Richards to raise tax haven list in EU talks

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  • Finance Minister Bob Richards

    Finance Minister Bob Richards

Finance Minister Bob Richards yesterday hit back after Bermuda was put on an EU blacklist as part of bid to crack down on multinational companies dodging tax.

And he pledged to raise the problem with EU officials on a trip to Europe next week.

Mr Richards will meet representatives from the Organisation for Economic Cooperation and Development (OECD) as well as high-level EU figures.

Mr Richards said: “I will be raising this — we will do our very best for Bermuda.”

Mr Richards earlier branded the blacklist as “unjustified and baseless” — and said that some of the countries that fingered Bermuda had failed to live up their own obligations to sign up to tax conventions.

Mr Richards added: “At least five of those 11 EU member states that have us on their national blacklists have not performed their obligations in one way or the other.

“Two of the five were to give beneficial recognition to the Multilateral Tax Convention in their blacklist criteria; one is still in the process of considering recognition of the Multilateral Convention; one has not kept their promise to send Bermuda documents to sign to take us off their list.

“One of the two EU member states earlier mentioned has not even signed up to the Multilateral Tax Convention; and; one publicly announced earlier this year that it had taken Bermuda off its blacklist.

“We have been waiting for their cooperation. It is surprising then that we would be labelled as ‘uncooperative’.”

Countries were included on the list if 10 or more EU member states had them listed on their own national blacklists. Bermuda appears on the list of 11 EU member states.

Mr Richards added that Bermuda has signed a large number of tax information exchange agreements with countries around the world and today has 80 treaty partners because of signing the Multilateral Tax Convention — an international tax information exchange agreement.

Those 80 partners include all G20 countries, all OECD countries except for one, and all EU countries except for two because those three countries have not yet signed the international standard on tax matters, the Multilateral Convention.

Mr Richards said: “A closer scrutiny of this latest development reveals something wrong with this process.

“To be included on this new ‘uncooperative’ list, one would have to be ‘blacklisted’ by 10 or more EU member states — not nine, eight, seven or six.

“Why they used ten speaks to a lack of transparency.

“Not all EU members agree on how they compile their blacklists. Some are based on a combination of tax transparency concerns and low tax rates; others are triggered by low tax rates alone, and some are triggered by a lack of a tax information exchange agreements.”

And Mr Richards pointed out that international bodies like the United Nations, the World Trade Organization and the OECD all recognised the sovereign right of individual countries to set their own tax policies.

He said: “Any national list whose trigger includes low or no income tax should be disqualified.

“If there had been consultation, we would have had the opportunity to point out that at least five of the 11 countries named as blacklisting Bermuda had either not performed their obligation required to consummate a tax information exchange agreement with Bermuda or had failed to keep their promise made to Bermuda to amend their legislation to remove us from their blacklist.

“Bermuda prides itself in being a highly cooperative business centre and has gone the extra mile to be ahead of the curve in this respect.”

Ross Webber, CEO of the Bermuda Business Development Agency (BDA), said: “We’re concerned the EU has labelled Bermuda among ‘non-cooperative’ jurisdictions. It points to misunderstanding and a lack of education about Bermuda’s economy and, more fundamentally, an imbalanced process.

“Our jurisdiction has proven one of the most transparent and compliant international financial centres in the world. Our 80-plus global treaty partnership and OECD white-list standing attest to that.

“We actively support global efforts to tackle corruption, tax evasion, terrorism financing and money laundering — but this report does not help advance such a goal.

“Bermuda’s economy supports hundreds of thousands of jobs globally and leading economies rely on us. In discussions like this, it’s critical that financial centres that add value — like Bermuda — are differentiated from those that do not.”

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Published Jun 19, 2015 at 8:00 am (Updated Jun 19, 2015 at 8:02 am)

Richards to raise tax haven list in EU talks

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