European Parliament blocks bank data transfer deal with U.S.

MEPs divided: most say deal breaches citizens' privacy, but some argue that no deal undermines anti-terrorism efforts.

By Paul Meller, IDG News Service |  Government, privacy issues, terrorism

The European Parliament Thursday voted to block an agreement reached by the 27 E.U. national governments and the U.S. last month to allow European citizens' personal financial data  to be analyzed by American authorities investigating the financing of terrorism.

The vote was immediately criticized by supporters of the agreement, who claim that Parliament's veto impedes intelligence services tracking terrorist activities.

A substantial majority of MEPs voted to block the EU's interim agreement on banking data transfers to the U.S. via the SWIFT banking network, the Parliament said in a statement. The resolution rejecting the agreement was approved with 378 votes in favor, 196 against and 31 abstentions.

MEPs' objections to the deal are threefold: it breaches E.U. data protection rule; it is excessively invasive for its stated purpose; and it is one-sided because the U.S. isn't required to share the banking data of its citizens with E.U. counterterrorism authorities.

However, many observers see the vote Thursday as way for Parliament to flex its newly acquired political muscle. The Lisbon Treaty came into effect at the beginning of this month, granting the Parliament equal say over justice and security issues together with the national governments,  collectively known as the E.U. Council.

The Council signed the temporary agreement with the U.S. just days before the Lisbon Treaty took effect.

"Council has not been tough enough on data protection," said Jeanine Hennis-Plasschaert, a Dutch liberal MEP who argued that the rules on data transfer and storage provided for in the interim agreement were not proportionate to the security supposedly provided.

"We deeply regret that the European Parliament has rejected the interim agreement on SWIFT because we firmly believe that this instrument is extremely important for detecting terrorist activities and ensuring the safety of our citizens", said Simon Busuttil, a conservative MEP from Malta.

"The fight against terrorism is a priority for the European Union and a fruitful cooperation with the US -- including the exchange of information and data -- is a prerequisite to preventing terrorist attacks and ensuring the security of our citizens. This is why we were in favor of the SWIFT Agreement," Busuttil added.

At the heart of the political storm is SWIFT, a Belgium-based cooperative that transfers bank data across borders. U.S. authorities tapped SWIFT's databases in the wake of the attacks on September 11, 2001, in a bid to trace terrorist financing.

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