Bermuda officials attending the RIMS insurance conference in New Orleans this week would do well to spend a good deal of time trying to build support for the Island's international business community which faces a new threat from lawmakers in Washington, DC.

It comes as a result of companies that have moved from the United States to Bermuda and other offshore financial centres to redress a competitive disadvantage that the US tax code places them in. Or at least that is one way of looking at it; US lawmakers see these moves as an attempt to avoid pay US taxes and look at that particularly dimly now in the wake of September 11 and the collapse of Enron.

Manufacturing companies like Stanley Works and Ingersoll-Rand who have moved to the Island or plan to do not have a physical presence on the Island and do not in fact contribute an enormous amount to the Island's economy. But there are other companies such as Tyco and a number of insurance companies that could get caught in the same web by this legislation that do contribute enormously to the Island.

The benefits that Bermuda receives will not do much to influence the United States Congress, however. What Bermuda needs to point out to here is that these Bermuda-registered companies do pay US taxes on the revenues that they derive in the US. Where they gain an advantage from being based in Bermuda is in not having to pay US taxes on revenues they have earned elsewhere. This in turns enables them to compete with other global companies that do not have to operate under the US tax code and that in turn may mean that they are able to continue to manufacture in the US and to employ Americans.

Making it clear that this issue is not simply a matter of putting profits above taxes is vital as Bermuda continues to tackles these issues. That's a nice sound bite, but it does not reflect the reality that either Bermuda or the US faces. The global economy is much more complex than a one-minute segment can explain on the nightly news and Bermuda needs to use all of its persuasive powers and influence to make its case.

It is worth remembering how much money Bermuda companies have paid out in insurance claims related to the September 11 attacks, and how fast Bermuda-based companies like Ace and XL were in settling the claims. That emphasises how central Bermuda companies are to the world financial system. It is these arguments that Bermuda needs to make to the insurers and others attending the RIMS conference in New Orleans this week.

This is not a question of one nation taking on another; it is a question of maintaining the stability of global business.