American lawmakers will waste no time in helping President-elect Barack Obama to fulfill his campaign promise to "shut down the tax havens", a leading US Senator has indicated.

Sen. Carl Levin said the Stop Tax Haven Abuse Act — a bill which names Bermuda as one of 34 "offshore secrecy jurisdictions" — will become law next year with the support of the new president

"The President-elect has co-sponsored our bill, which goes after the misuse of these tax havens, the avoidance of taxes by American taxpayers, individuals and corporations using the Cayman Islands and all these other places to avoid paying their bills to Uncle Sam," Sen. Levin said in an interview broadcast on Bloomberg Television last Friday.

The bill aims to clamp down on Americans who hide assets offshore and will extend the powers of the US Treasury to take punitive measures against countries believed to be impeding American efforts to track down tax dodgers.

Finance Minister Paula Cox said yesterday that Bermuda shared US concerns about tax evasion and had been helping the Americans with such investigations for two decades under an exchange-of-information agreement between the two countries that dates back to 1988.

Sen. Levin and his Democratic Party colleague, President-elect Obama, introduced the bill with Republican Norm Coleman in February 2007. It would impose stricter requirements on US taxpayers using offshore jurisdictions, impose tougher penalties on abusers, close offshore-trust loopholes, and allow the Treasury Department to take action against foreign countries that impede enforcement of US tax laws.

Bermuda may consider that it has less to fear from the increased scrutiny than major offshore banking centres, such as the Cayman Islands. Bermuda has just four banks, while hundreds are based in the Caymans.

Ms Cox said the Finance Ministry would monitor any further developments with the bill, if it reappeared on the tax policy agenda after President-elect Obama's inauguration next month.

"This Government shares Senator's Levin's concerns about tax dodgers," Ms Cox told The Royal Gazette. "Bermuda has assisted the United States in its efforts to stem tax evasion for 20 years through the tax treaty that was signed in 1988.

"Indeed the US Internal Revenue Service has commended Bermuda for its very co-operative assistance through the tax treaty. The Government of Bermuda has established and maintained positive relationships on Capitol Hill and the tax treaty should stand us in good stead should there be a need."

The bill names a wide range of financial centres as "offshore secrecy jurisdictions", including 14 in the Caribbean, plus relative giants such as Hong Kong and Switzerland.

US Internal Revenue Service court filings, identifying these locations as "probable locations for US tax evasion", were used as the basis for the list.

According to the wording of the bill, the new law will direct the US Treasury Secretary "to list jurisdictions with secrecy laws or practices that unreasonably restrict US tax authorities from obtaining needed information, unless the jurisdiction has information exchange practices that effectively overcome these secrecy barriers". The Treasury will be able to add or subtract jurisdictions from the list, as circumstances change.

The new law will also clamp down on financial institutions that provide "products or services that aid or abet tax evasion".

Sen. Levin has estimated as much as $100 billion in revenue owed under US tax laws goes uncollected annually because of assets hidden overseas. And this year the US has investigated banking secrecy practices in Liechtenstein and Switzerland, where it suspects many of its citizens have stashed undeclared funds.

In response to US concerns, Swiss bank UBS has stopped offering offshore banking services to about 19,000 US clients, many of whom are being pursued by the IRS and the US Justice Department.

Today, the US and Liechtenstein will sign their first agreement to exchange tax information, as the IRS suspects Americans are hiding assets in the principality's banks.

Last week, the New York Times reported the US was starting an investigation into offshore private banking services provided by HSBC and Credit Suisse. HSBC, which provides private banking services on the Island through the Bank of Bermuda, said it was not aware of any investigation by the US authorities.