EU-US Close to SWIFT Deal

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a Belgian company that maintains the central interfaces that 8,000 banks worldwide rely on when trading currency and securities; its operations are essential to the operation of the European banking system.^[1] Because it is a Belgian company it is subject to Belgian laws on data privacy, however it is also subject to lawfully-issued U.S. jurisdiction because of its contacts, with the U.S.^[2] We have previously discussed SWIFT in this blog, here.

Last year, an E.U. panel of data protection experts conducted an inquiry into the sharing and concluded SWIFT's transfer of banking data violated European privacy laws because it did not give enough guarantees that the data was properly protected.^[3] The issue became a major legal and political clash between the E.U. and the United States over anti-terrorism measures and the lengths to which lengths governments should go in trying to prevent terror attacks.^[4]

However now, European Union nations have reached a tentative deal with Washington clarifying how American investigators can use bank transfer data provided for anti-terrorism probes, diplomats said Wednesday.^[5] The deal is aimed at ending a trans-Atlantic fight over privacy rights brought on by the sharing of information on money movements by the Belgian-based SWIFT bank transfer consortium since Sept. 11, 2001.^[6]

The draft agreement would bind the U.S. to use SWIFT data only in anti-terror investigations, and the U.S. Treasury Department would have to certify that data would be handled under its program to track financing of terrorism.^[7] The department would be able to keep the data only for a specified number of years. Diplomats said the draft was approved Wednesday by E.U. nations and was expected to receive final approval by both sides Thursday.^[8]

We have previously discussed the problems of monitoring terrorist financing here.

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^[1] Nate Anderson, Terrorist financing: What's illegal in Belgium is required in the US, ARS Technica, February 16, 2007.
^[2] Id.
^[3] Constant Brand, U.S.-EU agree on using terror probe data, Associated Press Newswire, June 27, 2007, available at LEXIS, News Library, Wire News Services File.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.