European Swift bank data ban angers US

Tracking funding has been a priority for the US since 9/11

The European Parliament has blocked a key agreement that allows the United States to monitor Europeans' bank transactions - angering Washington.

The US called the decision a "setback for EU-US counter-terror co-operation".

The vote was a rebuff to intensive US lobbying for EU help in counter-terrorism investigations.

EU governments had negotiated a nine-month deal which would have allowed the US to continue accessing the Swift money transfer system.

Top US officials - including Vice-President Joe Biden, Secretary of State Hillary Rodham Clinton and Treasury Secretary Timothy Geithner - had contacted MEPs in recent days to urge them to consider "the importance of this agreement to our mutual security", the Associated Press news agency reported.

But Euro MPs said the deal provided insufficient privacy safeguards.

Lawmakers in Strasbourg voted 378-196 against the deal, with 31 abstentions.

Secret access

The US started accessing Swift data after the 11 September 2001 terror attacks on New York and Washington.

But the fact that the US was secretly accessing such data did not come to light until 2006.

Last week the Greens' home affairs expert, Jan Philipp Albrecht MEP, said that in backing the new deal the European Commission and EU governments had "not respected the fundamental criticism about the lack of sufficient protections with regard to privacy and the rule of law".

The leader of the Socialist group, Martin Schulz MEP, said: "We want a new and better deal with proper safeguards for people's privacy."

Tracking the funding of terror groups globally has been a priority for Washington since the 2001 attacks.

Swift handles millions of transactions daily between banks and other financial institutions worldwide. It holds the data of some 8,000 banks and operates in 200 countries.

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