Europe Agrees Financial Data Sharing Deal with US

On the eve of the Lisbon treaty coming into force, the European Union agreed a controversial deal to share financial data with the US. Photo by BGNES

The European Union has approved a controversial financial data-sharing agreement with the United States.

The deal, agreed on Monday, will allow US justice authorities to access data from SWIFT*, a cooperative of banks and other financial institutions that facilitates trillions of dollars in daily international transactions. Its members include almost 8,000 financial institutions in more than 200 countries.

SWIFT is based in Brussels and has a server in the US, but a plan to move data servers to the Netherlands and Switzerland at the end of the year would have cut off US officials' ability to access such information.

The existence of the US server had allowed American authorities to use American anti-terror laws to access European transaction data. EU law would have barred such access had the servers been on European soil.

Germany, Austria, Greece and Hungary abstained from voting, citing national concerns about the possibility that personal information could be passed on to third parties from the US.

However, the agreement states that the US will not be allowed to share European data with third countries, and transactions between EU countries will not be monitored. The initial agreement will last for nine months, taking effect February 1, 2010, with plans to draw up a longer-term agreement when it expires.

The timing of the deal had irritated the EU parliament because it was signed one day before the Lisbon Reform Treaty, which would have given them equal decision-making powers, came into effect.

* Society for Worldwide Interbank Financial Telecommunications

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