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The needle, not the haystack

European authorities change the rules governing financial data sent to US

Posted By Martyn Warwick , 29 June 2010 | 0 Comments | (0)
Tags: legislation Finance Internet

European authorities have reached agreement with their counterparts in the US that will result in more stringent and verifiable guarantees relating to the privacy and confidentiality of European financial data sent to the United States as part of the ongoing "War against Terrorism." Martyn Warwick reports.

A few months ago the European Data Protection Supervisor issued an opinion stating that a new draft agreement on the transfer to the US authorities of details of the bank accounts and other financial data held by European citizens needed to be "tightened-up the better to protect privacy."

After the 9/11 terrorist attacks on the United States, many European financial institutions agreed to help to the Americans by transferring data, much of it relating to private citizens, and a considerable part of it of a private and confidential nature, to various US agencies.

However, over the years since there has been growing concern about "mission creep", the security of the information that is sent over the Atlantic and the uses to which it is put once its gets Stateside.

Thus, following the drafting of the new European Commission's Agreement with the United States on the Terrorist Financing Tracking Programme, that permits the US to have access to European-based and European-held financial data managed by SWIFT, the Belgian co-operative via which some 9,000 banking organisations, securities companies and corporations exchange financial information, the EDPS registered "concern" about further erosion of European standards of privacy and data protection.

EDPS boss, Peter Hustinx, said: "I am fully aware that the fight against terrorism and terrorism financing may require restrictions to the right to the protection of personal data. However, in view of the intrusive nature of the draft agreement, which allows transfers of data in bulk to the US, the necessity of such scheme should first be unambiguously established."

Thus the EDPS said that bulk transfers of data should be terminated and that data should be filtered at the European end before being passed over to the US. Currently, vast amounts of data are collected and sent across the Atlantic in their native state.

Indeed, the European Commission itself admits that so much data is being sent would be impossible for any agency or group of agencies, on either side of the Atlantic, to sieve, isolate and investigate any but the smallest percentage of information being transmitted.

Now, a new five-year agreement has been signed by the European Council. It means that when, as is expected, it is voted through on August 1 by the European Parliament, US authorities will be able to ask for access to European financial data only if it relates to a specific and verifiable terrorist investigation.

The agreement also calls for the US to retain financial data for a maximum of five years, (currently data is held indefinitely) and for the pact to be policed and monitored by an independent body. Furthermore, the US authorities will have to "delete or correct inaccurate data" and provide for "full redress" (including stringent financial penalties) via the US courts if an individual's financial or personal information is shown to have been "abused".

Speaking on behalf of a coalition of Liberal Democrat MEPs who had been demanding changes to what they described as "a very one-sided arrangement" Sophie in 't Veld, of the Netherlands, commented, "Currently, U.S. authorities submit a request for a needle and we send them the whole haystack. In the future, if the Americans say they are looking for a needle, we will find that needle it and send it and nothing more to the US authorities."

Some MEPs have long suspected that confidential financial data from European companies of potential benefit to US industry that is routinely hoovered-up by the US authorities can mysteriously find its way to the commercial sector. It is hoped that the new regime will help allay those suspicions.


And all this reminds me of the ancient witticism, "She was only the contortionist's daughter but she'd bend over backwards to please the ringmaster."


Ah, the old one's are the best.



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