Financial Cryptography

SWIFT breach - the 'squeeze', justice not being done, the Europeans wake up to "restaurant economics" a.k.a. industrial espionage

SWIFT was extorted to hand over the data. According to two Austrian reports:

"Einverständnis wurde abgepresst" Per Gerichtsbeschluss sollte der gesamte Datenverkehr in der US-Zentrale von SWIFT beschlagnahmt werden, falls SWIFT nicht freiwillig eine bestimmte Zahl von Datensätzen liefere - "das Einverständnis wurde abgepresst", sagt Gall.

“Agreement was squeezed off” By court order the entire data traffic in the US center should be seized by SWIFT, if SWIFT does not supply voluntarily a certain number of data records - “agreement was squeezed off”, says Gall.

Also, here (left in German, right in Googlish, sorry about that) and also see earlier reports (1, 2, 3, 4, 5) ... :

Mit Beschlagnahme gedroht Als sich SWIFT zunächst weigerte, drohten die Amerikaner mit der Beschlagnahme der in den USA gespeicherten SWIFT-Daten. Im US-Bundesstaat Virginia befindet sich nämlich eines der drei Hauptrechenzentren des weltweiten Finanztransaktionssystems SWIFT. Mit der Verhinderung von noch Schlimmerem begründet SWIFT nun, dass man alle gewünschten Daten freiwillig übermittelt habe.

Threatened with seizure When SWIFT refused first, the Americans threatened with the seizure of the Swift data stored in the USA. In the US Federal State Virginia is one of the three main computing centres of the world-wide financial transaction system SWIFT. With the prevention of still worse one SWIFT justifies now that one conveyed all desired data voluntarily.

SWIFT director Günther Gall made those comments at a recent "crisis meeting" held by Austrian banks. He reported that the US Treasury prepared warrants for the seizure of the entire data center, and then offered SWIFT the chance to cooperate by means of a slightly less draconian handover of data.

There's no doubt that the US Government can have this data if it wants. It has the power, and SWIFT is an easy touch, so say at least the Swiss

Stellt sich die Frage, wieso die Swift dem amerikanischen Finanzministerium gefügig Folge leistete. «Die Swift ist leicht erpressbar», mutmasst Mark Pieth, der bereits die Untersuchungskommission der Uno im «Oil for Food» -Skandal leitete, «denn wenn die US-Behörden der Swift die Lizenz für ihre amerikanische Niederlassung entziehen, ist sie nicht mehr funktionsfähig.» Pieth wäre auch nicht erstaunt, wenn der amerikanische Geheimdienst sich im selben Atemzug Einblick in andere Finanztransaktions-Plattformen beschafft hätte. Laut dem Bericht der «New York Times» bestätigten Offizielle der US-Behörden zudem, limitierte Abkommen mit Kreditkarten- oder Transaktionsunternehmen wie Western Union eingegangen zu sein. Die Angelegenheit stellt für Pieth jedenfalls einen eindeutigen Eingriff in die Freiheitsrechte der Bürger dar, und er ist gespannt, wie sich die Schweizer Behörden rechtfertigen werden.

The question arises, why Swift had complied to the American Finance Ministry so easily. “*SWIFT is easily extortable*”, presumed Mark Pieth, which already led the inquiry of the UN in the “oil for Food” scandal, “if the US authorities withdraw the licence from SWIFT, it is no longer functional.” Pieth would not be surprised also, if the American secret service had procured itself in the same breath view of other financial transaction platforms. According to the report the “New York Time” confirmed official one of the US authorities besides, agreement with credit card or transaction enterprises limited such as Western union to have been received. The affair represents a clear interference anyhow for Pieth into the liberty rights of the citizens, and it is strained, as Swiss authorities will justify themselves.

In this case, it used the power, and hence we now have another reason for the cover-up -- if true, the US government again exceeded the bounds of reasonable civilised behaviour. It brings to mind how Judge Lewis A. Kaplan recently ruled in the New York Southern District court:

"Justice is not done when the government uses the threat of indictment ... to coerce companies into depriving their present and even former employees of the means of defending themselves against criminal charges in a court of law," he wrote. "If those whom the government suspects are culpable in fact are guilty, they should pay the price. But the determination of guilt or innocence must be made fairly _ not in a proceeding in which the government has obtained an unfair advantage long before the trial even has begun."

There, Judge Kaplan was referring to the US Justice Department's documented technique of pressuring companies to "cooperate" by hanging their employees out to dry. Unfortunately, there was nobody at the American data center to represent the world's wire senders against the seizure "incentive."

This is a scenario which is all too routine in the money world which is why we have rather strict banking secrecy laws. More:

Offiziell Bescheid wusste in Österreich offenbar nur ein Manager der Raiffeisen Zentral Bank und SWIFT Aufsichtsrat Günther Gall. Er hatte bereits 2001 der Weitergabe von österreichischen Transaktionsdaten an die CIA zugestimmt. Angeblich wurden die österreichischen Banken über diese, nach österreichischem Recht illegalen Datenweitergaben, nicht informiert. Nach fast fünf Jahren wird es nun Zeit, dass sich die Banken darum kümmern, wie mit unseren österreichischen Finanzdaten umgegangen wird, die sie an SWIFT weitergeben. Denn es sind die Banken, die garantieren müssen, dass Dienstleister den gleichen Standard beim Datenschutz garantieren, wie sie selbst mit dem Bankgeheimnis versichern.

