Becoming an associate member of Caricom may not be necessary and should be fully discussed says Opposition Leader and Shadow Finance Minister Dr. Grant Gibbons.

Speaking with The Royal Gazette, Dr. Gibbons said: "At this point one of the challenges that the Ministry of Finance will have with Caricom - and particularly when you look at the Treaty of Chaguaramas which is looking at a single market community for the Caribbean states - is that we have spent a great deal of time and effort over the last five years differentiating ourselves, both in the US, the UK, and certainly in the EU, from other offshore Caribbean and indeed other offshore states.

"And I think this has been extremely important in maintaining or building a reputation for Bermuda for a jurisdiction that is well supervised, well regulated, and which does in many respects a very different type of business in financial services and insurance than a lot of other jurisdictions which tend to be more offshore banking orientated."

Dr. Gibbons continued: "And this has gone a long way to making us attractive as a place - especially if you look at the latest wave of insurers coming in - which is attractive not only for insurers, but also for trust business, mutual funds, financial serve companies, and hopefully as we get further down the road, more financial services which are e-business related."

Dr. Gibbons says the very principles in which Caricom and the Treaty of Chaguaramas (The treaty establishing Caricom in 1973) is based such as integration of economies, free moment of labour and capital, the right to buy land in any of the member countries, the right to set up businesses freely in any of the member countries, and that labour can migrate freely in the member countries, are a 180 degrees from where Bermuda has been for the last 15 to 20 years in terms of being very protective as to who sets up business here, who buys property here, and who comes here to work.

"But I think as far as the Ministry of Finance is concerned, the principal issue here is that a lot of these countries have banded together to address the OECD, FATF Financial Stability form and others, as a common group, and I think that would be counterproductive for us as I think that would undo a lot of the effort we have put in, the UBP and the current Government in terms of differentiating Bermuda, to maintain what I think is a well-deserved reputation for a stable, well regulated jurisdiction," said Dr. Gibbons.

He also said that the changing direction the US Government is taking in respect to recent terrorism and money laundering perspectives will mean that it will become more difficult and probably more expensive for local financial institutions such as banks to comply with a much greater degree security and steps that must be taken in terms of transfer of money and setting up businesses and issues such as correspondent banking.

"The cost of business will go up and get a lot tougher," said Dr. Gibbons. "When you look at the new UK Treasury rules and the new EU anti-terrorism rules, all of those involve greater restrictions, and certainly increasing the overall difficulty and cost of doing business if you are in an offshore jurisdiction."

As far as joining Caricom Dr. Gibbons says: "I am taking the single issue of Bermuda as a financial jurisdiction and I am saying that there are probably many reasons why it would be counter productive for us to join this association of states as our independence and our ability to maintain flexibility and not have to adhere to someone else's agenda.

"In terms of foreign policy with regard to these sort of regulatory and supervisory kind of things, we certainly don't want to dance to some one else's drum roll on this kind of thing if we can avoid it, because we as a colony jurisdiction are very different to other ones that are members of Caricom."

Dr. Gibbons also said there may be hidden costs to joining the organisation saying: "I think we have had a recent taste of some of the hidden costs of Caricom as well when you look at the marketing summit which the Premier and David Allen went to recently.

"They came back and said that this would be a joint marketing initiative to deal with the September 11 issue, and it was going to be a marketing campaign specifically to promote the Caribbean. We were being asked - and the figure wasn't released - but it was our understanding that it was in the hundreds of thousands of dollars, contribution from Bermuda toward this marketing campaign.

"They were looking for $16 million from Governments and private sector, and Bermuda was being asked for hundreds of thousands of dollars essentially to promote the Caribbean as a destination for tourism."

However Dr. Gibbons contends: "We are not in the Caribbean, our seasons are different, and I think quite frankly... this is a good example of some of the hidden costs when you look to join a membership of a group. I think there are a lot of other pros and cons as well but we will wait to talk about those until we get further into the year and we get a clearer sense, and I think this is important, we should get a clearer sense from Government as to what their objectives really are in joining Caricom."

Dr. Gibbons said there had been no clear definition from Government as to why they feel it is important to join Caricom and added: "And we certainly haven't had any clear sense of what the broader ramifications are for Bermuda or indeed the costs.

"There clearly are costs which Bermuda has to think about very carefully and balance this off against whatever the positive aspects are that Government sees, and I think we have to ask the additional question as to whether the positive associations might come about through other means than associate membership."

Dr. Gibbons gave the example of when the UBP Government was charged with taking over responsibility for the airport: "Maxwell Burgess and I did a survey of three Caribbean countries to look at how they managed as a small country to run an international airport.

"We looked at Trinidad (not such a small country), Barbados and Grenada, and we got a lot of cooperation and had some very good discussions with these countries, but we didn't need to be part of Caricom in order to be able to have their cooperation and their providing information about some of the challenges they faced in running their own airports. It was a useful exchange of information but there was no need to be a member of Caricom."

Dr. Gibbons said there are clearly benefits from a cultural perspective and there many be benefits on a number of other levels that would hopefully be made clear by Government in due course.

Finance Minister Eugene Cox could not be contacted for comment.