Examination of Witness (Questions 1240
WEDNESDAY 7 JUNE 2000
1240. That is somewhat different from the practice
in the United Kingdom and in Ireland.
A. That is right. The smart card issue, I am
afraid I cannot answer your question directly in terms of where
we are going but one of the things we found, into which our Directorate
responsible for financial services is looking, it relates to one
difference between the Continent and the United Kingdom and Ireland.
The use of credit cards for payment on the Internet is the key
means at this stage. What is interesting is that in the United
Kingdom, as with America, there is a charge back system which
the cards do not offer on the Continent. Although we are looking
into that, we actually think the charge back system is something
which is far more confidence building than knowing that you have
got a smart card which has a certain level of security on it.
The reason for that is you can always check before you clear your
balance whether in fact you did order or not the product which
is not the case, for example, here in Belgium. I just get the
bill and it is taken straight out of the bank.
1241. It is like a switch card?
1242. It happens on the day.
A. Yes, it happens on the day. That has been
seen as a major inhibitor. I think Consumers International, which
is a European consortium of consumer bodies, looked into this
issue and found that if charge back were generalised across the
Community that would probably be far more beneficial to consumers
than talking about the smart card system. Smart cards, as you
rightly said, are already here on the Continent and certainly
are quite accessible. The issue about the information held in
the card that could be used in a dangerous manner, more generally
that issue comes up very much in the whole argument regarding
encryption standards and dual-use controls etc. The Bill that
I understand is going on in the United Kingdom at the moment
A. Yes. One fully understands for reasons against
terrorism or whatever, there needs to be a possibility to have
access to encrypted data. However, the idea that you would be
advised to give your private key for reasons of economic interest,
that goes very, very far. Looking at it from the traders point
of view, and looking again from this consumer confidence point
of view, with no disrespect to the Government or whatever, some
retailers were telling me this morning "we might as well
establish in the Republic of Ireland because we could sell the
idea that here your encryption is safe from", I would not
use the word "spying" but you can see what I am getting
at. I think that is where the problem lies more than maybe in
the smart card issue. I do not think that is seen as an issue
1244. Just for your own information, I do not
know how close people are to the ministers who are piloting this
through Parliament but some of us had meetings with ministers
a couple of days ago and they said there are a fair number of
other European countries who are watching with considerable interest
what is happening in the United Kingdom. It is not quite along
the lines of horror, it is that they have not come down on which
side of the fence they are sitting.
A. Absolutely. My comments were very much from
the perspective of where I am coming from, which is that of our
remit, if you like, which is to encourage trade. It is where you
draw that grey line. Of course, there is obviously an element
of trust in your own Government and I suppose I am still a United
Kingdom citizen and I can understand the concern there. I am not
surprised at Member States. Now talking as a Commission official
I would be interested in looking at that. I think there is that
thin line when you start saying on the one hand one wishes is
to ensure criminal law enforcement and one can have access to
information and the other thin line, coming back to the previous
question about knowing what I am buying on the Internet from my
tax returns. That is what I think from the citizen's point of
view it is a real issue. One of the big problems when one looks
at the Internet is there has been a tendency to suggest that of
course it is a very useful, fast medium but the risks are far
greater when you trade, for example, on the Internet than when
you use your telephone. That is completely incorrect.
A. That is total rubbish.
1246. The same with using your card in a restaurant.
A. Absolutely, where you sign it. It is very
interesting that at one time there was a claim that there was
an enormous amount of credit card fraud on the Internet but, in
fact, what people found out was that the fraud came from using
the same cards they were using in the restaurant and that was
where the copies had been made. One should not over-exaggerate
1247. Following that through and picking up
on Lord Brookeborough's point, as someone who has lived in the
United Kingdom and now lives here and has to have an ID card,
do you find this a great invasion of your personal liberty?
A. No, I do not. I have other problems with
the Belgian administration which I will be quite happy to go into
later. No, I do not. I think in terms of privacy one always realises
that there is certain information which will always be available
to the authorities, that is absolutely normal. I am an ex United
Kingdom civil servant as well, I signed the Act, so there is an
element of realism. Personally I do not find that to be a problem.
In the same way that I had a passport before, now I have an ID
card. In fact, it costs me less with an ID card to cross the border
than it does having a passport, although as a European official
I do not need to worry about the cost within the Community.
1248. This has been an excellent session. We
are very, very grateful indeed.
A. You are most welcome.
Chairman: And for the work that you did before
you came. Thank you.