EU wants curbs on US tapping of SWIFT-Frattini

BRUSSELS, Feb 1 (Reuters) The European Union wants the United States to clearly limit its tapping of the SWIFT payment transactions network to the fight against terrorism, its top security official Franco Frattini said.

EU and Belgian data watchdogs said last year the international banking network SWIFT broke privacy laws by allowing the US Treasury Department to consult its records after the September 11, 2001, attacks on the United States.

SWIFT, which handles global financial transfers, is a cooperative owned by roughly 7,800 financial institutions in more than 200 countries that use it.

Frattini insisted on the importance of trans-Atlantic cooperation against terrorism and did not call on SWIFT to stop letting the United States tap into its system.

There are currently no alternatives to using SWIFT, the European Central Bank's head said in a letter to EU lawmakers worried by US tapping of SWIFT's records.

EU Justice and Security Commissioner Frattini told lawmakers that in conducting talks with Washington, the EU wanted to make sure that the US access to data be clearly confined to terrorism cases. He said he wanted to prevent the data from being used ''in an abusive fashion for the use of industrial espionage.'' The EU also wants the US Treasury Department to commit itself to limit its access to data to the transactions of persons suspected of terrorism, he said yesterday.

When the SWIFT tapping was revealed by media last year, US officials said it was limited to targeted transactions from targeted individuals.

Several EU lawmakers urged the bloc to do more to protect privacy. ''We cannot accept any kind of agreement that would legalise the current arrangements on a case by case basis,'' French socialist lawmaker Martine Roure said.

Dutch lawmaker Sophia In't Veld questioned whether telecommunication records and records of insurance companies were also being tapped.

Lawmakers also complained about lack of privacy protection in an interim EU-US agreement on sharing air passenger data.

Frattini and the German EU Presidency said talks on replacing the air data deal by a permanent one would be tough as Washington asked for more flexibility to use the data.

NO ALTERNATIVES ''The ECB has investigated possible alternatives to using SWIFT services and has had to conclude that at this stage no feasible alternatives are available,'' ECB President Jean-Claude Trichet said in a letter to lawmakers published yesterday.

Trichet said in the letter it was urgent the EU and the United States clarify the line between fighting terrorism and data protection, but that it was outside the ECB's remit.

''The main issue at stake is to find ways to reconcile EU and non-EU data protection legislation, as well as to maintain a proper balance between such legislation and the legal instruments applied in the fight against terrorism,'' he wrote.

EU lawmakers asked for the ECB to supervise SWIFT, but Trichet said that would not be possible, saying it was outside of its expertise and it had to respect its confidentiality obligations.

SWIFT is subject to both US and EU law as it has its operations in both regions.

Reuters SBA VP0452