Premier Jennifer Smith came out batting for Bermuda yesterday and has said that it was unacceptable for one country to tell another country what to do about their taxes.

It was the Premier's first public response to recent attacks on Bermuda from US lawmakers, who claim companies reincorporating in Bermuda to save on their tax bills are choosing profits over patriotism.

In an interview with The Royal Gazette in New Orleans while attending the annual Risk and Insurance Management Society (RIMS) conference, Ms Smith said:

"We don't expect other countries to tell us how we should collect our tax," she said, "so I am not going to be in a position of commenting on how another country collects their tax."

The move by US Senators against companies moving offshore to cut their tax bills gathered steam last week after lawmakers pushed new legislation that would halt companies reincorporating in tax-friendly locations, like Bermuda.

US Senate Finance Committee leaders met on Friday and said they would aggressively press for legislation that stops US companies from moving their headquarters overseas to cut taxes.

"Our legislation... is designed to put the brakes on the potential rush to move US corporate headquarters to tax havens," said panel chairman Max Baucus, of Montana.

Already this year US legislators who have introduced two bills to the House of Representatives seeking to restrict the flow of companies offshore, singling out Bermuda as the tax-haven of choice.

The bills have been proposed by Rep. Richard Neal and Rep. Scott McInnis and several legislators have indicated they will put forward further bills, including Sen. Paul Wellstone and Sen. John Kerry.

In essence, the bills aim to levy US taxes on all income - including foreign revenues and sales - earned by corporations that reincorporate outside of the US.

The debate has largely focused on Bermuda-based companies such as Tyco, Global Crossing, Ingersoll-Rand and a company which has not yet "redomesticated", Stanley Works.

On Friday, Weatherford International Ltd also announced plans to move to Bermuda; shareholders are expected to be voted on the move by the end of the month.

On Thursday, Sen. Baucus said he plans to bring the bill up for a vote soon and added he was "quite confident" the legislation can be passed into law this year.

"We've got a problem," said Sen. Baucus, who pointed out that the vast majority of US individual taxpayers were expected "to do their duty" by yesterday's income tax filing deadline. "Everyone should help pull the wagon... Otherwise, we'll reach the point where honest taxpayers will feel like chumps," he said last week.

In spite of the political climate in the US, the Premier was yesterday flying the Bermuda flag along the north bank of the Mississippi river at New Orlean's Ernest N. Morial Convention Center.

"First of all, I think there is a great misconception that Bermuda is a tax haven," said Ms Smith. "We are not a tax haven. I think it is important to understand that Bermuda's tax system is over 100 years old and was designed to suit the needs of Bermudians. It certainly was in existence at least 50 years before international business ever came about."

Ms Smith continued: "What else is not true is that Bermuda provides some special concessions for international business. They pay the same taxes that local businesses do, and in fact, because our taxes are based on consumption rather than company fees and licences and other things, our Customs' duties are among the highest in the world, and they pay those, just as every one else does.

"So, I think first we have to start by correcting that misconception. There are no special circumstances. What exists is a country whose system is designed to meet its own needs and who now in the 21st century finds that its over 100-year-old system is attractive to other people."

Ms Smith says Bermuda's speciality was offering superior service.

"We are a legitimate jurisdiction offering legitimate services to companies who want to be in a well regulated, well structured developed jurisdiction with a good reputation. Bermuda is not the kind of country that is known for a laissez-faire attitude when it comes to business. In fact we jealously guard our reputation.

"We focus on our 'know-your-client' rules, and that's entered into by both Government and businesses who I think are among the first to guard their own, because earning that reputation has come about over time and it's been a joint effort and it is not something that you take lightly.

"We have just been through a most exhaustive series of reviews and inspections by every financial regulatory body around the world, and we have come out of those various reviews I think quite well because they have all agreed that Bermuda has good regulations. It has legislation that is up to the global standards in terms of what is expected of countries and we are very careful to screen our clients, those businesses wanting to set up in Bermuda.''

Ms Smith added: "In fact, I can say that to date, Bermuda is not known for doing any money laundering or things like that. You can't say we are perfect, but we certainly do everything that is expected and required of Governments and of laws and of rules to ensure that it is a well-run jurisdiction. So I think that whole thing should be put to rest."

Ms Smith gave the example of globalisation and said it was ridiculous to try and set up protectionist regulations that would stifle the efforts of companies wanting to grow globally.

She said companies were interdependent in the same way as countries, and companies were no longer operating solely in one jurisdiction.

"Does this call for a new way of dealing with these various companies? Perhaps, but I don't think that way is one that would discourage them from coming into existence. I would think that it would be a method that, while encouraging their formation, would understand the particular circumstances which generated that formation," said Ms Smith.

Commenting on the influx of capital into Bermuda following September 11, Ms Smith said it was not just because off the well-regulated jurisdiction, but also due to the intellectual capital the Island attracted.

"What you have is a fertile breeding ground for ideas and responses to whatever happens in that particular market. And so when a new situation presented itself, because Bermuda is strategically located, because you have the best minds there, they were very quick to come up with a response," said Ms Smith.

Ms Smith will be in New Orleans for the duration of the conference, which ends Thursday.

On her first visit to the city, Ms Smith said: "I am looking forward to seeing some of the city. I have just in passing looked at some of the distinctive architecture. I can say that I was very interested in the Museum of Art and its location in a park.

"I think that the city of New Orleans is very welcoming to conventions and I think that Bermudians find that with their interaction with the south in general, quite a lot of empathy because there are many similarities in terms of culture, although this is a very multi-cultural city."

Bermudians getting jobs in international business.

Premier Jennifer Smith is not concerned about Bermudians finding employment in the Island's international business sector.

Speaking with The Royal Gazette in New Orleans where the 40th annual Risk and Insurance Management Society (RIMS) conference is being held, Ms Smith said of concerns raised by PLP backbencher Dale Butler earlier this year on the lack of Bermudians applying for jobs in the sector: "I don't know what Mr. Butler said, although I know what he is referring to. What I do know is that Government has a multipronged response to prepare Bermudians for jobs in the marketplace, ensuring that they take advantage of the opportunities that are presented, and ensuring that we have a means of seeing that Bermudians are able to move upwards within those companies."

Ms Smith said that if Bermudians were not applying for jobs, it could be related to when the job was advertised.

She said: "Certainly if you are advertising at a period when you don't have the returning university students come back, and we know that we have overemployment, then certainly it would not be I think astonishing to find that you didn't have a large number of Bermudians applying."

Ms Smith added: "Maybe all those Bermudians are working as I would think most Bermudians in that area would be working."

She said: "The time that you would find Bermudians making themselves available are when the universities graduate, so you are looking at May and probably June. Then you have a group of university students all desperately looking for jobs."