The new rules come from the Article 29 Working Party, a
committee of European data protection officials, and it has said
that banks must inform customers when there is a danger that
transactions could be monitored by authorities in the US.
The recommendation comes in the wake of a controversy over the
fact that European inter-bank payment agency SWIFT was found to
have allowed US authorities access to transaction details. The US
claimed to need access in its counter-terrorism activities
following attacks in the US on 11th September 2001. They were given
access but account holders were not informed. SWIFT is a consortium
owned by its member banks.
"The Working Party took stock of the progress made by SWIFT and
financial institutions," said a statement from the Working Party
following a meeting last week.
"The Working Party met again with representatives of SWIFT, who
reported on progress achieved so far. The discussion with
representatives of European banking associations focused in
particular on the legal obligation of financial institutions to
provide appropriate information to their clients on the fact that
US authorities might have access to personal data when money is
transferred within the European Union," it said.
Data protection officials said that banks and financial
institutions had not yet gone far enough, and imposed a deadline on
them.
"Although progress has been made, further action is still
necessary to remedy the concerns the Working Party expressed
previously. For that reason the Working Party set the 1st September
2007 as the deadline for financial institutions to take all
necessary steps to improve the current situation," it said.
SWIFT has said that it felt obliged to comply with requests from
US authorities because some of its servers are located in the
US.
The handing over of transaction data has been criticised by the
Working Party and by privacy regulators. The Working Party said
that the move broke the privacy laws of the EU and of Belgium,
where SWIFT is located.
The Swiss and the Belgian data protection commissioners each
said that SWIFT had broken the law in passing details on without
telling the parties involved.
