EU approves US data transfer deal

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The European Union has approved a deal allowing the Swift international bank transfer network to show US investigators details of transactions.

European and Belgian watchdogs say Brussels-based Swift has been violating privacy rules since it started sharing the data after the 9/11 attacks.

The new deal says the US can only use the data to fight terrorism, and can only hold it for five years.

A senior European official will also monitor how the data is used.

Secret operation

BANK DATA CONTROVERSY A Belgian money transfer firm, Swift handles 11m transactions per yearUS agencies subpoenaed Swift to provide transaction data to help disrupt terrorist financingThe company has more than 7,500 clients, most of them global financial institutionsIt operates in 200 countries, including BurmaIn November, the European Commission told Swift to stop violating EU privacy laws The deal is expected to be rubber-stamped by ministers on Thursday, after agreement among ambassadors.

The US says it needs the information, such as customer names, account numbers and amounts transferred, to crack down on funding for to terrorist cells.

Swift says it was obliged to obey US subpoenas to share the data, and denies breaking data protection rules.

The system operated secretly until it was exposed in summer 2006.

In February, European Data Protection Superviser Peter Hustinx said Swift had "breached the trust and private lives of many millions of people".

He also accused the European Central Bank of failing to demand a halt to the data transfers.

Airline passengers

Swift announced earlier this month that had decided to change its systems so that data on transfers within Europe would only be stored in Europe, and not mirrored in the US, as it is at present.

The consortium's board is expected to approve final details of the plan in September, and it will then take three to four years to put the new system in place.

EU and US officials are also holding talks on the terms of a new deal to transfer private data on air passengers to US authorities.

An existing deal obliging airlines to transfer 34 pieces of information on each passenger to US authorities runs out at the end of July.