25th Sep 2023

Breakthrough in EU-US data sharing deal

  • Swift monitors - the company was at the centre of the data dispute (Photo: SWIFT)

The European Parliament looks set to give the green light to a controversial deal governing the sharing of bank data between the EU and the US after securing guarantees on privacy - concessions Washington said had been "difficult."

Key MEPs on Thursday (24 June) signalled their satisfaction with the latest version of the agreement, now likely to be adopted in plenary in July. Washington has been keen to see progress on the issue.

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"We have been focused on the first week of July as a very important juncture. We hope the parliament will approve a new agreement and allow the data transfer to resume," Adam Szubin from the Treasury Department told a group of European journalists in Washington on Wednesday (23 June).

Mr Szubin oversees the "Terrorism Finance Tracking Programme", which taps into international bank transactions facilitated by the Belgium-based Society for Worldwide Interbank Financial Telecommunication (Swift).

The programme, set up as a covert operation in the aftermath of the 2001 attacks on New York and Washington DC, hit the headlines in 2006, when the New York Times broke the story that US authorities were granted access to a secret database Swift kept on US soil, mirroring every transaction enabled by the Europe-based company.

The scandal prompted Swift to reconfigure its database and keep all data on European transactions on EU soil, a change which came into force on 1 January, prompting the US to negotiate an interim deal which would have allowed for the continuous flow of information. The European Parliament, however, struck down the deal, citing privacy concerns, as Swift is sending bulk data on all individual transactions, against which the US authorities are conducting the specific searches.

There is a special sense of urgency from the US side, the official added, pointing that "the concerns go all away up to the level of president."

"Our president is personally aware of the value of this programme and is very concerned to see that it is being restored and that the EU and the US reach an agreement to close the security gap," Mr Szubin said.

Some 1550 terrorism leads were obtained from the programme since its inception and many of them were connected to EU-based terrorism plots, such as the foiled plan to blow up transatlantic planes flying out of the UK in 2006.

Mr Szubin said the new negotiations that had just been concluded with the EU were tough and that the US side made a series of "difficult" and "substantial" concessions.

"With respect to the internal safeguards and the oversight, the right of redress, rectification and access, we believe this agreement is substantially strengthened in a way that speaks to all of the core European concerns that have been raised and this is an agreement we are very proud of," he said.

The concessions were hailed as a "breakthrough" by MEPs dealing with the matter. An agreement was reached on Wednesday night between EU ambassadors and the three main political groups – the centre-right European People's Party, the Socialists and the Liberals, meaning that the plenary vote will be scheduled for July and is expected to be positive.

"At the eleventh hour, we have obtained satisfaction on most outstanding issues, in particular that the EU commission and council commit to establishing a European version of the [programme] that will filter the personnel data of EU citizens before agreeing to US data transfer requests. We have insisted on a sunset clause (3 or 5 years) which means that if this EU data agreement is not in place by then the [agreement] would not be renewed," Guy Verhofstadt, head of the Liberal group in the European Parliament, said in a press release.

New aspects include the involvement of the EU's police co-operation agency Europol, which will formally approve or reject the data requests from the US Treasury Department and the appointment of an EU supervisor to oversee the way US investigators conduct the searches in the encrypted data.

Only searches on specific terrorist leads can be carried out in the data. The storage period is for five years. If the agreement comes into force, the data gathered in the six months that have lapsed will be recovered as well, US officials say.

Caving in

Not all EU deputies were happy with the deal. The Green group accused the parliament of caving in too easily on the issue of bulk data, which Swift will still send to the US because it lacks the capacity to filter out the individual transactions American investigators are looking for.

"The majority of the parliament is giving away any possibility of sustaining the pressure on the EU Council (of ministers), European Commission and US government to solve the problem of bulk transfers of data on completely unsuspicious persons, which by many experts is understood as a breach of European fundamental law," German Green MEP Jan Philipp Albrecht said in a statement.

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