Miliband attack sparks wave of protest
Would-be British Prime Minister Ed Miliband has sparked a storm of protest after he declared war on Bermuda and other Overseas Territories he branded tax havens.
And yesterday the Bermuda Business Development Agency (BDA) added its voice to the chorus of condemnation of the UK Labour leader’s pledge to petition the Organisation for Economic Cooperation and Development (OECD) to put the Island and other Overseas Territories on an international blacklist of “tax havens” if they failed to comply with the UK’s own new beneficial ownership transparency measures.
But the BDA said that Mr Miliband’s warning letter to the territories — which gave a six-month deadline for the establishment of public registers of ownership if Labour wins the next general election, scheduled for later this year — ignored Bermuda’s strict regulation of financial services.
And it added that Mr Miliband should be aware of the Island’s dozens of international tax treaties and its lack of banking secrecy — as well as major differences between the Overseas Territories themselves and the Crown Dependencies.
BDA chief executive officer Ross Webber said: “The approach is both broad-brush and yet discriminatory in that it groups together the UK OTs and CDs and excludes the larger G8 countries that also do no not have public registries of beneficial ownership.
“In fact, some of the latter don’t have any type of meaningful register, let alone a public one.”
Mr Webber pointed out that Bermuda had operated a register of beneficial owners for more than 70 years.
And he said: “We did this without being coerced or asked by any other countries, organisations or governments in the world,” said Webber. “This was something Bermuda chose to do proactively because we have always been very conscious to safeguard the reputation of our jurisdiction.
“We have never been in the business of banking secrecy — we don’t have bank secrecy laws. We also do not differentiate between local companies and exempted companies.”
Mr Miliband’s letter want to Anguilla, the British Virgin Islands, Cayman Islands, Turks & Caicos, Gibraltar, Montserrat and the Crown Dependencies of Jersey, Guernsey and the Isle of Man, as well as Bermuda.
Bermuda Premier Michael Dunkley was first out of the blocks to counter Mr Miliband’s letter.
The current UK Conservative-led coalition government has already passed a law requiring a public disclosure regime, where companies will have to file ownership information by April next year.
Mr Webber said: “We’d be very interested to see the mechanism by which this works.
“Bermuda would need to study it and see if it’s a feasible system. Until we actually see it in operation, it’s going to be difficult for us to assess whether it’s a system worth adopting and whether it would be appropriate for our jurisdiction.”
Other territories have also weighed in to criticise Mr Miliband for his stance.
Chairman of the Cayman Islands’ Stock Exchange Anthony Travers said Mr Miliband was “hopelessly out of touch” on international tax avoidance.
Mr Travers added: “In fact, the Overseas Territories have maintained complete records on overseas beneficial ownership to to the international gold standard set by the OECD for over two decades.
“What quite the OECD would make of Mr Miliband’s threatened report given the OECD’s own verification on the subject and the Overseas Territories’ commitment to the OECD automatic reporting standard is a matter for conjecture and possible further embarrassment.”
Mr Travers said that the UK’s Her Majesty’s Revenue & Customs (HMRC) and the US Internal Revenue Service (IRS) already had “unlimited powers” granted by treaty with Overseas Territories to investigate beneficial owners.
He added that OECD General Secretary Angel Gurria had already said that companies could not be blamed for taking advantage of lawful tax avoidance — and that individual countries should amend their own tax laws if they felt there was a problem.
Mr Travers said: “An informed politician, genuinely concerned about tax evasion and tax avoidance, as opposed to to making popular sound bites, should be lauding the standards of transparency set by Overseas Territories as the example to which other jurisdictions, notably the wholly opaque US corporate centres of Delaware, Wyoming and Nevada, should now be held and making more detailed enquiry of the double tax treaty abuses that are routinely adopted in European countries.”
Gibraltar’s chief minister Fabian Picardo said the territory was not a tax haven — and had a tax information exchange agreement with the UK.
Mr Picardo added: “There is a balance to be struck between inappropriate secrecy and the right to protect privacy and indeed confidentiality.”
The Guernsey Minister of Treasury and Resources Gavin St Pier said the Crown Dependencies parliament, the States of Guernsey, had yet to receive Mr Miliband’s letter.
But he added: “Guernsey is also one of the very few jurisdictions in the world that regulates trusts and corporate service providers in order to provide timely and robust beneficial ownership information.
“We would of course be pleased to share our extensive experience with the UK to enable it improve its own standards in this area.
“We will be very interested to hear how Labour plans to compel other countries to meet the same standards that Guernsey meets.”
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