European Central Bank wants EU protection from US
Denies responsibility for past intrusions
The European Central Bank has put its weight behind transatlantic talks that the EU hopes will secure the privacy of European citizens from the prying eyes of US anti-terrorist investigators.
Jean-Claude Trichet, ECB president, declared his support for the talks at a European Parliament hearing, after being pressed by MEPs to explain why the ECB had hidden its knowledge of a secret US anti-terrorist intelligence investigation, the Terrorist Finance Programme, from other EU authorities.
The EU is investigating alleged widespread privacy violations by the US investigation in the subpoenas it made for world-wide financial records held by the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the Belgian firm that handles instructions for most of the world's financial transactions.
Since being exposed by the New York Times in June, the US use of SWIFT has fuelled tensions in Europe over what is perceived to be the America's persistent violation of European civil liberties in its hunt for terrorists.
Those European organisations which complied with the secret US investigation without telling the EU have jumped on the crux of the transatlantic wrangle as a defence against the criticism levelled at them.
"I would say that there is a case for a clarification of the border of the interface between data protection and the fight against terrorism...at the global level," Trichet told a joint committee hearing before the European Parliament today.
He admitted to MEPs that it and the G10 central banks that make up SWIFT's oversight committee were told about the US subpoenas in February 2002. The banks kept schtum because they believed it wasn't their job to consider the privacy of SWIFT's data.
"The task of protecting personal data is outside of the remit of the Group's oversight function, since it is unrelated to the functioning of market infrastructure and financial stability," said Trichet.
But he was pressed by MEPs to consider the idea that data privacy was essential for financial stability. Should financiers think their transactions were being watched by US intelligence without any oversight, they might lose faith in the system.
"If we had an immense, totally tragic problem of data protection, perhaps it would entail some consequences in terms of financial stability," conceded Trichet.
"But we know that terrorist activities have an impact on financial stability, because we experienced 9/11," he added.
The defence the financiers used was that they had not broken any European privacy law by co-operating with the US investigation. If the EU authorities were upset, perhaps they ought to look at the legislation. Perhaps global data protection legislation was needed to deal with global transfers of data like those handled by SWIFT?
Francis Vanbever, chief financial officer of SWIFT, went as far as to say that data protection legislation was out of date because it had been introduced in 1995, long before the current war between the US and disenfranchised Muslims.
But it was noted that the powers the US has used to get hold of SWIFT's data were attained in the 1970s. And EU data protection chiefs claimed existing law was adequate to deal with the situation. They just had to decide what to do.
Both the the European Commission and the Article 29 Committee, which advises the European Parliament on data protection issues, were still making their minds up. SWIFT had been found in breach of Belgian data protection laws last week, but the Belgians decided not to prosecute. They understood how SWIFT was stuck between the US intelligence rock and the EU privacy hard place.
The Europeans might not be so understanding. They accused both the ECB and SWIFT for trying to shirk their responsibilities for the privacy breaches of their clients' data.