Commission starts data transfer talks with the US

The European Commission has begun talks on the transfer of personal banking details to the US authorities, it was announced on 31 January. Franco Frattini, the European commissioner for justice, freedom and security, told the European Parliament he had begun "informal discussions" to establish "clear rules and clear safeguards" on the transfers by SWIFT, a network owned by financial institutions.

The move comes as the EU’s top data protection official, Peter Hustinx, warned against such a deal on the banking transfers.

"What are we talking about? Is this a plan to whitewash the existing arrangement? That would be grossly out of context," he said in an interview with European Voice.

Frattini had previously said he wanted to see SWIFT comply with European data protection laws rather than negotiate a deal with the US on the transfers, on-going since subpoenas were served on SWIFT in 2002. Such a deal will evoke concerns among some MEPs and civil liberties groups that rights could be worn away by US demands on access to data.

But Guy Verhofstadt, the prime minister of Belgium, Jean-Claude Trichet, the president of the European Central Bank (ECB), and Belgium-based SWIFT have appealed to the EU to strike a deal to put safeguards in place to ensure that EU laws are complied with.

The announcement of the deal comes ahead of an opinion by Hustinx today (1 February) on the SWIFT case in which he will charge the ECB with co-responsibility for not ensuring data protection laws were followed.

The opinion will highlight the role the ECB played in overseeing SWIFT’s activities, in processing its own employees’ data and in shaping European payments systems.

Trichet admitted in a European Parliament hearing last October that the ECB was informed about the data transfers but that it had no authority to do anything about them.

But Hustinx said that the ECB was led to believe that nothing was wrong, and it did not act and that in future this would be an unacceptable situation. "If you have oversight, even if it is for financial stability reasons, this issue is so big that it has an impact. So they should improve their oversight structure," he said.

The ECB, Hustinx said, like all other banks, "should reconsider the terms under which they use SWIFT" to ensure that their clients’ and employees’ data protection rights were not violated. "They are in a unique position because they are also a policymaker for the payment structure; they are in the driving seat," he added.

Hustinx said discussions with SWIFT in December showed that "they have decided that this should move ahead" and changes be made. "The pressure of their clients, that is, the banking community, is having an effect," he added.

Francis Vanbever, chief financial officer of SWIFT, said that the company still disagreed that it broke the law but that it would be discussing with the banking associations how to improve transparency and keep customers better informed.

The European Commission has begun talks on the transfer of personal banking details to the US authorities, it was announced on 31 January. Franco Frattini, the European commissioner for justice, freedom and security, told the European Parliament he had begun "informal discussions" to establish "clear rules and clear safeguards" on the transfers by SWIFT, a network owned by financial institutions.