It is sad that government officials of emerging financial centers from different continents have never met together, like OECD, OPEC, BRIC and other economically-motivated alliances. The West Indian prime ministers may meet regularly for regional matters but it is hard to visualize them making a strong anti-OECD statement along with Panama's outspoken Martinelli, Uruguay's Leftist Mujica, Seychelles' Michel and the Cypriot, Luxembourgois and Swiss officials. Each country sees themselves as different (or superior) to the other financial centers and is confident that they can weather the storm through bilateral talks with each "name-and-shame" powers through Free Trade Agreements or the European Union. Since the promoters of each financial center made confidentiality a competitive advantage, within their own countries bankers are unknown to the rest of the general population who votes for Presidents who may be oblivious to the contributions their banking centers make in providing access to easier credit, technology and sustainable employment of their communities.
Bermuda's Finance Minister said it the way it is: US and European governments need money for tax-and-spend schemes and OECD technocrats have deceived them into thinking there is a pot of gold of trillions of dollars at financial centers elsewhere when centers like London is the largest tax haven for other countries.
Bermuda and other Overseas Territories are being used as the scapegoats for policy failures of larger countries, but more must be done to educate Europe about the Island’s business model.
So said Finance Minister Bob Richards and Premier Craig Cannonier as they updated the media yesterday on their meetings with British Prime Minister David Cameron.
Mr Cannonier stressed that no agreements were signed in London and his Government will not do anything to jeopardise Bermuda’s financial model or previous agreements the Island has signed.
Mr Richards said there was a “groundswell” of opinion against offshore financial centres in London driven by a number of factors.
“First of all the US is coming out of a recession, Europe and the UK are not. Unemployment remains very high in the UK. Budget deficits are ballooning So it's a very difficult and negative environment over there.”
He said the Overseas Territories and Crown Dependencies were “to some extent being used as scapegoats and distractions for domestic policy failures.”
In addition, there was a “corps of non-Governmental organisations” who had “latched on to this notion that either multinational organisations or so-called tax havens are responsible for these poor countries not having any money.
“I was very surprised at the virulence of that sentiment that exists over there right now. Our message is to a significant extent being overwhelmed by that noise.
“Therefore we have to up our game.”
Mr Richards said that Bermuda had been more successful with its public relations in the US than in the UK.
“We just kind of assumed that because we have this relationship with Britain and we have these representatives in our midst at all times at a most senior level that somehow there’s an understanding over there of what Bermuda is all about.
“And I was surprised and dismayed to find out that that was not true. They don’t understand what Bermuda is all about. They continue to lump us in with other jurisdictions that are engaged in offshore banking that have secrecy laws, that are engaged in money laundering. These are things that Bermuda is not involved in.”
The Bermuda delegation had stressed to Mr Cameron that Bermuda and the other OTs had not been given a “fair opportunity” to examine the multilateral agreement that he wanted signed.
“It is important that you understand that Bermuda has not signed any agreement,” the Premier said.
“We need to be responsible, and in being responsible we must look at every ‘T’ and make sure that it is crossed and every ‘I’ to make sure it is dotted. Because we do not want to put in jeopardy the financial model we have in Bermuda.”
The Premier said Bermuda had no problem with sharing tax information and providing information about beneficial ownership of companies domiciled here, and had been doing so for many years.
“When it comes to the highest regulations, Bermuda has always been [among] the forerunners,” the Premier said.
But Mr Cannonier stressed that Bermuda’s model was not banking, but insurance. “It is the businesses that are domiciled here that pay out in billions of dollars to ensure that many of the places like the UK and the United States can get back up running again and can create jobs and sustain jobs and put them back in the positions they were in before these things (catastrophes) happen.”
He said: “There is a great misunderstanding about what it is that we do. So we will continue to ensure that we get the message out there.”
No other territories had signed the multilateral agreement, he said.
Asked if the UK Government accepted Bermuda’s request for more time, he said: “They have to.”
But the Premier stressed that a signing ceremony had never been on the agenda.
“Sovereign nations like the United States and Canada are still coming to terms with this global agreement, so it’s going to be a while before we all come to a consensus as to exactly the direction we want to go in. They also are looking at this very closely and they are being responsible as well.
“So as we move toward tightening up the net of illegal activity I’m sure that some agreements will be found, but right now we are not at that position.”
Asked about the efforts of companies like Google to avoid paying millions of dollars in taxes using vehicles domiciled here and in other countries, Mr Cannonier said Ireland’s double tax treaty was a key factor in enabling Google’s tax avoidance.
“Bermuda is down the chain. So if you want to avoid this thing happening, the UK, the G8 nations really need to go to Ireland and the likes and address them first.”
Mr Cannonier added that misrepresentation of Bermuda in UK media stories will end with better public relations.
Kangoocar :: June 18, 2013 6:38 pm
Thankfully we have a competent OBA handling our affairs!! I totally agree that we need to get the message out there that we are NOT a tax haven!!! We offer a platform that enables countries such as the US and others to have their citizens save money on insurance matters, which means when catastrophes do occur in their countries their people have affordable insurance to cover the costs!!! They do in fact know this and it is nothing more than political posturing to cover their own inability to have their day to day costs of running their own countries!!
What we provide for them out weighs the lost revenue!!!!
32n 64w :: June 18, 2013 7:05 pm
"You have had it good for a number of years. What have you done with all the spoils of this industry during the last 20 years?"
This shows a clear misunderstanding of our tax system. There are no "spoils" or hidden caches of tax revenues hiding in bank accounts or under Parliament.
Stop trying to export your tax policies and expect other countries to be your collection agents. We are not paid servants of the IRS, CCRA or HMRC (as a starting point).
Don't criticize, condemn or confuse our progressive and functioning tax systems as one with your own.
Bermuda has a varied and fair tax regime that is rooted in an entirely different collection and measurement approach that shouldn't be ignored or overlooked simply because other countries are either unable or unwilling to adopt different mechanisms for themselves because its politically inconvenient.
We are not poster children for your bad decisions or failed implementation criteria. Stop blaming us for the ineptness of your own politicians who have crafted an environment built on the backs of special interests and narrow mindedness.
Our policies work for our country. If you don't like the results change your own methodologies and stop pointing the fingers at others. You need to own the problem and stop being nimbys about it.
Fezzer :: June 18, 2013 7:39 pm
@Davenport
It's better to be assumed an *****, than open your mouth and remove all doubt!
The Uk need to sort out their own affairs before pointing the finger at us! Some people might claim that Britain is a tax haven compared to France, now that Hollandes socialist tax policies have been implemented, and some wealthy French people have left France for the uk, Russia etc!
Britain is not a banking island, we have 4 banks, and that is it, all which you can walk into on the high street! Cayman however have over 3000 banks which mostly are brass plate banks!
We have had tax information exchange agreements with the US and UK since the 80s and 90s respectively, we are currently on the white list of the OECDs ranking! We have one of the best anti money laundering laws in the world, the US and the UK on the other hand lol, where do you think the worlds money laundering happens, not in tiny bermuda, but of course New York and London, hence HSBC!
Our tax policy for our reinsurance sector is beneficial to the UK and the US as it lowers the cost of insurance for citizens in those countries. When 9/11 occurred about 70% of all payments in the aftermath were paid out by Bermudas companies! The same for hurricane sandy etc.
The UK should change its own laws if it wants companies like google and Thames water to pay its appropriate share of taxes!
http://www.guardian.co.uk/business/2013/jun/10/thames-water-no-corporation-tax
Explain to me how it's Bermudas fault that Thames water pays no corporation tax??
