16 TERRORIST FINANCES
(31170)
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| Draft Council Decision on the signing, on behalf of the European Union, of an
Agreement between the European Union and the United States of America on the
processing and transfer of Financial Messaging Data from the European Union to
the United States for purposes of the Terrorist Finance Tracking Programme
("SWIFT" Agreement)
|
| Legal base |
Articles 24 and 38 EU; —; unanimity |
| Department | HM Treasury
|
| Basis of consideration |
EM of 19 November 2009 |
| Previous Committee Report |
None |
| To be discussed in Council
| 30 November 2009 |
| Committee's assessment | Legally and politically important
|
| Committee's decision | Cleared
|
Background
16.1 Following the September 2001 terrorist attacks,
the United States Department of the Treasury developed a Terrorist
Finance Tracking Program (TFTP) to identify, track, and pursue
terrorists and their financial supporters. The TFTP uses payment
information carried by SWIFT (the Society for Worldwide Interbank
Financial Telecommunications), a Belgian company, which is the
world's main system for passing international payment instructions
between financial institutions. This information is provided on
the basis of an administrative subpoena requiring that the US
branch of SWIFT should provide the US Treasury with specified
financial transaction record data, which are stored in the United
States. This data is held by the US Government in a highly secure
database and is used exclusively for terrorist finance tracking
purposes.
16.2 These arrangements were disclosed in public
in 2006, and concerns were raised in the EU about the use made
of the information by the US and about the protection of personal
data. To address these concerns, the US Treasury gave a set of
unilateral undertakings, known as Representations, to the EU in
June 2007. These specified a series of commitments and safeguards
to ensure the protection of EU-originating personal data processed
under the TFTP and that the data would be used exclusively for
counter-terrorism purposes.[46]
16.3 The EU appointed an "Eminent European Person",
Judge Bruguière, to oversee the use of EU-originated payment
information by the TFTP. In December 2008 Judge Bruguière
presented his first annual report on the processing of EU originating
personal data by the US Treasury. This report concluded that the
US Treasury has been vigilant from the outset in respecting the
safeguards included in the Representations and notably the strict
counter terrorism purpose limitation. Judge Bruguière's
report also concluded that the TFTP has generated since its implementation,
and continues to generate, significant value for the fight against
terrorism both in the USA and beyond. Moreover the US Government
has readily shared this intelligence with third countries —
Member States being the principal non-US beneficiary of TFTP lead
information.[47]
16.4 Changes to the operation of the SWIFT system
from the beginning of 2010 will place most payment information
outside the scope of US administrative subpoenas. This would lead
to such information being unavailable to the TFTP, seriously impairing
its scope and coverage.
The document
16.5 This draft Council Decision is to authorise
the signing, but not the conclusion, of an agreement between the
EU and the US in order to allow transfer of SWIFT data to the
US Treasury for the purposes of the TFTP. The agreement would
make financial payment messaging data stored in the EU available
to the US, subject to strict compliance with safeguards for the
protection of personal data and is intended to maintain the availability
of data stored in the EU to the TFTP and so ensure that the TFTP
continues both to have coverage of all regions and to support
counter-terrorism authorities in the US and EU.
16.6 The agreement would:
- enable the US to request financial payment messaging
data from designated providers in the EU;
- have data protection safeguards based on those
contained in the Representations, but strengthened;
- include controls on the purposes for which EU-origin
payment information may be used (which is limited to the prevention,
investigation detection or prosecution of defined terrorist activities),
the manner in which information may be used (which limits access
to cleared personnel, requires a reason to believe the subject
of a search has a connection to terrorism and prohibits data-mining
techniques) and protection of personal data;
- require the US to provide information originating
from the TFTP to counter-terrorism authorities of concerned Member
states; and
- strengthen review arrangements to monitor US
compliance with these requirements to include two Member State
data protection authorities.
16.7 The agreement would be a temporary solution
designed to last for no more than a year. The Commission intends
to make a Recommendation regarding a long-term agreement in early
2010. Although this temporary agreement would be signed before
the Lisbon Treaty takes effect, it would be concluded under the
Article 217 of that Treaty and would require the assent of the
European Parliament. The European Parliament's Civil Liberties,
Justice and Home Affairs (LIBE) Committee has welcomed the efforts
to secure an agreement with the US, in particular in relation
to data protection.
The Government's view
16.8 Although there is not yet a text of the draft
Decision available to us the Exchequer Secretary to the Treasury
(Sarah McCarthy-Fry) offers us comment on the proposal. First
she says, recalling that the Eminent European Person's report
on the TFTP concluded that the programme has generated since its
implementation, and continues to generate, significant value for
the fight against terrorism and that the US Government has readily
shared this intelligence with third countries — Member States
being the principal non-U.S. beneficiary, that the Government
endorses the assessment that the TFTP is a valuable and important
counter-terrorist tool. The Minister comments further that:
- information originating from the TFTP is provided
by the US to the UK and to other Member States and is a valuable
source of information for counter-terrorist authorities;
- the continued availability to the TFTP of payment
messaging information from all regions of the world is important
to maintaining its coverage and in particular to maintaining the
value of TFTP-generated information to the UK and EU; and
- the Government would therefore like to see the
TFTP continue to have access to payment messaging information
from EU-based providers.
16.9 The Minister continues that the proposed agreement
would not significantly change current practice. Its main effects
would be to enable the TFTP to continue, following the change
in the payment systems architecture, and to formalise and strengthen
the safeguards applied to it, including on how and for what purposes
the data would be used, the reciprocal provision of information
to EU counter-terrorism authorities and the protection of personal
data.
16.10 The Minister tells us that the data would be
sought and transferred in line with the EU-US Agreement on Mutual
Legal Assistance in criminal matters (MLA) and the relevant Member
State (Belgium)'s bilateral treaty with the US. But she adds that:
- one deviation from standard MLA procedure is
that if the relevant data could not be identified by the "Designated
Provider" in the relevant Member State all potentially relevant
data might be transmitted in bulk to the US;
- current practice in the UK would not allow such
a transfer to happen;
- however, given that the UK is not the relevant
Member State in the proposed agreement, and given its temporary
nature, this may not give rise to immediate or direct concerns;
- other Member States will have different legal
provisions in place that might allow them to comply;
- the preamble to the proposed agreement states
that it does not constitute a precedent regarding the processing
and transfer of financial payment messaging data;
- nonetheless, given the data transfers envisaged
by the agreement and the specific reference to the MLA contained
therein there is a clear risk that it would be more difficult
for the UK to refuse a similar request from the US in the future
given that a precedent would in fact have been set; and
- this could, therefore, have an effect on UK MLA
practice.
16.11 Finally the Minister says that it is the Swedish
Presidency's intention that the draft Council Decision on signing
be adopted, and the agreement be signed, on 30 November 2009.
Conclusion
16.12 Given the Government's endorsement of the
assessment that the TFTP is a valuable counter-terrorist tool,
the data-protection safeguards built into the proposed agreement,
its temporary nature and that a more permanent agreement would
be subject to greater democratic scrutiny, we can merely note,
whilst clearing the document, the Government's support for the
draft Council Decision, despite its reservation in relation to
the operation of the MLA.
46 For the exchange of letters about the representations
see http://eur-lex.europa.eu/JOHtml.do?uri=OJ:C:2007:166:SOM:en:HTML,
pages 17-17. Back
47
The report has not been published, but for a Commission announcement
about its findings see http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/264&format=HTML&aged=0&language=EN&guiLanguage=en.
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