SWIFT has been heavily criticised for allowing US authorities
access to records of banking transactions involving European
citizens. It was revealed by The New York Times last year that US
intelligence agencies were allowed to view Europeans'
transactions.
SWIFT argued that it was obliged to comply with US orders
because it carried out hosting and processing of information in the
US. European data protection officials have condemned the release
of the information. European, Swiss and Belgian data protection
authorities all ruled that SWIFT had broken data protection laws in
supplying the information without informing bank customers of the
US surveillance.
Europe's advisory committee of privacy watchdogs the Article 29
Working Party has revealed that SWIFT is being reorganised to
lessen the risk of surveillance, but not until 2009.
"The Working Party has been informed of recent measures taken by
SWIFT with regard to transparency, as well as its decision to
restructure its network," said a statement from the Working Party
recounting the business of its meeting last week.
"The new structure foresees by the end of 2009 the creation of a
new operation centre in Switzerland. This means personal data in
intra-European transactions will no longer be processed in the US
operating centre," said the body.
Brussels-based SWIFT is still under investigation by the Belgian
Data Protection Authority for potential breaches of data protection
legislation.
The European Commission agreed a deal with the US earlier this
year on how much SWIFT data US authorities could use.
"The EU will have now the necessary guarantees that US Treasury
processes data it receives from Swift's mirror server in USA in a
way which takes account of EU data protection principles," said EU
Commissioner for justice, freedom and security Franco Frattini in
June. "I welcome the United States' Treasury Department's
unilateral representations and the opportunity the Treasury has
given the European Union to have its views and concerns duly
reflected in the representations."
Even after the new operations centre is built, transactions with
a US element wills till be processed in the US, and there is
uncertainty about the location of processing of other kinds of
transaction, the Working Party said.
"EU-US transactions will continue to be processed in the US," it
said. "With regard to other international transactions involving
both EU and non-EU banks the location of their storage is still to
be defined."
The group said that it approved of the changes in SWIFT. "The
Working Party welcomes the clear progress made by SWIFT, especially
on technical aspects of compliance with data protection
principles," it said.
