The House of Assembly voted to open Bermuda's books to the world in order to put an end to negative opinions in the world press that the Island was a tax haven.

Finance Minister Paula Cox introduced the International Cooperation (Tax Information Exchange Agreements) Act 2005 in the House of Assembly on Friday by saying it was to effect information exchange with other countries through Tax Information Exchange Agreements (TIEA).

Bermuda began negotiations with Australia in May 2004, Ms Cox said, but on November 10, 2005 Bermuda signed a TIEA with Australia.

This bill is umbrella legislation to allow TIEAs to take place with other countries, she said, in order to adhere to fair tax competition principles outlined by the Organisation for Economic Cooperation and Development (OECD) which Bermuda signed up to in June 2000.

There had been some negative press in Australia about Bermuda, she said, which had been turned around by meetings with the OECD.

"I understand that both Australia and Bermuda are committed to ensure that their financial sectors are not used for money laundering or the financing of terrorism," Ms Cox quoted OECD Chairman on Fiscal Affairs Bill McCloskey. "Bermuda has already has a strong track-record in this respect."

"As a result Bermuda was not included in the OECD list of Tax Havens," Ms Cox said. "Bermuda's strategic position of constructive engagement with the OECD has been vindicated as almost every jurisdiction that did not make the commitment in 2000 and found themselves on the 2000 OECD list of Tax Havens has now given the commitment and has been removed from the list."

She said Bermuda was negotiating with the UK for a TIEA and was in diplomatic communications with Mexico.

A TIEA would benefit Bermuda's economy, she said, as it would enhance trade in financial services and improve commercial relations, she said.

"As such it is important to our national economic interest that Bermuda directly negotiates with such countries," she said.

A TIEA can only be embarked upon with express consent by the Governor acting on behalf of the UK Government, she said.

However, she said, Bermuda's letter of entrustment from the UK only grants permission to have a TIEA with OECD or European Union countries, which could have ramifications as Bermuda industry was interested in business opportunities in South America.

"The OECD has active relationships with some 70 other countries, NGO's and civil society," she said. "The OECD encourages non-OECD countries with large economies to support OECD standard of transparency and mechanisms for effective exchange of information."

Heads of the G-8 in Gleneagles this summer endorsed transparency, she said.

Bermuda's first TIEA was with the US in 1988.

However, Opposition Leader Grant Gibbons said it was a disgrace and disrespectful that the Opposition had not seen the TIEA connected to the bill.

"We have been asked to put through legislation to enable something but we haven't even seen it. This is extraordinarily disrespectful," Dr. Gibbons said.

Since the US TIEA in 1988 there had been a shift away from placing the burden of proof on foreign investigators, to Bermuda giving them the information asked for barring exceptional circumstances.

However, Ms Cox countered that anyone who asked for a copy of the agreement had been given one, however, but it would not be tabled in the House of Assembly until after Australia signed it.

The Minister said she had the discretion to decline a request for assistance if it was not in Bermuda or if it was from a period over six years prior to the tax period subject to investigation.

"The information to be requested must only relate to a taxpayer being investigated and the person served need not deliver more information than that which relates to a taxpayer," she said. "This ground is intended to limit fishing expeditions."

Countries who wanted to engage in a TIEA would make a request at the Attorney General's Chambers and the Ministry of Finance, she said.

The bill was passed in committee and was sent to the Senate.