Officially, only one manager in Austria know, Raiffeisen central bank and SWIFT supervisory board Günther Gall. It had already agreed 2001 of the passing on of Austrian transaction data to the CIA. Allegedly the Austrian banks were not informed about these data passing on illegal after Austrian right. After nearly five years it becomes now time the fact that the banks worry about how with our Austrian financial data is handled, which pass it on at SWIFT. Because there is the banks, which must guarantee that Dienstleister guarantee the same standard with the data security, how they insure with the banking secrecy.

Which is a grumble that the Austrian responsibilities towards secrecy of data have been breached.

There is yet another problem. Most of the world is looking at this as a privacy issue. (Indeed Privacy International is right on the case, and it needs no crystal ball to predict who's top choice for this year's Big Brother award.) Yet, this is missing the point. As I've pointed out, the lack of governance means that the information will be leaked in due course; not to you or I, as we can't affort the price of illegal data, and we may not want to anyway. But to someone; and due to strong secrecy of their operations, we won't know who it is being leaked to.

René Pfeiffer reports in EDRIgram:

Members of Austrian business organisations have also voiced big concerns about possible cases of industrial espionage, because it is not known who has access to the intercepted SWIFT data. Combining the data from money transfers and the disputed Passenger Name Records data enables everyone who gets these records to use them for economic advantage. Organisations in UK, Germany and Austria have begun to investigate the scope of the damage caused by the SWIFT tapping. Letters to local banks and SWIFT board members have been prepared and published. Every company, business and individual is advised to demand a clarification about the intercepted data on the basis of data protection laws. Furthermore legal steps are being prepared against the SWIFT board since they gave customer details away without mutual consent.

This isn't so much about privacy of the individual, as privacy of the business. A.k.a. industrial espionage, on a state-run scale.

If a large enough deal is being done, where some US champion (say, Boeing) is up against some European champion (say Airbus) for some large bid (say 100 A380s for China), then we can expect _governance be damned_. Maybe the US Treasury would stand up and defend Airbus's right to privacy, against Boeing's corporate survival, ... but I wouldn't be betting *my* factory on it. More:

Wirtschaftsspionage mit EU-Finanzdaten Bisher wurde nur vermutet, die USA könnten ihr Überwachungssystem im Namen der Terrorabwehr auch dazu nutzen, Europas Wirtschaft auszuspionieren. Mit dem Abhören der Finanzdaten habe sich das nun betätigt, so ein Experte der Internationalen Handelskammer. "Für mich kommt diese Wendung nicht überraschend. Vom Überwachen des internationalen Telefonieverkehrs bis zur Kontrolle des Finanzverkehrs ist es ja nur ein kleiner Schritt. Was im ECHELON-Untersuchungsausschuss des EU-Parlaments noch Vermutung war, hat sich damit bestätigt", sagt Maximilian Burger-Scheidlin von der Internationalen Handelskammer [ICC] in Wien. ECHELON lässt grüßen Die Vermutungen im Untersuchungsausschuss, die USA würden ihr elektronisches Überwachungssystem ECHELON auch gezielt dazu benutzen, Europas Wirtschaft auszuspionieren, sind für Burger-Scheidlin mit der Affäre SWIFT nun real geworden. Man könne eigentlich dankbar sein, denn nun lägen handfeste Indizien vor, dass US-Geheimdienste die europäischen Finanztransfers systematisch durchsuchten. "Wir hoffen nun, dass die Regierungen Europas endlich aktiv werden, nachdem sie nun seit vielen Jahren Bescheid wissen", sagt Müller-Scheidlin, dessen Spezialgebiet bei der ICC die Abwehr von Wirtschaftsspionage ist.

Restaurant economics with European Union financial data So far only one assumed, which could use the USA their monitor in the name of the terror defense also to spy of Europe economics. With the hearing of the financial data now, such an expert of the international Chamber of Commerce worked. “For me this idiom does not come surprisingly. From supervising the international telephone voice traffic up to control of financial traffic it is only a small step. Which in the ECHELON committee of inquiry of the European Union parliament still assumption was, thereby”, says Maximilian Burger Scheidlin was confirmed of the international Chamber of Commerce [ICC] in Vienna. ECHELON says "I'm not dead yet!" The assumptions in the committee of inquiry, which the USA its electronic monitor ECHELON also purposefully to use to spy of Europe economics are become for Burger Scheidlin with the affair SWIFT now material. One can be actually grateful, because now strong indications would be present that US secret services scanned the European financial transfers systematically. “We hope now that the governments of Europe become finally active, after they know, say now for many years answer” Mueller Scheidlin, whose special field is with the ICC the protection from restaurant economics.

And More. "Restaurant economics" is googlish for "industrial espionage" it seems. Luckily, it's all in German which means the Bush Administration can wave off these funny krauts and their silly terms, and pretend this is just another case of New York Times treachery and treason.

It remains to be seen if the International Chamber of Commerce will carry this fight to the enemy. What was last month's curiousity -- the European Commission being quite happy to sign over so much data in one-way exchanges on individuals -- is now replaced with the new curiosity of whether they will do the same to their companies.

Posted by iang at July 22, 2006 02:42 PM | TrackBack