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The European Parliament vetoed an agreement on transferring bank data to U.S. counter-terrorism investigators, risking a security gap seven weeks after an attempt to bomb a trans-Atlantic flight.

The European Union assembly said an accord under which the EU allows the U.S. Treasury Department to view records from the Swift global money-transfer system lacks adequate protection of personal data. The Parliament rejected the deal over appeals by U.S. Secretary of State Hillary Clinton and Treasury Secretary Timothy F. Geithner.

“Our laws are being broken,” said Jeanine Hennis- Plasschaert, a Dutch member who steered the matter through the 27-nation Parliament today in Strasbourg, France. “The rule of law is crucial.” The vote was 378 to 196, with 31 abstentions.

The veto deprives the U.S. of its preferred tool for collecting European data under the Terrorist Finance Tracking Program created after the Sept. 11, 2001, attacks, highlighting trans-Atlantic differences over privacy rights in the fight against terrorism. The EU is also resisting U.S. calls to install body scanners at airports following a Nigerian man’s failed attempt to blow up a Northwest Airlines plane flying to Detroit from Amsterdam on Christmas Day.

Swift, with headquarters in Belgium and computer centers in the Netherlands and Switzerland, is one of the main conduits for the global financial system. The cooperative, formally called the Society for Worldwide Interbank Financial Telecommunication, relays money-transfer orders among 9,000 member banks and other financial institutions in more than 200 countries.

Provisional Agreement

The EU-U.S. accord on Swift was due to last nine months, during which both sides were committed to negotiating a “long- term” successor. The EU’s national governments had already approved the provisional deal, which imposed limits on what the U.S. could do with the data and how long it could keep it.

The EU-wide agreement spared the U.S. from having to seek bank data on a purely country-by-country basis and made the transfers less politically controversial.

The U.S. government stepped up efforts in recent weeks to persuade the Parliament to endorse the accord, saying the Terrorist Finance Tracking Program has been “instrumental” in protecting citizens on both sides of the Atlantic and failing to support it “would be a deeply regrettable and potentially tragic mistake.”

“The EU and U.S. cannot afford to handicap our investigators by preventing access to key data,” U.S. Treasury Undersecretary Stuart Levey said in an opinion piece published last week by Europolitics, a news service devoted to European affairs. “Undetected and undeterred, terrorists will abuse the integrity and openness of the world’s financial system.”

Clinton and Geithner also wrote to EU Parliament President Jerzy Buzek about the matter, according to Buzek.

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