The Minister of Finance, Paula Cox, has come out gunning for Bermuda against the Minnesota legislators who want to block government from giving contracts to companies based on the Island ? and other so-called "tax havens".

Ms Cox said that the bill passed on Tuesday appeared to "violate" fundamental principals of fair treatment and market access ? and she said that Bermuda was not even a tax haven.

The legislation was passed through the first committee stage in Minnesota, and has one more committee before it goes before the House of Representatives there for a vote.

And it has a much greater chance of being passed than normal as in the run up to the US Presidential elections both Republicans and Democrats have been trying to out-do each other in being seen to be "patriotic" and against fiscal abuse.

"Bermuda must be ever vigilant in defending its national economic interests," said Ms Cox. "Over the course of the last two years, individual US states have engaged in unfair and discriminatory trade practices that posed some risks to Bermuda's international business sector. The recent legislative development in Minnesota seems to fall into the same category."

And she said as part of the response to these kinds of economic threats, Government considered that there was merit in joining one or more organisations to have access to a forum where unfair and discriminatory trade practices or actions against or indirectly aimed at Bermuda can be challenged and resolved. She said: "One such organisation is the World Trade Organisation, better known as the WTO. The WTO deals with global rules of the trade in goods and services between nations. The actions taken by some of the US states in the past two years, and now by the State of Minnesota, appear to violate fundamental WTO principles of fair treatment and market access."

She said that the Ministry of Finance has started work on assessing the merits of joining organisations such as the WTO and other international groupings where there may be strategic support for some of Bermuda's economic objectives.

"I also wish to say that the legislature in the State of Minnesota is misinformed if it believes that Bermuda is a tax haven. Bermuda is not a tax haven," said Ms Cox. "Government considers that the Minnesota legislature could determine this on its own if it conducted the necessary research with the US Federal Government (Internal Revenue Service) or the Organisation for Economic Co-operation and Development.

"Bermuda's taxation system is consumption-based and it is correct that we do not have corporate income tax. Our tax system has been in existence for more than 100 years and, therefore it pre-dates international business as we know it today. It was designed to serve our own unique circumstances in Bermuda. It was not designed, and it has not been adjusted to siphon off tax dollars from other jurisdictions."