The European Parliament yestyerday blocked a deal with the US on sharing banking data as part of terror enquiries.
The deal, rejected by a 378 to 196 vote with 31 abstentions, is seen as a victory for democracy by many as the bill intrudes into the privacy of people on the pretext of national and international security.
The US had been pushing Europe for giving US agencies access to EU banking data. Washington sees it as critical to counter terrorism, but many in Europe see it as a gross invasion of privacy.
In November 2009, European home affairs ministers passed an interim agreement with the US allowing American investigators broad access to EU banking data, but needed parliamentary consent to be legally binding.
With the rejection of the bill on Thursday by the EU parliament, US investigators will now be limited under strict EU laws, and they will have to ask for banking information from individual EU member states in the course of terrorism investigations or dubious money transfer by persons involved in terror attackes.
EU parliament president Jerzy Buzek said the assembly wants more data privacy protection to ensure that civil liberties and fundamental rights would be protected.