Council overrules Parliament on banking data deal


In what may be seen as the last EU power-play of its kind, European home affairs ministers yesterday (30 November) overruled the European Parliament’s wishes and made an interim agreement with the USA allowing American investigators broad access to EU banking data.

The agreement, approved by ministers in Brussels yesterday (30 November), ensures the United States will have continued access to European citizens’ banking data for a further nine-month period, while SWIFT moves its US databases and servers to Switzerland later this year. 

Although three EU countries – Austria, Germany and Hungary – had reservations about the deal, they abstained from voting, allowing the agreement, which required unanimity, to pass. 

Ahead of yesterday’s meeting, the European Parliament lobbied strongly for the agreement to be delayed until the Lisbon Treaty had entered into force on 1 December. The new treaty gives the Parliament increased powers of consultation, and would have allowed MEPs a far greater role in discussions on a new SWIFT deal. 

Indeed, Parliament President Jerzy Buzek last week wrote a letter to the current head of the European Council, Swedish PM Fredrik Reinfeldt, informing him of MEPs’ reservations. 

However, the Council pushed ahead, arguing that the interim agreement was a necessary step to maintain US access to European banking data. 

A Council spokesperson told EURACTIV that there was a certain degree of “misinformation” coming from MEPs, given that a conclusive deal on SWIFT will require the Parliament’s consent. 

“Member states had to conclude this deal yesterday because the mandate given to the Swedish Presidency was under the Nice Treaty,” he said. 

The US administration hailed the deal as a “welcome step,” reiterating its belief that the TFTP has been instrumental in strengthening America’s ability to thwart terrorist attacks. 

However, a number of MEPs responded angrily to the agreement, calling it inter alia an “act of ignorance” and a “black day for citizens’ rights and democracy in Europe”. 

A slap in the face of democracy? 

Indeed, according to the Brussels Blogger, an EU affairs blog hosted by BlogActiv, yesterday’s move was nothing less than a powerplay to ensure the European Parliament could not play a major role in the negotiations of the deal with the USA. 

This was a “slap in the face of democracy in the EU,” the blog argued, adding that delaying the decision would have been the right course of action, and would have allowed MEPs to capitalise on the imminent move of SWIFT’s data server to Switzerland “to stop the nearly unlimited access of US authorities to EU bank transactions”. 

Disappointed European Parliament officials, who did not wish to be named, told EURACTIV that while they regretted this “last roll of the dice” from the Council, with the Lisbon Treaty now in force such a move would no longer be possible. “Those days are over,” they concluded. 

On the company's website, SWIFT described the agreement as significant for the financial industry. 

"We understand the agreement would apply to all providers of international financial payment messaging services and would govern the terms upon which financial payment messaging data will be made available by EU based authorities to US authorities for anti-terrorism purposes," the press release said. 

"SWIFT is not involved in the EU-US discussions but is closely monitoring the next steps in the EU decision process. Implementation of this agreement must ensure the protections which exist today for citizens' data are maintained. The legal framework must be sound and leave no room for ambiguity to ensure private companies have legal clarity to operate," it concluded. 

US Under-Secretary for Terrorism and Financial Intelligence Stuart Levey said that "the United States welcomes the European Council's approval of an Interim Agreement between the European Union and the United States to support the continuation of the Terrorist Finance Tracking Program while a long-term agreement is negotiated next year. We thank the Swedish Presidency of the European Union and the European Commission for their leadership and dedication in concluding this Interim Agreement". 

He went on to note that "during the past eight years, the TFTP has provided invaluable leads in many major terrorism investigations, contributing greatly to our ability to thwart deadly terrorist attacks around the world. With scrupulously designed and multilayered controls and safeguards that are subject to numerous, complementary forms of independent oversight, the TFTP also embodies the highest standards of data privacy protection". 

"Indeed, the European Commission, on behalf of the European Union, recently conducted an in-depth review of the TFTP and concluded that these controls and safeguards are significant and effective and ensure respect for the protection of personal data," he said. 

"The European Council's decision is a welcome step, and it offers temporary protections to our citizens. It is critical, however, that we begin work at the earliest opportunity to conclude a long-term agreement. Counterterrorism cooperation between the United States and our European partners is strong, and we are confident that we will be able to work collaboratively to reach such an agreement, incorporating the robust safeguards just agreed upon," he concluded. 

German Liberal MEP Alexander Alvaro had argued in advance of yesterday's meeting that "the democratically-elected Parliament must be fully involved in the negotiations. We did not concertedly fight for so many years for a new era of cooperation in European domestic policies just to be hoodwinked in the final stages". 

Yesterday he described the agreement as an "act of ignorance," arguing that "it was incomprehensible" for EU ministers to approve it knowing the level of reservation among MEPs. 

German Green MEP Jan-Philipp Albrecht described the agreement as "a black day for citizens' rights and democracy in Europe. The EU has caved into pressure from US security services and agreed to downgrade fundamental rights and data protection standards for its own people". 

He argued that "it is a disgrace that EU interior ministers have rushed through this decision on the very last day before the EU Parliament gains co-legislative rights on this issue. The agreement disregards calls by Parliament and data protection rights organisations to respect basic international standards. The US has been given a carte blanche to ignore EU legal provisions on data protection". 

He concluded that "last-minute attempts to placate the Parliament with promises for the future are worthless. Today's contractual decision sets a precedent that the US can count on, despite any protests. A return to clearly defined rights is simply not possible on the basis of this agreement. I am considering making a complaint to the European Court of Justice, since national governments are clearly not acting in the interests of their own people". 

SWIFT is a private company that handles the banking transactions of thousands of banks, including most European institutions. The company is based in Belgium but also has a branch in the USA. 

Following the September 11 terrorist attacks in 2001, the US government used the new Terrorist Finance Tracking Program (TFTP) to force SWIFT's American branch (which mirrors all data based in Belgium) to allow US officials access to all bank transactions in order to help anti-terrorism operations. 

The US believes the programme allows access to data that could prove vital in tracking transactions between terrorist cells. 

However, some European political groups, notably the liberal faction in the European Parliament, repeatedly criticised the agreement, arguing it is "not only a restraint on European sovereignty but as a massive intrusion into every single European citizen's privacy".

German political parties were particularly opposed to the deal when it first came on the EU legislative agenda in July 2009 (EURACTIV 28/07/09).

Subscribe to our newsletters