Tuesday, September 26, 2006

EU Questions "Sharing" of SWIFT Data

The Europeans probably suspect that the Americans might use this data for non-"counter terror" related purposes.

They don't realize that the U.S. would never do anything questionable.

Especially when dealing with financial matters.

A European Union panel has serious doubts about the legality of a Bush administration program that monitors international financial transactions, the group's leader said Monday, and plans to recommend tighter controls to prevent privacy abuses.

"We don't see the legal basis under the European law, and we see the need for some changes," said Peter Schaar, a German official who leads the panel, in a telephone interview. The group is to deliver a final report this week in Brussels, and Mr. Schaar said he expected it to conclude that the program might violate European law restricting government access to confidential banking records.

The program, started by the Bush administration weeks after the Sept. 11 attacks, allows analysts from the Central Intelligence Agency and other American intelligence agencies to search for possible terrorist financing activity among millions of largely international financial transactions that are processed by a banking cooperative known as SWIFT, which is based in Belgium.

The European Union panel will not call for the program to be stopped, officials said. But it is expected to recommend that additional safeguards be put in place to check how financial records are shared with American intelligence officials. For the last three years, a Washington consulting firm, Booz Allen Hamilton, has audited the program, but Mr. Schaar said his panel would recommend that an outside auditor from Europe be brought in to protect against abuses. ...

Critics, including many privacy advocates and some banking industry executives, have questioned the propriety of giving American intelligence officials broad access, without court orders, to private data.

The disclosure of the program prompted several investigations in Europe and Canada. The European Union panel, which includes representatives from 25 countries and is formally known as the Article 29 data protection working party, would be the first international group to weigh in on the legal issues. Its findings, while advisory in nature, are expected to carry considerable influence in Europe in the debate over the program, officials say.

The European Union panel begins meeting in Brussels on Tuesday, and Mr. Schaar said he expected it would adopt a report based on a draft that has already been circulated among the members. While he would not discuss the exact language because it had not been finalized, he said the report would be "critical" of the legal basis for the American government's use of the SWIFT data. ...

The Treasury Department has used broad administrative subpoenas to get access to transactions from SWIFT, often millions of records at a time. While a small proportion of the transactions route money entirely within the United States, the program is focused on tracking money coming into and out of the United States or foreign-to-foreign transactions. American officials say the intelligence gleaned from the transactions has been valuable in identifying possible terrorist financiers. ...

(L)egal experts say banking privacy restrictions imposed by the European Union and others in Europe impose tight restrictions on how private banking data can be shared, even in the course of law enforcement and intelligence-gathering investigations.

"The main item from my point of view is that the fundamental civil rights of the European citizens have to be safeguarded," said Mr. Schaar, who also serves as the federal data protection commissioner for Germany. "There are doubts about the legality of this program."

As part of the European Union panel's review, Privacy International and the American Civil Liberties Union prepared a report criticizing Booz Allen's role in monitoring the program. The report raised questions about the firm's objectivity, citing its long history as a government contractor and the fact that former intelligence officials are among its executives.

But Booz Allen rejected such charges on Monday. "What clients are buying from us," said Marie Lerch, a spokeswoman for the firm, "is independence and objectivity."


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