By Mark Ballard for The
Register.
This story has been reproduced with permission.
In open defiance of European privacy officials, the Society for
Worldwide Interbank Financial Telecommunication (Swift), has
declared that it has applied to the US Federal Trade Commission
(FTC) for 'safe harbour' protection for the data it holds on US
soil.
Swift had handed data containing the details of private
international financial transactions to US terrorist finance
investigators under a secret arrangement since late 2001. Since the
transfers came to light last June, Europe's data protection
authorities have declared that Swift is a data controller and, as
such, it should take responsibility for the privacy of the data it
administers for its banking clients.
Swift claims it is not a controller, but a mere processor and
cannot be held responsible for what European authorities say is the
illegal transfer of data to US Treasury agents.
A Swift spokesman told The Register: "We are
working on what the Americans call safe harbour to make SWIFT
comply with EU legislation – that is a process Swift has started
with the US government."
"We have received confirmation that we come under the
distinction of the FTC and we are therefore eligible for safe
harbour," he said.
"The reason we are doing this is to address the claims from the
data protection commissioners that Swift is a controller of the
data. Our interpretation of the law was that we are a processor,"
he said.
Another point of contention between Swift and the European
authorities is whether it is a financial organisation. Swift
maintains that it a mere messaging service, as it only handles
messages that facilitate the international transactions of banks.
Hence, it can apply for safe harbour. If the FTC has indeed told
Swift it is eligible for safe harbour protection, that could imply
that it also accepts its assertion that it is a mere messaging
service – financial institutions are not eligible for safe harbour.
Yet the Europeans maintain that Swift a financial institution.
Accordingly, the spokesman said this was a "really, really
complex" legal matter – "it's like splitting hairs in four".
An officer of one of the European data protection offices said
he knew that Swift was considering safe harbour, but that it
wouldn't be enough to satisfy the authorities: "Safe harbour makes
data safe once it's transferred, but it doesn't make the transfer
legitimate."
According to European regulators, the only way for Swift to
avoid infringing data protection law would be to pull its data out
of the US. Meanwhile, both sides insist they want to work together
to find a solution and they are pinning their hopes on the US and
EU agreeing an overarching
instrument that would satisfy both anti-terror investigators on the
West-side of the pond and data protection wonks on the East.
The FTC was not available for comment
© The Register
2007
