NEXT STEPS ON THE TFTP -- GERMAN REACTION

C O N F I D E N T I A L BERLIN 003478 SIPDIS SIPDIS TREASURY FOR MICHAEL JACOBSON/JIM FREIS E.O. 12958: DECL: 12/11/2016 TAGS: EFIN PTER ECON GM SUBJECT: NEXT STEPS ON THE TFTP -- GERMAN REACTION REF: STATE 194473 Classified By: DCM JOHN M. KOENIG FOR REASONS 1.4(C) AND (D) ¶1. (C) Summary: Germany is not contemplating any immediate action in response to the November 22 report of the EU's Article 29 Working Party that concluded that SWIFT violated the EU's Data Privacy Directive by exporting data to the U.S. Nevertheless, German officials believe SWIFT will come under increasing pressure from EU states to modify its cooperative arrangement with the U.S. to ensure compliance with European data-privacy laws and regulations. The Germans cite perceived lack of transparency regarding SWIFT's activities, together with high-profile media coverage of the SWIFT-TFTP connection, as contributing factors to the high level of public concern about SWIFT's activities. Mission has delivered the demarche points to the Foreign Ministry (Counter-Terrorism Coordinator von Alvensleben),Finance Ministry (State Secretary Mirow) and the Chancellery (Economic Director General Weidmann). We will also meet with Interior Ministry Deputy Director General for Counter-Terrorism Policy Schindler to discuss the issue further. End Summary. ¶2. (C) DCM met December 5 with Ambassador Busso von Alvensleben, German Federal Commissioner for Combatting International Terrorism, to urge restraint in the official German response to the conclusions of the EU report. The DCM stressed the importance of the SWIFT-TFTP cooperative arrangement, outlined the safeguards inherent in the TFTP and assured him that the U.S. takes seriously data-privacy concerns. He noted that SWIFT has taken steps to introduce "informed consent language" to ensure that customers are notified that their data could be exported to the U.S. ¶3. (C) Von Alvensleben agreed with the DCM that data privacy concerns needed to be weighed against counterterrorism goals and priorities and welcomed USG willingness to engage constructively on the issue. He said the German Government did not doubt the effectiveness of U.S. data-protection measures and that the SWIFT-TFTP disclosures will not/not lead to any "atmospheric changes" in our bilateral CT cooperation. Still, von Alvensleben contended SWIFT had handled the issue badly from the start. There has been a lot of customer grumbling about not having been informed of the program and there is continuing suspicion of the scope and motives of SWIFT-TFTP cooperation. The issue of data protection is important to the German public, he said. German bank customers need to be reassured that their personal data are not being misused in any way. This is a political problem that Germany and other EU states will have to address, von Alvensleben said. ¶4. (C) Asked by the DCM what concrete steps Germany plans to take in response to the EU Working Party's findings, von Alvensleben said no immediate measures are foreseen at this point. Germany will proceed cautiously and with a view toward reconciling the need for data protection with the goal of effective counterterrorism meaures. ¶5. (C) In a December 7 meeting with Fimnance Ministry State Secretary Thomas Mirow, EMIN also delivered the demarche SIPDIS points. Mirow said he would meet with Deputy Treasury Secretary Kimmitt the week of December 11 and SWIFT would be SIPDIS one of the topics they would discuss. He noted he wanted to see the assessment of experts on compliance. Mirow too noted the difficulty of the subject, particularly for the European and EU member state parliaments. Germany understands our arguments, but needs to take a critical look at SWIFT given the controversy, Mirow continued. ¶6. (C) Chancellery Director Weidmann was not fully acquainted with recent developments concerning SWIFT and TFTP. He undertook to look into the matter in light of our points. TIMKEN JR