Feeds

ECB blamed (again) for SWIFT privacy debacle

Bank tries to pass the buck

Secure remote control for conventional and virtual desktops

Privacy authorities are holding the European Central Bank (ECB) to account for its failure to protect European interests from an invasion of privacy when US agents were searching for terrorist financiers.

Two months ago, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) was found to be in breach of data protection laws by the Article 29 Working Party, an advisor to the European Commission, for passing details of the international financial transactions it handles to US agents.

An opinion of the European Data Protection Supervisor (EDPS), published today, found that the ECB should be held jointly responsible for SWIFT's failure to ensure that its co-operation with a secret US investigation into terrorist finances complied with European privacy laws.

In a written statement, Peter Hustinx, European Data Protection Supervisor, said: "Just as other banks, the ECB cannot escape some responsibilities in the SWIFT case which has breached the trust and private lives of many millions of people. Secret, routine and massive access of third country authorities to banking data is unacceptable."

The EDPS said the way in which the ECB used SWIFT's services made the pair, in legal parlance, joint "data controllers". The ECB therefore bore responsibility for keeping its financial data private. It gave the ECB until April to demonstrate that it complies with data protection laws.

The ECB replied with a statement that said data protection was somebody else's concern. It said its primary concern was financial stability. Though it sat on SWIFT's oversight board with other central banks, that role merely gave it responsibility for the transaction agent's technical and operational competence.

"The monitoring of SWIFT activities that do not affect financial stability is not a matter for central bank oversight and, therefore, the US Treasury subpoenas of SWIFT were outside the purview of central bank oversight. The Oversight Group has no authority to oversee SWIFT with regard to compliance with data protection laws," it said.

National data protection authorities are also looking into the why their banks - both central and private - let SWIFT share data without adhering to data protection law.

Belgian authorities already found that SWIFT acted illegally, but let it off because it did its best in a difficult situation. The central banks, however, appears to be fair game.

The EDPS can take punitive action against the ECB if it does not cooperate. But its options are limited. It might, for example, prevent the ECB from using SWIFT's services, but the international banking system has no credible alternative.

So the ECB is unapologetic. It said legislators ought to make their guidance clearer. The bank said it would ask the consent of those organisations for whom it conducts transactions before sharing their data, but it offered little comfort: "Payment orders from natural persons who do not consent to the use of SWIFT cannot be processed...[because] no feasible alternatives are available."

The EDPS also asked politely that the ECB ensure that it ships data to foreign third parties like US investigators only when it can guarantee that the transfer will not result threaten the privacy of the people who own the data.

The ECB applauded the joint initiatives of the US and EU data protection authorities, financial regulators and intelligence agencies to find an appropriate place to monitor the behaviour of an international organisation like SWIFT. ®

The essential guide to IT transformation

More from The Register

next story
Hello, police, El Reg here. Are we a bunch of terrorists now?
Do Brits risk arrest for watching beheading video nasty? We asked the fuzz
UK fuzz want PINCODES on ALL mobile phones
Met Police calls for mandatory passwords on all new mobes
Munich considers dumping Linux for ... GULP ... Windows!
Give a penguinista a hug, the Outlook's not good for open source's poster child
EU justice chief blasts Google on 'right to be forgotten'
Don't pretend it's a freedom of speech issue – interim commish
Detroit losing MILLIONS because it buys CHEAP BATTERIES – report
Man at hardware store was right: name brands DO last longer
Snowden on NSA's MonsterMind TERROR: It may trigger cyberwar
Plus: Syria's internet going down? That was a US cock-up
UK government accused of hiding TRUTH about Universal Credit fiasco
'Reset rating keeps secrets on one-dole-to-rule-them-all plan', say MPs
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
e-Borders fiasco: Brits stung for £224m after US IT giant sues UK govt
Defeat to Raytheon branded 'catastrophic result'
Yes, but what are your plans if a DRAGON attacks?
Local UK gov outs most ridiculous FoI requests...
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.