Parliament ... Bulk data about completely unsuspicious persons will still be transferred to US authorities and stored there for five years. This is in breach not only of the binding EU Charter of Fundamental Rights, but also of recent rulings by the German Constitutional Court."

The centre-right European People's Party, which in February voted in favour of the deal, may still gather enough votes to push the agreement through. But some "fine-tuning" in the Council of Ministers may be required to get the necessary majority on board.