Experts line up to defend Bermuda’s transparency
Bermuda has reacted to recent media scrutiny stemming from hacked data from global law firm Appleby by accusing the media of not understanding offshore investment structures and describing the term "tax-haven" as a badly-understood term, particularly by non-trade media.
In a lengthy response to recent criticism and widespread reporting of Bermuda’s role as an offshore jurisdiction, the Bermuda Business Development Agency, has issued a lengthy statement clarifying its position offering perspective from a number of experts including Brad Kading, executive director of the Association of Bermuda Insurers & Reinsurers (ABIR), and Grainne Richmond, president of the Bermuda Insurance Management Association (BIMA).
The letter stressed that Bermuda is committed to the exchange of relevant information to legitimate regulatory, tax and law enforcement entities. These can request and receive information from Bermuda under information-sharing agreements, including TIEAs and a multi-lateral treaty with more than 100 countries, it said.
It also noted that the automatic exchange of financial information is also an established part of its economic system and the island's early adoption of OECD standards for Base Erosion and Profit Sharing (BEPS) compliance demonstrates this transparency via several agreements that ensure automatic transmission of taxpayer financial data to relevant authorities.
“Bermuda does not qualify as a tax haven under a clear OECD definition that stipulates criteria, including lack of transparency and lack of information exchange. No or nominal tax is not sufficient to classify a country as a tax haven. OECD definitions, notwithstanding, the term "tax haven" is synonymous with tax evasion and secrecy-neither of which describe Bermuda,” the letter said.
It added: “Bermuda understands and embraces the worldwide movement towards greater financial transparency and regulatory cooperation and continues to commit to international tax disclosure and compliance. We've shown leadership in this sphere and have helped drive global anti-money-laundering directives and anti-terrorist financing standards. These factors differentiate Bermuda from other financial centres, and we stand by that reputation.”
Kading wrote: "Bermuda is a place where capital is put to work taking on insurance risk. It is a unique jurisdiction where its substantive insurance regulation has been recognised by both the EU and the US as robust and comparable, and where international regulatory standards are applied. MOU's with leading insurance regulators mean that cooperation with insurance supervisors in the EU, the US, and around the world is part of a routine.
“This regular information exchange is complemented by treaty commitments with more than 100 jurisdictions for taxpayer automatic exchange of information with global tax authorities. Bermuda's global (re)insurers provide significant amounts of capacity that make insurance markets more competitive. Bermuda's international regulatory and tax commitments are a necessary complement to the role our (re)insurers play in global markets."
Richmond added: "Bermuda has consistently ranked as a global leader in regulatory compliance and transparency. BIMA, its regulated members and the regulated entities they represent, work hard to maintain adherence to those high standards. BIMA fully supports the Bermuda government and its intolerance of illegal activity or breaches of compliance with Bermuda regulations and legislation. BIMA and its members will continue to support the interests of our clients, protect the interests of their policyholders, and we reiterate our commitment to the highest standards of regulatory compliance and transparency."