Minister of Finance Eugene Cox has come out to bat for Bermuda against hostile press reports that have cast doubt on the integrity of the Island.

On Monday The New York Times ran a front page story headlined "US Corporations Are Using Bermuda to Slash Tax Bills" followed by a sub headline "Profits over Patriotism".

And it said insurance companies have flocked to the Island to escape not only taxes but "most insurance regulations".

Mr. Cox said: "As a jurisdiction, Bermuda remains committed to operating in a transparent manner and to conducting quality international business with fit and proper persons."

Bermuda International Business Association (BIBA) chairman Jeff Conyers added: "Contrary to some assertions, our Country is well regarded by the international business community and by a number of international regulatory bodies and governments including the OECD, FATF, UK and US governments."

The New York Times article also criticised the outdated US tax policy and said many companies were being driven offshore by the country's corporate tax system.

And in an extensive response to the articles Mr. Cox said: "During the last few days there has been considerable media attention given to certain large, American, New York Stock Exchange listed multinational companies that have recently elected to incorporate parent companies in Bermuda.

"The articles have, generally, sought to address the US tax implications of such incorporations, or to question the appropriateness of the decisions by the companies in question to incorporate here, rather than to criticise Bermuda. There have, however, been certain statements or inferences within the articles that are inaccurate or misleading which warrant comment."

And he said it has been suggested that incorporating as a Bermuda company is as quick and simple as "securing a mail drop" on the Island and paying the requisite fees.

Mr Cox added: "....With the implication being that Bermuda takes a cavalier approach to incorporations. Anyone with a sound understanding of Bermuda's conservative approach to international business, based on our long-standing and recognised know your customer requirements and our focus on quality rather than quantity of business, would know that this characterisation is false."

And he pointed to the affirmation of Bermuda's position on incorporation on the Island given by by the OECD and by the KPMG review team. Both assessed financial regulation in Bermuda and the Caribbean Overseas Territories on behalf of the United Kingdom's Foreign and Commonwealth Office.

And he added that companies that intend to engage in licensable activities, such as insurance or reinsurance, undergo even more involved review processes.

He added: "It has also been stated that it is not necessary for companies that incorporate in Bermuda to have an office here. Again, this is incorrect.

"While the company need not establish an office of its own staffed with its own employees here, it must, under the terms of the Companies Act 1981, establish a registered office. This office is legally required to do much more than simply 'accept mail' as has been claimed. Among its legal requirements are to maintain a register of members of the company, which is available for inspection, to maintain the corporate minutes and to maintain books of account for the company."

And Mr. Cox went on to say that the recent coverage has made much of the fact that American companies that have incorporated here in Bermuda often keep their 'working headquarters' in the United States.

He said: "This assertion could equally be made in relation to certain states in the United States itself, where it is commonplace, for business reasons, for companies to incorporate while not establishing any presence and maintaining an operating headquarters in another state."

And he went on to defend the Bermuda insurance industry from the New York Times article which said: "Insurers have flocked to Bermuda to escape most regulations, including how much money they must hold in reserve to pay claims."

Mr. Cox said: "Bermuda certainly is a leading insurance and reinsurance centre, but it also certainly appropriately regulated.

"The regulatory approach is very much risk-based, and places considerable emphasis on ensuring solvency via significant capital requirements. In fact, the major insurance and reinsurance companies on the Island, the Class Four companies, must have a minimum capital of $100 million one of the most stringent requirements anywhere in the world."

Attention has been focused on Bermuda since many new insurance companies set up on the Island in the wake of September 11. And the announcement by Stanley Works to move its base to Bermuda has rekindled the interest.

"Bermuda has always been focused on quality over quantity and substance over style," added Mr. Conyers. "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.

Mr. Conyers said that Bermuda had a history of maintaining and implementing legislative and regulatory provisions that encourage innovation from business while maintaining the highest standards of conduct.

And he pointed to Bermuda's 'Know Your Customer' policy stating that this "philosophy" is vigorously enforced by both businesses and Government "ensuring that only legitimate, substantive business is conducted on the Island."

Mr. Conyers said: "All of those efforts are best reflected in our world-class insurance industry, which consists of small and large companies and service providers who together are offering some of the most innovative and effective insurance solutions in the world.

"The collection of intellectual and fiscal capital found in Bermuda is unmatched anywhere else. Bermuda's insurance industry has time and again delivered on its policyholder's claims and answered the world's calls with new capital, capacity and products. That is substantive business, of which we should all be proud, and media implications otherwise are flat out wrong."