The European Commission on Thursday (8 January) defended a US gag order imposed on the EU’s police agency Europol.

It means EU lawmakers and most officials are not allowed to scrutinise a document - on implementation of the EU-US Terrorist Finance Tracking Program (TFTP) - written by Europol’s own internal data protection committee, the joint-supervisory body (JSB).

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A commission official said the Americans have a right to refuse access because some of the classified data in the report belongs to them.

But the EU’s ombudsman, Emily O’Reilly, told MEPs in the civil liberties committee the situation amounts to giving the US “a veto over the democratic oversight of EU institutions”.

“It may well be the case that it contains sensitive data from the US and so should not be released - but we have no way of knowing without sight of the report,” she said.

“It should be pointed out that this is a document from an EU institution.”

The issue was already raised in 2012 when three and a half pages of the report were released after Europol had classified the rest as EU Secret.

Also known as the Swift agreement, TFTP gives agents from the US treasury department access to data on Europeans' financial transactions in a bid to identify terrorist financing.

Europol hands over the data on the basis that it first makes sure each request complies with the terms of the Swift pact.

But the JSB says most of the data transferred to the US concerns people who are not suspected of any crime and have nothing do to with terrorism.

The European Commission made the same admission in a communication paper out in 2011 where it noted “the vast majority of this data concern citizens who have nothing to do with terrorism or its financing.”

The commission paper added that data is provided in bulk rather than on individual basis because Europol doesn’t have the technical means to evaluate request.

The data-sharing agreement courted even more controversy following revelations by the former NSA agent turned whistleblower Edward Snowden.

Media reports, based on the revelations, said the US intelligence agency had also secretly tapped into the international bank transfer firm Swift, which holds the data.

The revelations prompted the European Parliament to ask the commission to dump the data pact in October 2013.

But the commission refused after launching an inquiry that relied on two one-to-one meetings, an exchange of letters, and statements from US officials - denounced by MEPs as a sham.

The issue remains contentious for the MEPs who signed off the agreement in 2010 on the premise that certain safeguards would be guaranteed.

MEPs feel those safeguards, including access to the JSB report, are now being undermined.

O’Reilly stepped into the debate after Dutch liberal Sophie In't Veld’s request for the whole report was refused.

When the EU ombudsman asked to see the report in order to determine if Europol had correctly applied rules on access to documents, she was also turned away in April 2014.

“For the first time in its 20-year history, the European Ombudsman was denied its right under statute to inspect an EU institution document, even under the guarantee of full confidentiality, as part of an inquiry”, she said.