The New Trans-Atlantic SWIFT Agreement

Will it give European intelligence agencies access to U.S. banking records?
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The skirmish earlier this year between Washington and the European Union over who can spy on whose bank data may lead to a new, formal system of eavesdropping that lets Europeans investigate bank transactions within the United States.

Washington was eavesdropping on European bank transactions in 2006, secretly, when The New York Times and other newspapers uncovered a post-9/11 regime called the Terrorist Finance Tracking Program. Part of the TFTP involved issuing subpoenas to a Belgium-based company called SWIFT, which funnels trillions of dollars per day in bank-to-bank transactions.

SWIFT happened to maintain servers on American soil, so U.S. officials could subpoena the company for data on transactions within Europe. Investigators from the Treasury Department (which led the TFTP) and other government branches still insist this banking information helps them trace international terrorist rings.

No doubt that’s true; even terrorists need to move money. But it came as a surprise to European leaders that Washington could skim details not even they had the right to pilfer (because of tighter EU privacy laws). Meanwhile SWIFT has moved its servers to Europe and out of U.S. jurisdiction. When Washington tried to extend its privileges with a new SWIFT agreement last year, the European Parliament — alarmed at the long arm of U.S. law — objected.

The information gleaned from the TFTP was so valuable that Vice President Joe Biden and Secretary of State Hillary Clinton lobbied to keep the program going. The EU promised to re-draft the SWIFT agreement so European data could be properly protected. The Europeans also wanted to feel like equal partners.

So the European Commission (the EU’s executive branch) announced on March 24 that it would aim for a European TFTP — a sort of trans-Atlantic exchange program to let EU authorities eavesdrop on American banking transactions in return for American access to European data. Fair’s fair!

When SWIFT first cooperated with U.S. agencies over European data, according to Spiegel Online, “they passed on such information as … the payer and payee, as well as addresses, identification document numbers, account numbers, amounts and the designated purposes for the money.” Now European intelligence agencies could win the right to nose around in American banking data as part of a terrorism investigation — to spy on transactions, say, between Dallas and Oklahoma City.

European agencies aren’t used to needing so much American information, though. So, in practice, a new TFTP would amount to a loosening of European privacy laws, because it would give EU officials more power to deal with previously taboo banking data. “An EU TFTP could mean that the EU will not have to send data to third countries,” a source at the European Commission told the EU news site EurActiv.com, “that it can conduct its own investigations, that it can share its analysis with the U.S. and that we can work more as partners.”

The final SWIFT agreement, however it looks by June, will no doubt enlarge the pool of data that Washington and Europe can retrieve and share. Some of it will be useful to terrorism investigations; some will be data that certain governments have so far not even considered how to use. At the very least a European TFTP will be a kick in the pants to European intelligence agencies that aren’t quite up to speed with their American counterparts.

“The truth is that we in Europe don’t have the technical ability to interpret this stuff," an EU official told the Finanical Times late last year, referring to banking data covered by the SWIFT agreement. “We rely on the Americans to process it and pass it on as intelligence.”

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