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UNCLAS SECTION 01 OF 04 BRUSSELS 000120 
 
SENSITIVE 
SIPDIS 
 
DEPT OR EUR, L, S/CT, EEB, INL 
TREASURY FOR TFI 
 
E.O.: 12958: N/A 
TAGS: PTER KTFN PGOV PREL PINR ETTC EAIR EFIN KCRM KJUS
KHLS, EUN, NL, BE 
SUBJECT: EU PARLIAMENT POISED TO VETO U.S.-EU CT TFTP AGREEMENT; PNR 
ALSO IN DANGER 
 
REF:  2009 USEU BRUSSELS 1283 
 
BRUSSELS 00000120  001.4 OF 004 
 
 
SENSITIVE BUT UNCLASSIFIED.  Please handle accordingly. 
 
¶1. (SBU) SUMMARY:  The European Parliament is increasingly likely to 
veto the U.S.-EU Terrorist Financing Tracking Program (TFTP, also 
known as SWIFT) next week.  There are two aspects to this action. 
First, members of the European Parliament do not feel that they know 
enough about the operational aspects of SWIFT to make a judgment on 
whether the program's enhancement of security justifies potential 
perceived compromises of EU data protection standards.  Second, the 
European parliament wants to demonstrate its power to affect law 
enforcement issues, a power that it gained on December 1 with the 
coming into force of the Lisbon Treaty.  Our U.S.-EU agreement on 
Passenger Name Record (PNR) may also be in jeopardy. 
 
¶2.  (SBU) The best we can probably hope for is a decision by the 
European Parliament to delay an up or down vote on approval of the 
interim TFTP agreement, signed by U.S. and EU Swedish Presidency 
officials on November 30, 2009 and scheduled to apply provisionally 
(before formal entry into force post-ratification) as of February 1, 
2010 and expire no later than October 31, 2010.  The Parliament 
could, in this scenario, allow the interim TFTP agreement to remain 
in force provisionally, pending a binding vote later in the year on 
either the interim agreement or a long-term version of the agreement 
yet to be negotiated.  Members of the Parliament do not feel that 
they have enough information to cast an informed vote in favor of 
the TFTP, and that perception is working against us.  Brussels USEU 
has been engaging members of the European Parliament to support the 
interim TFTP agreement, but substantial opposition remains.  END 
SUMMARY. 
 
-------- 
OVERVIEW 
-------- 
 
¶3.  (SBU) With the Lisbon Treaty's entry into force on December 1, 
the European Parliament (EP) acquired the power of co-decision with 
the European Council over a large number of international 
agreements, mainly in the fields of trade, security and justice. 
Seven international agreements, including two with the United 
States, were signed before December 1 but not yet finally ratified 
by the Council of the European Union, which comprises 
representatives of the EU's 27 member state governments.  On January 
25, the interim TFTP agreement was forwarded by the Council of the 
European Union to the EP for consideration and consent in the coming 
months.  The PNR agreement will be forwarded in two weeks. 
 
¶4.  (SBU) The Parliament thus will soon decide the fate of two 
U.S.-EU agreements with direct implications for counter-terrorism 
cooperation:  the Passenger Name Record (PNR) agreement and the 
interim Terrorist Finance Tracking Program (TFTP - often called 
SWIFT) agreement.  As it provisionally enters into force on February 
1, Members of the European Parliament (MEPs) have decided to 
accelerate consideration of the interim TFTP agreement.  The TFTP 
agreement will come first before the Parliament's Committee on Civil 
Rights, Justice, Freedom and Security Affairs (LIBE) on February 4. 
Afterwards, there may be a full Parliament vote on the interim TFTP 
agreement on February 9.  It will be difficult to secure EP consent 
to the PNR and TFTP agreements.  Many MEPs allege they breach EU 
data privacy legislation and the European Charter of Human Rights. 
Even those who are not so skeptical on the privacy issue are uneasy 
that they do not know enough about how the TFTP and its SWIFT 
arrangements actually function.  MEPs may also seek to make a point 
about their own lack of direct participation and influence over the 
negotiation of these agreements.  Decision on the PNR agreement is 
expected in the spring 2010 plenary sessions. 
 
