But a substantial majority of MEPs voted to block the EU's interim agreement on banking data transfers to the US via the SWIFT banking network, the Parliament said in a statement. The resolution rejecting the agreement was approved with 378 votes in favour, 196 against and 31 abstentions.

MEPs' objections to the deal are threefold.
It breaches EU data protection rule. It is excessively invasive for its stated purpose.It is one-sided as the US is not required to share the banking data of its citizens with any EU counterterrorism authorities.

Many see the vote as way for Parliament to flex its newly acquired political muscle. The Lisbon Treaty came into effect in early February granting the Parliament equal say over justice and security issues together with the national governments, known as the EU Council.

The Council signed the temporary agreement with the US just days before the Lisbon Treaty took effect.

"Council has not been tough enough on data protection," said (left) Jeanine Hennis-Plasschaert, a Dutch liberal MEP who argues that the rules on data transfer and storage provided for in the interim agreement were not proportionate to the security supposedly provided.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT)  the Belgium-based cooperative that transfers bank data across borders holds the data base that US authorities tapped in the wake of the attacks on September 11, 2001, in a bid to trace terrorist financing, Swift was forced to hand over the data in the US.

The SWIFT statement says "In January 2010, SWIFT implemented a new dual-zone messaging architecture (as announced in 2007) to increase resilience, system capacity, commercial appeal, and enhance the protection of customer data.

"Since then, messages that are transmitted within SWIFT’s European zone (including intra-EU messages) are processed and stored in our European and Swiss data centers only.

"In the exceptional case of a legal request for any financial messaging data stored in either of these two locations, judicial mechanisms in place in EU Member States and Switzerland will apply.

"SWIFT has always, and will continue, to comply with the laws of the countries in which it operates, and protecting customer data will remain at the core of SWIFT's business. The European Parliament’s rejection of the interim agreement will have no impact on this situation."

Parliament will now be fully involved in drafting a long-term agreement. Viviane Reding,(left) now switched to commissioner for justice and fundamental rights, after four years as telecom commissioner, said one way to win the confidence of the Parliament and EU citizens would be to involve the National Data Protection authorities in the process of drafting the new long-term agreement data sharing agreement.

"I believe that the full involvement of national data protection authorities in the negotiations of the long-term SWIFT agreement will give citizens further assurances about the proportionality and the correct implementation of the agreement particularly with regard to its data protection safeguards," she said.