European Central Bank knew about US data access

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European Central Bank knew about US data access

EU Observer
June 29, 2006

The European Central Bank and the Bank of England were aware that customers' payment data were being transferred to US authorities, according to a document obtained by Belgium's Le Soir newspaper.

A consortium known as SWIFT, which manages the "Swift" codes for international payments, tried in vain to get permission from the Frankfurt and London banks to hand payment data to Washington, but the banks did not subsequently tell the government of Belgium - where SWIFT is based - that data was being transferred to the US.

SWIFT, which stands for the "Society for Worldwide Inter-bank Financial Telecommunications" based just outside Brussels, was thrust into the limelight when the New York Times last week reported that officials from the CIA, the FBI and other US agencies had since 2001 been allowed to inspect the transfers.

The Belgian senate announced on Wednesday (28 June) that it had opened a case on the affair.

The office of Belgian Prime Minister Guy Verhofstadt said in a statement that the probe will determine whether Belgian law and the rights of Belgian nationals were respected when information on financial transactions worldwide was passed on to US authorities.

The National Bank of Belgium (BNB) acknowledged that it knew of the transfers. But it claimed that it could do nothing about them as its primary task is to see to the soundness of financial transactions, not of data transfer.

The BNB leads an oversight group supervising SWIFTS's activities that includes the central banks of Britain, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, the United States and the European Central Bank.

Socialist MEPs want clarification
The European Parliament will debate the SWIFT case on Monday (3 July) after socialist lawmakers announced that they will take advantage of an already planned debate on the data of financial transfers.

French liberal MEP Jean-Marie Cavada criticised the US, saying "The United States only assumes the rights that detract the fundamental rights and principles of democracy. And they are doing it in an imperialistic way."

"The key question is where the data originated," said Kristof Van Quathem - a data protection adviser at Covington & Burling in Brussels – according to the International Herald Tribune.

"If it was transferred from the EU to the US, then that could breach European rules. A court in Iran can't just ask for a European company to reveal the sexual preference of a private individual, nor can a US court ask for private financial information about a citizen on the grounds of national security," he said.

According to Mr Van Quathem, Swift could face fines or an order to halt the transfers if it was found guilty of breaching laws in countries where complaints have been filed.

"European judiciary"
London-based human rights group Privacy International said it was alleging that SWIFT made the disclosures "without regard to legal process under data protection law" and without any legal basis or authority.

"This unlawful activity shows yet again how the US wilfully disregards the privacy rights not only of its own citizens, but also the rights of foreign nationals," said the head of the group Simon Davies in a statement.

"The scale of the operation is breathtaking, and the extent of privacy violation is almost without parallel. We will work to bring the programme to a halt pending further investigation."

A European diplomat said ironically however, that "in any case, the Americans have succeeded in doing what the Europeans cannot; creating a European judiciary. When you think that European judges spend years to obtain this kind of information," Liberation writes.


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No cover up on SWIFT bank scandal, Brussels promises

EU Observer
July 6, 2006

The European Commission has promised there will be no cover up on questions about US access to EU bank data via the Belgian SWIFT system, but warned its investigation could hinge on niceties of EU law.

"There is no question of a cover up, actually the opposite is the case," commission home affairs spokesman Friso Roscam-Abbing said on Thursday (6 July). "But we now have to wait for the Belgian authorities."

Belgium this week launched an investigation to see if the Brussels-based Society for Worldwide Inter-bank Financial Telecommunications (SWIFT) broke Belgian law by passing bank transaction data to the CIA.

Once the Belgian investigation is cleared up, the commission can begin to explore if Belgium also violated a 1995 EU data protection directive, two commission lawyers explained.

"It's a bit complicated," one of the experts said. It's like a car crash. You can't punish Belgium for a car crash but you can punish it for failing to implement EU road safety law - the second lawyer indicated.

The European Parliament the same day called for the European Central Bank to clarify how much it knew about the SWIFT-CIA links, while saying CIA snooping "could give rise to large-scale forms of economic and industrial espionage."

Deja vu
The SWIFT case mirrors the 2000 ECHELON scandal, in which revelations by investigative reporter Duncan Campbell said the US exploited its security relations with the UK to eavesdrop on EU firms.

Mr Campbell showed that the US derailed a deal between EU aviation firm Airbus and Saudi Arabia using the ECHELON phone-snooping system, leading the EU in 2004 to invest €12 million in data encryption research under the so-called SECOQS project.

"It seems that there was a transfer of [SWIFT] financial information between private companies from the EU to the United States," justice commissioner Franco Frattini told MEPs on Wednesday. "The information now at the commission's disposal was not passed on to the commission previously."

The SWIFT affair comes hot on the heels of the CIA rendition flights and secret prisons debate, with MEPs also voting on Thursday on an interim report saying Italy colluded with the US in extra-judicial kidnappings of terror suspects.

The MEPs' investigation was given weight by the arrest of military intelligence officer Marco Mancini in Italy this week over the alleged abduction of Egyptian cleric Hassan Mustafa Osama Nasr in 2003.

Mr Frattini claims not to know anything about CIA renditions either, despite being Italy's foreign minister at the time of the 2003 seizure and despite the commission holding regular security consultations with the US.

SWIFT and rendition links
Some MEPs are beginning to link the CIA and SWIFT situations into a general mistrust of the EU's supine and secretive acceptance of hawkish US security policy in the name of the war on terror.

The US has been operating secret flights in Europe, now it is "rifling through our private bank accounts," French liberal MEP Jean-Marie Cavada argued. "We would be mistaken if we understood the SWIFT case as an isolated matter," Italian left-winger Giusto Catania added.

Italian conservative Jas Gawronski attacked the CIA report as being "tendentious" however, saying it makes light of statements by EU top diplomat Javier Solana and anti-terror coordinator Gijs de Vries that they know nothing about the allegations.

Commission anti-terror budget
The European Commission plans to step up action in the counter-terror field despite the US-linked political setbacks, with Mr Frattini getting over €540 million for the job in the 2007 to 2013 budget period.

Key projects on the slate include proposals by 2007 on how to better protect "critical infrastructure" such as airports in the EU, a study in early 2007 on what causes "violent radicalisation" among young European men and research into how to stop people discussing bomb-making techniques on the internet.

Lovers of transparency will note that parts of the €540 million counter-terror spend will not be open to public scrutiny, with a case-by-case analysis of which projects can be discussed and which can not on security grounds.

"It would be crazy to reveal everything," a commission home affairs expert said.


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A report from 2001 by the European Parliament on the US-UK spionage on EU business, can be found in various formats here: [html] [word] [pdf]

It is also available in other languages (links to html formats):
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