---------------------------------------- 
EP Must Approve International Agreements 
---------------------------------------- 
 
¶5.  (U) The Lisbon Treaty's official title is "Treaty on the 
Functioning of the European Union," and is also known by its 
acronym, TFEU.  An immediate consequence of Lisbon is the need for 
EP approval of most international agreements.  The Lisbon Treaty 
provides that the EP be fully informed at all stages of negotiations 
of international agreements and give its consent to the formal 
conclusion of an agreement.  However, this will not apply for 
agreements under the EU Foreign Security and Defense Policy, which 
will remain in the hands of the member states. 
 
-------------------- 
 
BRUSSELS 00000120  002.4 OF 004 
 
 
TFTP/SWIFT Agreement 
-------------------- 
 
¶6.  (SBU) On November 30, 2009, U.S. and Swedish EU Presidency 
officials signed the U.S.-EU agreement on the Processing and 
Transfer of Finanial Messaging Data from the European Union to the 
United States for Purposes of the Terrorist Finance Tracking Program 
(TFTP).  Their signature of this agreement occurred on the last day 
before the Lisbon Treaty entered into force.  MEPs decried this 
last-minute signature, perceived as a move to avoid their 
Lisbon-granted oversight power that would come into effect the 
following day.  (COMMENT:  In fact, the November 30 signature was 
needed for pre-Lisbon Council decision-making legal structures; it 
did not prejudice EP prerogatives of consent as granted by the 
Lisbon Treaty and which the Parliament will now execute.  END 
COMMENT.) 
 
¶7.  (SBU) The interim TFTP agreement will be provisionally applied 
(in the absence of a formal Parliament decision) beginning February 
1, 2010 and expire no later than October 31, 2010.  The agreement 
provides for EU and member state cooperation with the U.S. Treasury 
Department in furnishing European financial messaging data for 
counter-terrorism investigations, under conditions intended to 
ensure data protection.  Although the financial messaging data 
companies that are subject to the agreement are not public, the 
media widely refer to the agreement as the "SWIFT" agreement. 
SWIFT, which stands for "the Society for Worldwide Interbank 
Financial Telecommunication," is a Belgian company that clears 
worldwide electronic financial transactions.  It has moved storage 
of its European financial messaging data from the United States to 
Europe.  A Council of the European Union declaration calls upon the 
European Commission to submit, no later than February 2010, a 
recommendation to the Council for the negotiation of a long-term 
agreement with the United States.  (COMMENT:  The more likely target 
date for the long-term negotiation mandate is March at the earliest, 
due to the delayed vote confirming the new College of Commissioners 
who would need to examine and decide on the issue.  END COMMENT.) 
 
¶8.  (SBU) MEPs, at their first exchange of views on the issue on 
January 27, announced that a decision on the EP vote would be made 
in the LIBE (Civil Rights, Justice, Freedom, and Security) committee 
on February 4 and that the vote of the entire EP should take place 
during the February 9 Plenary session.  LIBE nominated Jeanine 
Hennis-Plasschaert, a young Dutch Liberal MEP, known for her 
opposition to the agreement, as rapporteur to draft a motion.  She 
will hold a meeting on Tuesday, February 2, to see if a majority 
view is already unfolding.  While Jonathan Faull, the Commission's 
Director General for Justice and Home Affairs, tried to outline the 
importance of the interim agreement, the general mood among LIBE 
col 
 In additilly granted (de-classification of the 
annexes), the MEPs received only a promise that they would be fully 
informed and involved in the negotiation and, of course, with no 
guarantee of results.  (NOTE:  The EP's September resolution had 
raised the question whether the agreement was incompatible with EU 
data privacy legislation.  It stated that article 4 of the U.S.-EU 
agreement on mutual legal assistance, which will also enter into 
force on February 1, 2010, provides for U.S. access to targeted 
financial data upon request, which the EP believed to be a sounder 
legal basis for the transfer of data than the then-proposed interim 
TFTP agreement.  The new U.S.-EU mutual legal assistance agreement 
(to be implemented through the U.S.-bilateral instrument) is the 
chosen mechanism in the interim TFTP agreement.  However, it is not 
article 4, which is designed solely to provide prompt identification 
of accounts, but rather upon a broader request for mutual legal 
assistance of the new text that is employed in the interim 
agreement.  END NOTE.) 
 
