The European Commission is expected to keep its promises on SWIFT by proposing a negotiating brief to the Council of Ministers by the end of March, or more exactly on 24 March, according to several sources. Once the text has been tabled, it will have to be approved by the member states (possibly with certain amendments to the text). And if, as the Spanish EU Presidency hopes, the 27 member states reach agreement “as quickly as possible,” the EU-United States negotiations could then begin to find a suitable solution for renewing the Terrorist Finance Tracking Programme (TFTP), which has been in existence for eight years and allows the US Treasury access to European banking data held by the privately-owned company SWIFT, whose head office is near Brussels, as part of the counter-terrorism drive.

After the resounding ‘no’ vote at the European Parliament on an interim agreement, there followed a stand-off period, during which the Americans, according to the Swedish Commissioner for Internal Security, Cecilia Malmström, were unwilling to negotiate. Dialogue has now resumed and both parties seem to be ready to negotiate the new text.

Meanwhile, there have been significant changes in Europe, which the Americans will have to accept. With the ratification of the Lisbon Treaty, the European Parliament has become an actor in its own right in international negotiations and has the right to use its veto, which could seriously impact agreements negotiated by the EU.

MEPs have now assumed the role of diplomats and bearers of good news. “The Obama administration has accepted the concerns of MEPs about the protection of fundamental rights,” announced Martin Schulz, leader of the European Socialists’ group after a visit to Washington, from 15 to 17 March. During its visit, the Socialist delegation met with members of the US administration, including Deputy Secretary of State James Steinberg. “Our counterparts agreed to include the protection of fundamental rights in a new agreement on condition that they are compatible with American law or to look for a solution,” explained Schulz before adding that Washington has no intention of signing bilateral agreements (with Belgium, where SWIFT has its headquarters and Holland, where the central server storing European data is situated). The United States wants an agreement “with the EU as a whole”. Moreover, concluded Schulz, the parties are now ready to accept that the previous negotiations “were marked by the anti-terrorism philosophy followed by the Bush administration”.

Europoliticshas taken the opportunity to review the ‘SWIFT debate’, along with other hot issues pertaining to the protection of data on European citizens, in this edition of Insight. An article is dedicated to the agreements on transferring information given by passengers to airline companies to the United States and Australia (passenger name record, PNR). Another looks at the plans to introduce body scanners at airports – although the subject does not form part of an agreement, it is symptomatic of the differences in opinion between the EU and the United States with regard to the importance of private life and privacy.

“HISTORIC MOMENT”

For years, MEPs have been championing the protection of private data, in word and in practice, as illustrated by their rejection of the nine-month SWIFT interim agreement in mid-February, maintaining that they were not satisfied with the arguments put forward by the Council and the Commission by which the EU would negotiate a more protective, long-term agreement at a later date. The EP also highlighted that the 2003 mutual assistance agreement, which entered into force on 1 February, allowed Americans access to European data.

The EP also found it unsatisfactory that it had not been consulted during negotiations, particularly since it was signed by the Council, on 30 November 2009, the eve of the entry into force of the Lisbon Treaty, whereby the EP was granted the power of veto. Currently, there is nothing to prevent it from rebelling if it feels that its positions are not fully respected in future important agreements.

The SWIFT vote produced diametrically opposed reactions. The Americans described it as a step “backwards” in their anti-terrorist cooperation with Europe, while the leader of the Liberals at the European Parliament, Guy Verhofstadt, described it as a “historic moment” in which “the Parliament showed that as an institution it was on an equal footing with the Council”. The Commission, for its part, immediately said it would start work on a new agreement.

Under the new provisions of the Lisbon Treaty, it is the EU executive that will conduct the talks with the US Treasury Department. It will work against the backdrop of the European Parliament’s demands on protection of personal data. The Commission is therefore expected, on 24 March, to present more protective proposals for a new agreement.

Some 90% of Parliament’s demands will be incorporated into the draft negotiating brief, according to information obtained by Europolitics. The two commissioners, Cecilia Malmström (home affairs) and Viviane Reding (justice and fundamental rights) drafted it together, although Malmström is playing the lead role. On what content? The EP rejected the interim text because “many important elements of data protection are lacking or not clearly defined in the agreement,” including the duration of data storage, sharing with third countries and individuals’ right to seek redress, notes a statement by the Parliament.

However, the possibility of legal proceedings by Europeans in the United States is simply out of the question today: only US residents can lodge an action before an American court, note sources at the Commission and the EP. For Europeans to have access, the United States would have to change its laws, which is not very likely to happen, according to several observers. “There is the possibility of administrative proceedings,” notes a source at the Council. This option – open to everyone - consists, for instance in the case of a European citizen and SWIFT data, in requesting information on the data provided to the US Treasury Department. But the Americans could have to give more. That will probably be one of the strong points of the negotiation.

The possibility of legal proceedings by Europeans in the United States is simply out of the question today

Key dates

11 September 2001: Attacks in New York, which lead, notably, to the implementation by the US Treasury Department of the TFTP, allowing it access to banking data stored by the private company SWIFT 

June 2003: The EU and the US sign the Mutual Legal Assistance Treaty (MLAT), which allows the transfer of banking information between the two administrations in criminal investigations 

June 2006: The New York Times reveals the Terrorist Finance Tracking Programme (TFTP) 

June 2007: The US Treasury Department, in a letter, gives the EU guarantees relating to the protection of personal data when accessing SWIFT data 

30 November 2009: Council adopts interim agreement on the eve of the entry into force of the Lisbon Treaty, which gives the European Parliament the right of veto over international agreements 

31 December 2009: SWIFT reforms its architecture, with the result that Washington no longer has access to banking transactions outside the United States and so loses its access to precious information on the financing of international terrorism 

1 February 2010: June 2003 Mutual Legal Assistance Treaty (MLAT) enters into force 

11 February 2010: European Parliament rejects the interim SWIFT agreement by 378 votes against, 196 with 31 abstentions 

24 March 2010: negotiating brief for a new agreement to be proposed by the Commission