ECB says politicians must resolve legal conflict on transfer of bank data to US

ECB says politicians must resolve legal conflict on transfer of bank data to US

	Published : Thu, 01 Feb 2007 14:09 By : Agencies Print this Story

FRANKFURT (AFX) - The European Central Bank said it is up to EU politicians to resolve an apparent conflict between US and European law on the handover of EU banking data to the US authorities.

The US Treasury subpoenaed the Society for Worldwide Interbank Financial Telecommunication (SWIFT) to hand over EU banking data to the US authorities as part of the fight against terrorism in the weeks after the Sept 2001 attacks on New York.

The ECB and G10 central banks sit on an oversight group which monitors the activities of SWIFT, and the handover of the banking data has prompted concerns about data protection in the EU.

SWIFT is a financial cooperative based in Belgium which handles international transactions for nearly 8,000 financial institutions in more than 200 countries.

'The issue at stake requires action by the EU legislator, namely to provide legal certainty in areas where data protection might conflict with legislation on the fight against terrorism,' the ECB said in a statement.

ECB president Jean-Claude Trichet also wrote letters on the issue to Percenche Beres, chairwoman of the European Parliament economic and monetary affairs committee, and Jean-Marie Cavada, chairman of the parliament's civil liberties, justice and home affairs committee.

Trichet said the central bank itself has no role in determining the balance to be struck between data protection legislation and the fight against terrorism.

'We are aware that this issue has the attention of the European Parliament, the Council and the Commission. However, as the matter is outside the competence of the ECB, it can only wait for the outcome of this process,' he wrote.

The EU authorities responsible for data protection legislation and for the fight against terrorism urgently need to coordinate their approaches to the US government on the issue, he added.

The ECB said that in future it will seek explicit consent from its counterparties for the storage of data when it uses SWIFT services for payment transactions.

But it said it will not be able to process orders if this consent is not given.

'Payment orders from natural persons who do not consent to the use of SWIFT cannot be processed,' it said. 'The ECB has investigated possible alternatives to using SWIFT services and has had to conclude that at this stage no feasible alternatives...are available.'

It also said that central banks cannot take over the job of overseeing compliance with data protection laws in SWIFT transactions.

The central banking oversight group which monitors SWIFT is only responsible for ensuring that it functions effectively and poses no risks to financial stability, it said.

'The monitoring of SWIFT activities that do not affect financial stability is not a matter for central bank oversight,' the ECB said.

'The request by the European Data Protection Supervisor to bring data protection compliance within the remit of central bank oversight would not be in line with the allocation of legal responsibilities,' it said.

steve.whitehouse@thomson.com

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