SWIFT stalled EU probe of US snooping

European authorities squaring up to the US over its secret surveillance of international financial records were caught off-guard when the firm caught in the middle of the tussle failed to volunteer key evidence.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) was called before EU privacy watchdog the Article 29 Committee on 23 August to reassure them that its co-operation with a secret US hunt for terrorist financiers had not broken data protection laws.

The Terrorist Finance Tracking Programme had offended EU sensibilities, and possibly law, by trawling through the international financial records that SWIFT handled on behalf of 7,800 private firms.

The European authorities called upon SWIFT, a Belgian firm that holds worldwide financial data in the US, to prove that its co-operation with the US investigation had not offended EU privacy laws. But after meeting on 23 August they were none the wiser.

"SWIFT haven't been forthcoming in giving people information," said an EU source after the meeting.

To be fair to SWIFT, it was stuck between a rock and a hard place. Indeed, the Belgian firm has become proxy for a test of wills, and authority, between US intelligence services and the EU privacy regulators.

The Belgian data protection authority is leading the investigation of complaints made in 33 countries, by campaign group Privacy International, that the Americans peeked at millions of financial records that had nothing to do with terrorism.

For the EU to feel confident that SWIFT had not betrayed home rules, and that the US hadn't stuck its nose where it was not warranted, it had to review the subpoenas by which the US has gained access to SWIFT's records for the last five years.

Yet if SWIFT gave this information up, it would offend the US intelligence services. If it didn't give the information up, it would offend the EU authorities.

To its credit, SWIFT managed to get the US to restrict its snooping, as well as having it audited by its own people.

SWIFT claimed this was enough to make sure that only those financial records the US Treasury thought might have something to do with terrorist finance were opened. SWIFT won these concessions at an unspecified time after the first US subpoenas arrived in late 2001. So, it is fair to ask, was the US operating without oversight for two weeks or five years?

The Belgian firm insists it has protected the privacy of its customers and has not broken EU law.

But its arrangement was struck in secret with the US and its assurances were not good enough for the Europeans.

They wanted to see evidence that the checks it imposed on the Treasury were adequate under EU privacy law, and that the audits were sufficient to ensure those checks were honoured when the US went snooping private financial records.

They did not get what they wanted. The EU source told The Register after the meeting that this left them unable to form the opinion they had intended to on whether the US had stepped on their toes.

"It depends on the nature of the audits. That's nothing we have any information on. Any organisation can turn round and say we've got audits, checks and balances," said the EU source.

And SWIFT has no doubt done all it can in the small space it has. But the spokesman refused to say whether it had declined to hand the EU evidence that its checks were adequate and its audits sufficient under EU law.

"We welcome the opportunity to explain how our compliance has been legal, limited, targeted, protected, audited and overseen. We have provided comprehensive responses to these reviews," is all a SWIFT spokesman would venture.

The authorities would demand this information if SWIFT failed to volunteer it, said another EU source. Will the US let them?®