Finance Minister ‘dismayed’ by Britain’s ignorance

Britain is ignorant of Bermuda’s real role as an offshore finance centre, Finance Minister Bob Richards said yesterday.

And he signalled Bermuda would launch a charm offensive aimed at portraying Bermuda as a well-regulated centre for insurance and reinsurance rather than a dodgy tax haven with a wall of secrecy around it.

Mr Richards said: “We’ve been spending quite a few of our resources and time to make sure people in the US and Congress understand the value Bermuda to them so they don’t pass any legislation which is harmful to Bermuda... 

“We just assumed, because we have this relationship with Britain and representatives from Britain in our midst at all times, that there is an understanding of what Bermuda is all about. I was surprised and dismayed to find out that’s not true.”

He was speaking after Premier Craig Cannonier said that Bermuda had not bowed to pressure and signed up to an Organisation for Economic Cooperation and Development/EU tax information exchange convention in London at a meeting of British territories in advance of this week’s G8 summit of some of the world’s most powerful countries.

Mr Cannonier said that even UK PM David Cameron appeared to have some “misunderstanding” of Bermuda’s business model.

But he added: “After this meeting I do believe that has been cleared up.”

Mr Richards said the British tended to “lump Bermuda in with other jurisdictions with secrecy laws which are involved in money laundering.”

But he added: “We know who owns companies in Bermuda….because we have required them to tell us since the 1940s.”

Mr Richards said: “There is a campaign, a kind of groundswell, against offshore finance centres which is being driven by a number of factors.”

He said that, while the US was coming out of recession, the UK and its European partners were still struggling.

He added: “I believe that the Overseas Territories and Crown Dependencies are to some extent being used as scapegoats and distractions from domestic policies and domestic policy fears.”

Mr Richards said that non-governmental organisations and charities had “latched on to this notion that the Overseas Territories and Crown Dependencies are responsible for these countries not having any money.”

And he added: “Our message, to a significant extent, is being overwhelmed by that noise. We have to up our game.”

Mr Richards said: “It became clear to me that we have a lot of work to do there.”

He added: “We have been reasonably successful in the United States, but we have kind of dropped the ball in Europe.”

Beneficial relationship

Mr Richards said: “We have to up our game in terms of communication to let folks out there know that we have an ongoing and mutually beneficial relationship with the United Kingdom.”

Mr Cannonier said there appeared to be a “grave and great misunderstanding” about the role Bermuda played in international finance.

He added that he had told UK Prime Minister David Cameron that Bermuda had not been given “a fair opportunity” to look at the convention in detail.

He said: “I want to assure Bermuda that we have not signed any agreement. We need to be responsible and in being responsible that we make sure that every T is crossed and every I is dotted.

And he added he had made it clear to Mr Cameron and Overseas Territories Minister Mark Simmonds that “what we do here is look out for nations like the US and UK. When there are catastrophes, it’s companies set up here in Bermuda that pay large amounts when disasters happen.”

Mr Cannonier said: “As of the time that I have left, no one had signed the agreement. There was nothing in the agenda which said we had to sign up. At the meeting, there were no pieces of paper put in front of us we had to sign.

And he added: “Based on this trip, it became very evident Bermuda is one of the leaders when it comes to information exchange and transparency.”

And he said that major nations like the US and Canada had also expressed concerns over the proposed information exchange convention.

Mr Cannonier predicted: “As we move towards tightening the net on illegal activity…….I am sure some agreement will be found, but we are not yet in that position.”