The Washington Post - Sep 29, 2006
http://www.washingtonpost.com/wp-dyn/content/article/2006/09/28/AR200...

Belgium Rules Sifting of Bank Data Illegal

PM Says SWIFT Group Wrongly Cooperated with US Anti-Terrorism Effort

By John Ward Anderson
Washington Post Foreign Service

PARIS, Sept. 29 -- A secret U.S. program to monitor millions of
international financial transactions for terrorist links violated
Belgian and European law and will have to be changed, the Belgian
government said Thursday.

The decision, announced by Prime Minister Guy Verhofstadt, came as the
country's Data Privacy Commission released a 20-page report finding that
the Belgium-based Society for Worldwide Interbank Financial
Telecommunication, or SWIFT, had improperly turned over data from
millions of global financial transactions to U.S. anti-terrorism
investigators.

"It has to be seen as a gross miscalculation by SWIFT that it has, for
years, secretly and systematically transferred massive amounts of
personal data for surveillance without effective and clear legal basis
and independent controls in line with Belgian and European law," the
report says.

Leonard H. Schrank, SWIFT's chief executive, said in a telephone
interview that the cooperative "believes we complied with everything and
respected to the fullest extent possible the privacy law in Belgium. But
the trouble is data privacy laws in Europe are quite difficult to
follow. They're not drafted for national security issues."

SWIFT said in a statement that it had relinquished data to the U.S.
Treasury Department only after it had been "subject to valid and
compulsory subpoenas" from U.S. authorities.

The Belgian ruling is the latest in a string of European complaints
about how the United States is conducting global operations against
terrorism. European governments, politicians, human rights groups and
citizens have also criticized the treatment of inmates at the U.S.
prison at Guantanamo Bay, Cuba, the operation of secret prisons by the
CIA -- including some reportedly in Europe -- and the CIA's
extrajudicial transfers of terror suspects.

Europeans tend to support strong efforts against terrorist groups --
many of their countries have terror cells within their borders, and two,
Britain and Spain, have suffered major attacks on their transit systems.
But many Europeans believe that U.S. policies go too far and fuel
radicalism in the Muslim world.

Belgian authorities announced no plans for legal action against SWIFT,
which conveys funds among 7,800 banks in 206 countries and territories.
Verhofstadt called the anti-terrorist monitoring "an absolute necessity"
and said U.S. and European negotiators should find a way to bring it
into compliance with European law.

Asked about the Belgian ruling, U.S. Treasury spokeswoman Molly
Millerwise said in an e-mail that the department was "mindful of privacy
concerns and for that very reason implemented significant safeguards"
for what the department calls the Terrorist Finance Tracking Program.

"The U.S. Treasury Department welcomes the suggestion of the Belgian
government to engage in greater dialogue at an EU level on how to make
the [tracking program] a more cooperative effort. The dialogue is
already underway with our European counterparts; such cooperation can
only further our common goals," Millerwise said.

Schrank added, "The message today is that there is a recommendation at
long last that says, let's get the E.U. and the U.S. sitting down to get
a framework for dealing with national intelligence and counterterrorism
and the concerns of data privacy. Border security and data privacy are
drawn different in every country, and the politicians have to draw the
line."

None of the network's banks had made a privacy complaint in connection
with the program, he said. "No one that I am aware of has been harmed in
any way. . . . Thousands of lives have been saved" as a result of the
program, he said. "Let's not forget that."

The Bush administration has called its secret international banking
surveillance program a vital tool in uncovering terrorist networks. When
newspapers first reported the program's existence in June, President
Bush called the disclosure "disgraceful."

The program was begun without congressional or court approval shortly
after the attacks of Sept. 11, 2001. With SWIFT's cooperation, U.S.
investigators tapped records from the cooperative's banks, a total of
millions of transactions, looking for suspicious patterns and links to
terrorists.

A SWIFT spokesman said Thursday that "the status of the program is
unchanged."

A European Union working group that oversees data protection is
investigating SWIFT's transfers of data and is to release its report in
November. After a meeting this week in Brussels, the group said it has
"immediate concerns about the lack of transparency which has surrounded
these arrangements."

Verhofstadt said SWIFT was "in a conflicting situation between American
and European laws." But he said the cooperative "made several evaluation
mistakes during the executing of the American subpoenas. From the very
beginning, SWIFT should have been aware that fundamental European laws
should also be respected."

The prime minister added, "Fundamental differences exist between the
E.U. and the U.S.A. concerning legislations and the principles governing
the treatment of personal data, mainly in the domain of the level of
protection, which is higher in Europe. . . .

"SWIFT is also clearly responsible because they made all the crucial
decisions regarding data communication" to the U.S. Treasury, "behind
the back of its 7,800 clients."

The report faulted SWIFT for not notifying European authorities of the
program from its inception.

SWIFT said its "compliance was legal, limited, targeted, protected,
audited and overseen." It added, "SWIFT also did its utmost to comply
with the European data privacy principles of proportionality, purpose
and oversight."

[Staff writer Dafna Linzer in New York and researcher Corinne Gavard in
Paris contributed to this report.]

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