The new general manager of Bermuda's largest law firm has labelled the proposed United States Congress' "Patriot Tax" as "not well thought through" because it had been put forward in such a rush.

Peter Bubenzer, who this week started as managing partner at Appleby Spurling and Kempe, also said if it ever got through, he doubted the bill would be passed in its present from.

"I am concerned that it is just not well thought out," said Mr. Bubenzer. "It is just a reaction, an emotive reaction. People holding swords up in Congress, that sort of thing."

During this year tax bills have been introduced by US legislators to the House of Representatives, aimed at stopping US companies from relocating offshore, particularly to Bermuda. The bills have been proposed by by Rep. Richard Neal and Rep. Scott McInnis, and several American 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.

The Royal Gazette understands that insurance companies that have moved to Bermuda from the US - which could include PXRe, Scottish Annuity & Life Holdings and Everest Re may also come under scrutiny. But Mr. Bubenzer said that the bills will not have as wide an impact on Bermuda as feared, and will in fact damage the United States and its firms. "Its tremendously political," said Mr. Bubenzer. "You wonder, if a company cuts its tax bill, has more cash flows, is able to keep a factory open that is employing 10,000 people - is that better for the United States or worse for the United States? Particularly since it will still be paying tax on its US source revenue."

He said that he did not believe that AS&K would be affected by an legislation that might be passed by Congress.

He said: "The threat is aimed at a specific and relatively limited group of companies which have sought to relocate to Bermuda, and in some cases have already done it.

"If they implement it, then depending on the form in which it is done, it could have an affect on those companies. But it's very hard to predict whether it will go through."

"I'm not convinced either that it will go through... and if it does I am not sure that it will go through in anything like the form that's been proposed now.

"I wonder how well thought out the legislation has been thought out, because it has been rushed through in a terrible hurry and one of the concerns one has to have is whether or not this is going to do more damage for the US and for US companies in business than it is going to be for Bermuda.

"We've got a very broad-based source of international business not dependent on the relocation of large public companies to Bermuda to keep us where we are. It was a nice... it is a nice area of development for Bermuda, and if we have something to offer that people can legitimately make use of, we are happy to offer it. If it subsequently becomes unavailable for them, then of course it will no longer take place, but of course there are other opportunities for us that we see."

He also said that there were echoes of the Organisation for Economic Co-operation and Development (OECD) and its aim to name and shame jurisdictions with allegedly harmful tax practices.

Mr. Bubenzer said: "There are shades of some of the original expressions behind the OECD in this, in that if you look through it, what they are effectively saying is that you can relocate, as long as it is to somewhere paying tax at a reasonably high level like us, which, in part, you can see at the back of the OECD as well.

"And then I recall, but I may be incorrect, that American government was one of those that had a problem with that concept - of dictating to people their tax regime. If I am right in that recollection, then this would appear to be inconsistent with the stance that the US government took, because it is effectively is dictating to countries what have to pay tax anywhere in the world."

One bill put forward by Rep. Neal, which has been referred to as the "Corporate Patriot Enforcement Act of 2002", proposes to have the amendment apply to "corporate expatriate transactions" completed after September 11.

But an additional clause states that the amendment would also apply to such transactions completed before September 11, "but only with respect to taxable years of the acquiring corporation beginning after December 31, 2003".