Bermuda's Business Development Agency (BDA) has defended the reputation of the island as an offshore financial centre in the wake of the recent 'Panama Papers' leak that claim international tax evasion on the part of governments and individuals.
Defending the region’s reputation, the BDA said that while there may be businesses, service providers and lax regulatory environments around the world that enable illegal tax evasion, Bermuda is not one of them and that it is a myth that all offshore financial centres are the same.
Bermuda has an extremely positive global reputation built on transparency, compliance and cooperation—these attributes have been differentiating hallmarks of the jurisdiction for decades, according to the agency.
It said that the EU has provided a strong endorsement of Bermuda’s robust, mature, and proficient regulatory environment by awarding equivalency with its own EU Solvency II regime. Bermuda is one of just two non-EU countries to be awarded that distinction.
In the United States, the National Association of Insurance Commissioners (NAIC) designated Bermuda a ‘qualified’ jurisdiction. This is another vote of confidence in the way Bermuda handles its business, according to the BDA.
Bermuda was also the first offshore financial centre to qualify for the Organisation for Economic Cooperation and Development (OECD) ‘white list’ of jurisdictions that have implemented internationally agreed tax standards—jurisdictions not considered to be tax havens by the OECD.
A further differentiator for Bermuda is Bermuda’s contribution to global economies, particularly in insurance industry.
Companies based in Bermuda contributed $35 billion over a dozen years to cover US catastrophe losses and companies in the region paid 9 percent of 9/11 claims, according to the BDA.
It also said that Bermuda companies paid 20 percent of last winter’s UK flood losses, and provide more than a quarter of capacity for Lloyd’s of London. Bermuda also paid 62 percent of claims for the UK’s largest peacetime fire and explosion—the Buncefield oil terminal fires of 2005, said the agency,
The BDA said “Thanks to Bermuda, cities, coastlines, homes and businesses are rebuilt after major disasters. Bermuda’s positive contribution should not be underestimated or overlooked. Overall, Bermuda’s economic model supports close to a half-million jobs globally through trade and investment, including some 350,000 jobs in the US and more than 100,000 jobs in the UK.
“Bermuda understands and embraces the worldwide movement towards greater financial transparency and regulatory cooperation. Bermuda does not have laws that promote and protect banking secrecy. Bermuda complies with global anti-money-laundering directives and anti-terrorist financing standards. And Bermuda has had a beneficial ownership register in place for 60 years.”
The agency also said that Bermuda’s 90-plus tax-transparency treaties with countries around the globe underscore the region’s commitment to cooperation and compliance.
It said that it was inaccurate and ill-informed to homogenise “offshore” and dump all international financial centres into one bucket synonymous with immoral, illegal and nefarious activity.