Bermuda under the microscope to rule centres having harmful tax laws.

Bermuda and other territories like the Channel Islands are set to take part in the in-depth consultations until December when the international body will draw up its final harmful tax jurisdictions hit-list.

But OECD tax group chief Jeffrey Owens has given some gentle encouragement to the more than 50 centres which could be forgiven for feeling under siege right now for the tax laws they have chosen.

He said: "The more we engage in dialogue with these territories the more we understand each other.

"To date I am very pleased with the level of co-operation we have experienced. However we hope to deepen our understanding of these territories and their tax systems over the coming consultation period.'' The meetings were launched at the end of the third pow-wow of the OECD's Forum on Tax Competition, at which the results of previous fact-finding missions were presented.

That Forum aimed to narrow its list of suspected tax havens to find those whose tax practices "distort'' global flows of capital.

In particular it wants to curb regimes which harm trade.

As The Royal Gazette has reported over the past months, the OECD has been collecting information on these centre's tax systems to find out what exactly makes them tick.

But now the body is to engage in deeper dialogue with the centres so it can draw up its final hit list of areas found to have harmful tax rules by the end of the year.

The list will be presented to OECD chiefs early in 2000.