CIA has access to Swiss transactions

The Swiss National Bank is on Swift's board of control Keystone Archive

The United States has confirmed it has been monitoring international financial transactions, including those in and out of Switzerland, for almost five years.

The Swiss government has remained quiet on the issue, but data protection experts and lawyers are concerned by Friday’s revelations in the New York Times.

US Treasury Secretary John Snow defended the secret programme, carried out by the CIA and the Treasury, calling it “government at its best” and a valuable aid for fighting terrorism.

Snow confirmed that since just after the attacks on September 11 2001, the Treasury had been tapping into records of the Belgium-based Society for Worldwide Interbank Financial Telecommunication (Swift) for evidence of potential activity by terror groups.

“The legal basis for this subpoena is routine and absolutely clear,” Treasury Under Secretary Stuart Levey told a hastily called news conference, adding that it was “a grave loss” that the surveillance programme had been revealed but indicated that it would continue.

Swift is a cooperative owned by the 7,800 financial institutions in more than 200 countries that use it. Its headquarters are in Brussels.

Levey said tens of thousands of transactions that had passed through Swift had been examined.

Swiss concerns

In addition to Democrats on Capitol Hill who blasted the programme as a threat to Americans’ privacy and an example of the Bush administration’s efforts to expand the power of the executive branch, Swiss commentators hardly welcomed the news.

Mark Pieth, a Swiss lawyer and a member of the three-man inquiry team into the UN oil-for-food scandal, wrote in the NZZ am Sonntag newspaper that a US legal order must have forced Swift to open its records – warning Swift that if it didn’t comply, it would risk losing its licence for dealing with US transactions and banks.

In Switzerland 99 banks and 254 institutions are connected to Swift, with a daily transaction value of some SFr200 billion ($160 billion).

Although the Swiss Bankers Association agreed with a UBS spokesman that Swiss banking secrecy had not been endangered or violated, Hanspeter Thür, the Federal Data Protection Commissioner, said he was alarmed.

He said the data protection regulations covered not only banking secrecy but also whether such information should be able to be passed on.

US Treasury officials said Swift was exempt from US laws restricting government access to private financial records because the cooperative was considered a messaging service, not a bank or financial institution.

For its part, the Swiss National Bank said it had “no legal jurisdiction in Belgium”.

Subpoenas

Swift said in a statement on its website that “Swift has to comply with valid subpoenas”. It described the requests it received from the US Treasury as “compulsory subpoenas for limited sets of data” and said it “negotiated with the US Treasury over the scope and oversight of the subpoenas”.

The statement noted that “Swift is overseen by a senior committee drawn from the G-10 central banks and has informed them of this matter”. The G-10, or Group of 10, is made up of the world’s major industrialised countries. The Swiss National Bank is also on the board of control.

Swift’s board of directors is made up of 25 representatives from financial institutions, including two Swiss.

The deputy chairman, Stephan Zimmermann, is from the global wealth management and business banking division of UBS AG in Zurich, and Yves Maas is from the Credit Suisse Group.

UBS declined to comment, but James Nason from the Swiss Bankers Association said his group was “surprised to discover that this activity was going on”. He noted that Swiss banks adhere to agreed international standards to counter money laundering.

swissinfo with agencies

In brief

Swift (Society for Worldwide Interbank Financial Telecommunication) is a cooperative founded in 1973 and headquartered in Brussels, Belgium.

The consortium operates a secure electronic messaging service used by some 7,800 financial institutions – including banks, brokerages and investment managers – to communicate with their counterparts in more than 200 countries.

A spokesman said the network handles some nine million transfer instructions and confirmations a day with a value of about $6 trillion (SFr7.5 trillion).

Two Swiss sit on the 25-man board.