Bermuda's international business community yesterday hit back at accusations that Bermuda is helping companies to avoid tax and is playing a non substantive role in the international business economy.

The Bermuda International Business Association (BIBA) gave a prepared statement clarifying some of the issues that have arisen in the media in relation to the Tyco annual general meeting (AGM) taking place today.

"It is critical to note that Tyco did not in fact reincorporate to Bermuda as it has been reported, but rather the location of the company's headquarters in Bermuda was the result of an acquisition made several years ago." stated BIBA chairman, Jeff Conyers.

"In the case of Tyco and other companies that establish their headquarters on-Island, we want to stress that Bermuda does not actively recruit companies to reincorporate in Bermuda. Instead Bermuda has always taken a conservative approach to incorporating companies. This can be seen in the modest number of international companies on our register (approximately 13,000) when compared with other offshore jurisdictions that have hundreds of thousands of companies.

A key element of the conservative approach that Bermuda has taken to incorporations is the rigourous "know your customer review that all applications are subject to. This approach has always been in place in Bermuda, but is only now being put in place in several other offshore jurisdictions and is still noticeably absent in many others.

"Finally, we would like to take this opportunity to highlight Bermuda's long and valued relationship with the United States. There is a highly respected tax convention between our two nations - the US/Bermuda Tax Treaty of 1986 - that sets a precedent for the strength of our relationship. Moreover, it is our success in working together to address key economic issues that has solidified our history of cooperation and respect for our mutual rights to sovereignty and self-government.

"To be clear, Bermuda has always been focused on quality over quantity. Bermuda's broader standing and attractiveness in the international business world is driven in part by a business-friendly environment and a stable and growing economy. Contrary to some assertions, our country is well regarded by the international business community and by a number of international regulatory body and governments including the OECD, FATF, UK and US governments. Bermuda has a history of maintaining and implementing legislative and regulatory provisions that encourage innovation from business while maintaining the highest standards of conduct.

"Bermuda's policy and philosophy with respect to international business transactions is vigorously enforced by both businesses and government, thus ensuring that only legitimate, substantive business is conducted on the Island."