The European Parliament just voted to reject the U.S. request for access to bank data on SWIFT servers when investigating terrorism.

If you don’t know much about the EU government structure (like I didn’t), here are the basics:

The EU legislative branch is bicameral, meaning there are two parts. The European Parliament and the Council of the European Union. They are roughly similar to the U.S. House of Representatives and the Senate, respectively. The European Parliament is the lower legislative house and has over 700 representatives from the 27 EU member states. The Council of the European Union is the upper legislative house with one state representative or minister from each EU member country. It’s more like the U.S. senate. (There is also the European Commission, which has 27 members appointed by the Council. The Commission is the executive branch, asking 27 representatives of the EU member states to do a job similar to the U.S. President).

In recent decades the European Parliament has been growing in power, forcing resignations and speaking out strongly on the overall EU budget. Importantly, in December of 2009, enforcement of the Lisbon Treaty gave the Parliament control of the EU budget and equal legislative power to the Council.

All of that being said, the first big political move that the Commission has made is to reject a bank data sharing deal with the U.S. government because they say it puts the privacy of Europeans at risk. How interesting that hundreds of years ago when the U.S. was forming one of the big issues was freedom and privacy from European troops, taxes and government intrusion, where now it is the European Parliament saying that U.S. practices are too intrusive. Perhaps this is a reason to look at what we are doing!

The issue is around counter-terrorism efforts through the Society for Worldwide Interbank Financial Telecommunication (SWIFT) data exchange programs. Until 2009, SWIFT servers were located in the U.S., so when U.S. investigations wanted access to banking records they could access them at will. The servers were moved to Europe last year. There was a 9 month interim agreement allowing U.S. authorities access to the information. The Parliament rejection of continuing that deal because of privacy concerns shows the new level of power that the Parliament has and is not afraid to exercise.

"The majority view is that the correct balance between security, on the one hand, and the protection of civil liberties and fundamental rights, on the other, has not been achieved," said Jerzy Buzek, European Parliament head.

So what happens now? Well, the U.S. is upset and says that this will hinder counter-terrorism efforts. The European Council will have to go back to the drawing board and figure out a different way to draft the agreement that respects the privacy of European citizens to the level that the European Parliament wants.

In the mean time, the western world is faced with the question of how much we will work together on terrorism investigations, where the lines between privacy and aggressive deterrence stand, and what the future of financial relations between the U.S. and the EU will be. As the EU Parliament power rises, the U.S. has yet another group to start dealing with as equals.

Photo Credit: John & Mel Kots (via Flickr under CCL)