EU urges banks to protect clients' details

Data protection commissioner Billy Hawkes has asked the Central Bank and high-street banks to stop breaking EU law when they transfer data on customers.

In a letter sent to the Central Bank and the Irish Bankers' Federation, the body representing many of the 77 Irish banks that use the money transfer system run by the Belgian firm Swift, Mr Hawkes has proposed a meeting to discuss how they can bring their practices into compliance with data protection law.

This follows an opinion issued in Brussels on Wednesday by the EU watchdog on data protection, which ruled that Swift and up to 7,800 banks that use its worldwide system are breaking the law by giving the US access to EU citizens' banking records.

The opinion stated that Swift and the European banks that use its system and are co-operative owners of the Belgian firm are jointly legally responsible.

Swift has said it had to provide the records to the US authorities when its US branch was handed a court order by a US judge. The subpoena was issued as part of the US administration's "war on terror" introduced after the September 11th terrorist attacks. The CIA and other security agencies sift through the money transfer records to try to identify possible sources of terrorist financing.

Swift and the European Central Bank (ECB) have been criticised by MEPs for failing to make public that it had agreed to hand over millions of private records. The Government only became aware of the transfer of records when a US newspaper published an article about it this year.

Despite the EU watchdog's opinion, Swift is still facilitating the transfer of EU citizens' personal banking data to the US authorities. Unless Swift and the banks that own the firm change their processes, it is possible that the EU watchdog's opinion will lead to legal action against them.

One option that could be considered by the Irish banks is to ask for the consent of customers to provide their banking data to the US authorities. However, if they refuse to provide this information, they may not be able to send money transfers.

Mr Hawkes, who sits on the EU data protection watchdog, said yesterday the watchdog's opinion was an important restatement of the principle that actions taken to combat terrorism and serious crime must be proportionate and respect the individual's right to data privacy.