SWIFT Agreement

In July 2010, the European Parliament approved a five-year agreement with the U.S. for the transfer of financial and other information collected by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) to the U.S.

SWIFT is a Belgium-based financial messaging company that operates a financial transfer network used by 8,000 financial institutions in over 200 countries. The network collects, stores and shares personal and financial information used to transfer funds electronically, including the names of account holders, bank account numbers of the transferee and transferor, destination of funds transferred, amount transferred, and the identity of the recipient of the funds. SWIFT controls 80% of the electronic funds transfers worldwide.

Following 9/11, the U.S. Treasury Department issued subpoenas to SWIFT seeking information on suspected international terrorists under its Terrorism Finance Tracking Program. In 2009, SWIFT stopped storing certain data on its U.S. servers and began hosting that data in the European Union. The U.S., SWIFT and the EU Parliament began negotiating for U.S. access to SWIFT data.

Pursuant to the SWIFT Agreement, financial payment messages and related data stored by SWIFT will be provided to the U.S. for the prevention, investigation, detection or prosecution of terrorism or terrorist financing. Similar data will also be provided to EU law enforcement agencies. The U.S. must supply Europol with copies of any requests for certain data. Europol will be required to confirm requests before the data which is the subject of the requests can be transferred. The use of the data will be supervised by a group of independent inspectors, one of whom must be appointed by the EU. The inspectors can seek justification for certain data uses and searches by the Terrorism Finance Tracking Program.The EU Parliament will set up an EU-equivalent to the Terrorism Finance Tracking Program within a year that will take over counter-terrorist prevention activities for EU-generated data.

The SWIFT Agreement has been criticized by some in Europe for not protecting the privacy interests of EU citizens and recently, the U.S. decision to introduce anti-terrorism reporting regulations for cross border transactions may mean that the U.S. is able to obtain much of the SWIFT information without relying upon the SWIFT Agreement.