------------- 
PNR AGREEMENT 
------------- 
 
BRUSSELS 00000120  003.4 OF 004 
 
 
 
¶10.  (U) In May 2004, the Department of Homeland Security signed an 
agreement with the Council of the European Union that would allow 
airlines to provide to the U.S. Customs and Border Protection (CBP) 
access to air Passenger Name Record (PNR) data originating within 
the EU, subject to carefully negotiated limitations.  The EP never 
took a favorable view of this agreement.  The Parliament even held 
several non-binding votes that challenged the PNR arrangement as a 
breach of European data privacy legislation.  The EP even took this 
alleged case of privacy breach to the European Court of Justice 
(ECJ), which invalidated the original agreement in May 2006 as 
having been negotiated under the wrong EU Treaty decision-making 
structure. 
 
¶11.  (SBU) The ECJ granted a window with a stay of effect for 
U.S.-EU renegotiation of the agreement under a new legal authority, 
leading to a new agreement being signed in July 2007 and 
provisionally in effect since August 2007.  In a non-binding 
resolution adopted in July 2007, the EP noted progress but outlined 
many problems in the PNR agreement's terms on data access, retention 
and transfer.  This agreement, which was not yet fully ratified by 
three EU Member States' national parliaments pre-Lisbon, is now 
subject to the EP's co-decision procedure.  Though provisionally 
applied, the agreement will be terminated should the EP decline its 
consent. 
 
¶12.  (SBU) The U.S. Secretary for Homeland Security, during her 
visit to the European Parliament's Civil Liberties, Justice and Home 
Affairs Committee (LIBE) on November 6, 2009, was asked by the PNR 
agreement's most vocal critic, MEP Dutch Liberal Sophie In't Veld, 
whether the U.S. was ready to re-negotiate the agreement.  The 
 Secretary noted that she was ready to set a date for the review of 
the PNR agreement, as required under the terms of the agreement. 
In't Veld was appointed rapporteur for this issue at the EP LIBE 
meeting of January 27. 
 
------------------ 
NEXT STEPS/COMMENT 
------------------ 
 
¶13.  (SBU) If the EP denies its consent to the two agreements, on 
TFTP and PNR, the agreements will be terminated by the EU.  After 
the January 27 debate on TFTP, it is clear that affirmative consent 
on TFTP will be difficult, if not impossible.  Consent on PNR could 
be equally difficult.  LIBE committee experts on these issue wttri up`Lreement.  In the coming days, Brussels 
USEU will continue to meet with MEPs and other EU officials in order 
to attempt to gain support for the two agreements in Parliament. 
 
¶15.  (SBU) Possible scenarios in coming days, in order of 
likelihood, are:  1) MEPs go ahead with the vote on February 9 and 
vote NO - the agreement will be terminated and the U.S. will need to 
find an alternative mode of acquiring desired information on 
international financial transactions; 2) MEPs are promised, by U.S. 
and EU officials, access to evidence demonstrating that the TFTP 
program is bringing tangible results and that it conforms to their 
interpretation of EU data protection - in which case the Parliament 
decides to delay a vote while they acquire more information on the 
SWIFT program; 3) MEPs decide to delay their vote on consent for 
nine months, but adopt a non-binding resolution criticizing the 
legislative procedures and demanding concessions for the long-term 
negotiations (which is unlikely given media focus and the pent-up 
drive to exercise that power in the EP); 4) the EP delays its vote 
while seeking European Court of Justice preliminary guidance on the 
legality of the agreement; and 5) last-minute appeals from U.S. and 
EU officials succeed, with the Parliament approving both the PNR and 
interim TFTP agreements.  Under all of the above scenarios, 
negotiations later this year on a successor agreement to the interim 
TFTP agreement will be difficult and highly charged. 
 
BRUSSELS 00000120  004.4 OF 004 
 
 
 
¶16.  (SBU) In the coming days, we recommend that sustained 
engagement should stress the agreements' importance to the security 
of citizens in the U.S., Europe and elsewhere, while we explain the 
U.S. dedication and methodology of protecting individual privacy. 
We look forward to the forthcoming visit by U.S. Treasury officials 
during the week of February 1.  The staff director of the LIBE 
committee also noted that an invitation to MEPs to visit and discuss 
these issues in the United States would be much appreciated, as 
would be any high-level official expert visits to the LIBE committee 
in Brussels. 
 
KENNARD