WHAT’S NEW IN THE EU: EU-US agree on terror-finance tracking

The European Council last week adopted a declaration on the EU-US Agreement on the Transfer of Financial Messaging Data for purposes of the Terrorist Finance Tracking Program.

The European Council last week adopted a declaration on the EU-USAgreement on the Transfer of Financial Messaging Data for purposes ofthe Terrorist Finance Tracking Program (TFTP).
In June 2009 the European Commission presented draft negotiationguidelines for a short-term TFTP agreement to the European Council. Atthe end of July 2009, the European Council adopted negotiationguidelines for such an agreement, on the basis that in the absence ofsuch short-term agreement an important security gap would arise inwhich there would be a risk of losing the benefit of important leadsobtained through the TFTP from European financial transactions forfuture terrorism investigations.
As SWIFT (a Belgium-based company with offices in the United Stateswhich operates a worldwide messaging system used to transmit, interalia, bank transaction information) had clearly indicated that it wouldredesign its database at the latest by the end of 2009, it was seen asa mistake to wait for the entry into force of the Lisbon Treaty beforestarting the negotiations on such agreement.
The important value of the TFTP, a United States Treasury Departmentcounter-terrorism program, for member states’ investigation anddisruption of terrorism has been amply demonstrated, including in thesecond Bruguière Report which was provided to the European Parliamenton February 1, 2010.
Being aware of the entry into force of the Lisbon Treaty, the Council,when authorizing the signing of the agreement with the United States onthe processing and transfer of financial messaging data for thepurposes of the TFTP, decided that the agreement should have atransitional nature and should be applicable only for a very shortterm, having a maximum duration of nine months. This period is evenshorter than the maximum of twelve months that was called for in theEuropean Parliament’s Resolution of September 17, 2009.
The European Council also pointed out in its declaration that the shortterm agreement already contains an important number of the guarantees,which were called for in the European Parliament’s Resolution ofSeptember 17, 2009, as was requested during negotiations by memberstates.
The demands for a judicial authorization as well as for a “push” systemare also being complied with by the current short-term agreement.
The agreement clearly prohibits the use of any SWIFT data for purposesother than those linked to the financing of terrorism. The short-termagreement is, as the European Parliament had asked for, based on the2003 EU-US Mutual Legal Assistance Agreement, and at the same timeprovides for a significantly higher level of data protection than the2003 agreement. In addition, it provides a joint review (Article 10)ensuring a real control on the functioning of the TFTP Agreement, whichcan be launched at the simple request of the European Union.
As regards to a long-term EU-US TFTP agreement, the European Councilsays it shares the Parliament’s concerns regarding the need to strikethe right balance between security measures and the protection of civilliberties and fundamental rights, while ensuring the utmost respect forprivacy and data protection.
The European Council called on the Commission to adopt in Februarydraft negotiation guidelines that fully take into account the concernsexpressed by both institutions. It is of the opinion that a long-termagreement should contain strong guarantees concerning effectiveredress, the deletion of data and greater specificity regarding thesharing of TFTP-derived information with national authorities and thirdcountries.
The data protection safeguards already set out in the short-termagreement, such as the strict purpose limitation and the absoluteprohibition on data mining, will also feature prominently in any futureTFTP agreement. The European Council says it looks forward to the newsituation, which has been created by the Lisbon Treaty and to worktogether with the European Parliament, which needs to be informed fullyand immediately at all stages of the procedure. This will allow theEuropean Parliament to fully exercise it’s role provided in the Treaty,in order to achieve that the long-term TFTP agreement meets it’sconcerns regarding the protection of personal data, while ensuring thatthe TFTP can continue to provide EU member states with significant leadinformation to investigate and disrupt terrorism.
The European Council stated in its declaration that it understands theneed of the European Parliament to have easier access to the classifiedparts of international agreements in order to carry out its assessmentwhen it has a right of consent. In that perspective the EuropeanCouncil commits itself to negotiate an inter-institutional agreementwith the European Parliament on this issue.
Ari Syrquin is the head of the International Department at GSCB Law Firm.