Henry Farrell on SWIFT Story Fallout

Henry Farrell of Crooked Timber sees the possibility of a snowballing European reaction to the SWIFT banking data story. His post is a bit long but informative and well worth reading. First he sets out what’s at stake:

European citizens are unlikely to be any happier about foreign authorities going through their financial information than US citizens would be under similar circumstances. Hostile newspaper stories are already beginning to bubble up (e.g. this one from the front page of today’s Irish Times). Even if EU member states have (as is entirely possible) known about the SWIFT arrangement and turned a blind eye, it’s going to be very hard for them to come out and justify it in public.

He doesn’t think this program will fall under the "national security exception" to the EU Data Protection Directive. Therefore, "it seems very unlikely indeed to me that SWIFT’s cooperation with US authorities was legal under European law." We still don’t know whether the cooperation went beyond SWIFT, Belgium is now saying it was limited only to SWIFT’s U.S.-based subsidiary.

As with the secret-CIA-flights story, it’ll be important to carefully parse the reaction of EU and other national leaders. If they call for the press and public to "keep matters in perspective" by, for instance, noting that expectations of privacy in international financial transactions are extremely limited anyway and point out that "international cooperation in the struggle against terrorism is necessary and desirable," we can probably bet that important decision-makers knew. It’s also worth keeping in mind that SWIFT officials insisted that they be presented with subpoenas from U.S. officials requiring co-operation, so that they would be able to maintain that their hands were tied.

Farrell prophesies three possible reactions:

  1. "First, and most unlikely to my mind,… European Union member states will decide to lend ex post justification to an action which appeared ex ante to be illegal, by formally sanctioning it."
  2. "Second, that the data protection authorities will be informally pressured not to proceed any further with investigations. Again, I don’t think that this is likely to succeed in squashing the issue – it’s too hot and controversial." Data-protection is an extremely sensitive issue in Europe.
  3. "Third, and most likely in my opinion, is that this is going to result in enforcement action by the EU data protection authorities – and to new laws in the medium term."

One thought on “Henry Farrell on SWIFT Story Fallout

  1. It so reassuring to know that the New Yprk Times and the European Union on on the case. They are unsleeping in their unceasing efforts to seek out and destroy the enemy in our midst, the foremost threat to world peace, the cause of all that is evil in our world.

    George Bush.

    If that causes side effects – well Bush obviously did that too. Go to it, gents!


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