AHEAD of next week's highly anticipated 2009-2010 Budget, Minister of Finance Paula Cox has spoken to the Mid-Ocean News to assure the Bermuda public that her Ministry is intent on "safeguarding the economy" as the island faces international scrutiny as a so-called 'tax haven'.

"The Ministry of Finance is responsible for safeguarding the economy and for promoting growth and development," Ms Cox said.

"So what should we do? Well, Bermuda will not sit idly by and play the victim – we have a story to tell and we are gong to tell it and marshal all the necessary resources to do this.

"We are distinct and can and do differentiate ourselves from the herd. Our reputation is a very good one in the financial services marketplace and we aim to keep it that way. Not by complacency, not by inaction but by a focused directed strategy where we have assessed growth opportunities."

Ms Cox went on to explain the decision to hire a PR agency to promote Bermuda as a jurisdiction "still open for the right type of business".

"The Ministry announced some years ago that it was taking a more direct role in marketing Bermuda as a premier financial services jurisdiction given the strategic importance of the financial services sector in Bermuda's economy," she said.

"The relationship with [US-based PR agency] Marston Webb is a continuation of the Finance Ministry's work to preserve and strengthen Bermuda's competitive positioning as a premier international financial centre. The international business sector generates more than $1 billion in foreign exchange earnings annually."

Ms Cox seeks to reassure the public that Bermuda's Finance Ministry is taking "the necessary steps" to uphold international standards of transparency amid increasing accusations from both the US and the UK that the island is one of a number of jurisdictions operating as 'tax havens'.

"As scrutiny of international financial centres increases, Bermuda is taking all the necessary steps to ensure that we maintain our reputation as a stellar international financial centre, upholding the standards of transparency and exchange of tax information promoted by the Organisation for Economic Co-operation and Development (OECD) and its members," she said.

She claims Bermuda "saw the handwriting on the wall" long before 'tax havens' started dominating headlines, and directed Finance Ministry resources to focus on transparency and tax information issues. A "small cohesive unit" was formed to tackle the subject, headed up by Assistant Financial Secretary Wayne Brown.

Ms Cox added that, in the face of pressure on newly-elected President Obama to close 'tax loopholes', Bermuda seeks to reassure the US that it is a "partner" in seeking out tax evaders.

"Bermuda affirms our longstanding position that we do not adopt or promote measures that have been characterised as harmful, such as legislating bank secrecy or embedding in legislation similar measures that prevent disclosure of information," the Finance Minister said.

"Bermuda is, in fact, a partner in one of the longest standing tax information exchange treaties with the United States, signed on December 2, 1988. Over the years, Bermuda has assisted the IRS in resolving tax evasion suits against US citizens, and is lauded by the IRS as an invaluable partner in reducing tax crimes."

Ms Cox agrees with US Consul General Gregory Slayton, who stated upon last month's signing of a mutual assistance treaty between the US and Bermuda that the two countries will continue to have an "excellent working relationship".

"On January 12, Bermuda signed the US-Bermuda Mutual Legal Assistance Treaty (MLAT) to further improve the effectiveness of the law enforcement authorities of both Bermuda and the US in the investigation, prosecution and prevention of crime through cooperation and mutual legal assistance in criminal matters," she said.

"At that time, U.S. Consul General Gregory Slayton pointed out the following: 'The US and Bermuda this year celebrate a 400-year-old partnership and this treaty represents a major step in advancing law enforcement co-operation between our two countries. The US and Bermuda already have an excellent working relationship on law enforcement matters and this treaty will help formalise and solidify that relationship by creating a direct channel of contact between prosecutors in each country'."

Ms Cox told the Mid-Ocean News that the recent media furore surrounding the 'Stop Tax Haven Abuse Act' is somewhat misguided, especially as other less transparent jurisdictions are more exposed to criticism.

"Much has been made in the press recently of 'tax havens' receiving attention in some previously proposed US Bills, for example the Stop the Tax Haven Abuse Act and a Bill pertaining to related party reinsurance," she said.

"However an issue that often gets overlooked is that many other jurisdictions are named and implicated in the Bills including Switzerland, and that the focus of the Stop the Tax Haven Abuse Act is to authorise special measures against 'offshore tax secrecy jurisdictions'. Germany and France in the latter part of last year called for a certain jurisdiction to be placed on the OECD blacklist.

"Bermuda was not included on the list. It is also important to reinforce the point that Bermuda is not alone in being targeted as a perceived threat to the United States and European Union. Switzerland and other jurisdictions are just as exposed, more so if they do not have OECD compliant exchange of information mechanisms and transparency in banking as Bermuda does. In fact, the proposed US Bill against secrecy havens lists dozens of jurisdictions including Barbados, Malta, Mauritius, Belize, and a number of Caribbean and Pacific nations."

The Finance Minister also reported having recently met with business industry bodies and international companies locally, with a view to "domestic outreach" in the face of global recession.

"The Ministry of Finance continues to meet with various domestic industry bodies and individual companies and firms on a regular basis," she said.

"The meetings have provided grounds for optimism despite the challenges. All have expressed a keen interest in substantially upgrading their involvement with the Ministry of Finance and the Registrar of Companies. Some firms have also been asked to identify key individuals within their institutions to deal directly with the Registrar of Companies, the Business Development and Regulatory Unit within the Ministry of Finance.

"The purpose of these arrangements is to resolve routine queries and process challenges as quickly as possible at a decision making level. The Ministry of Finance and the Registrar of Companies have also arranged briefing sessions for the registry staff and other relevant technical officers within the government in an effort to enhance their understanding of the role that external agencies play in the financial services sector and the development of public policy. During the month of January, briefing sessions have been held with ABIR, the Bermuda Insurance Institute, the Central Policy Unit within the Cabinet Office, and Ernst & Young."

With the Budget announcement a week away, Ms Cox predicts a "memorable" 2009, adding that Bermuda "will stay steady" despite the worldwide downturn.

"2009 is going to be a memorable year on many fronts," she said.

"I have no doubt that Bermuda will stay steady as she goes, notwithstanding the challenges.

"We have the people, the network and the capacity. We don't even need to have good news but we need no more bad news. Our steadfastness as a community and our natural resilience as a community, working in tandem with us all putting our shoulders to the wheel and pulling in the same direction, will assist us to navigate these interesting times."