Heading off potential trouble for Bermuda’s booming international business sector is the mission of Finance Minister Paula Cox as she meets with two powerful US Congressmen this week.

She is in Washington, DC for top level talks with members of America’s “tax-writing committee” to explain the mechanics of Bermuda’s economy and the beneficial mutual arrangements that have flourished over the years.

The mid-term elections have handed control of the Congress and US Senate to the Democrats, opening up the potential for new tax rules to be introduced that might harm offshore business centres like Bermuda by cutting into the benefits currently enjoyed by “US-centric” insurance, reinsurance and investment companies.

The Democrats have traditionally been the least supportive of regulations that allow US companies, or those who primarily serve the US market, from escaping federal tax requirements by being based offshore.

When the Democrats assume control of the Congress and Senate in the new year there are indications that lobbyists will seek to get politicians to change the rules. A grassroots Democrat activist from Hawaii John Lundin has already spoken at length to the Royal Gazette <$>to say that is his intention, and he is seeking to make it a platform issue in the 2008 Presidential race.

“The threat of legislation to end what are perceived to be an expatriation of profits to so called ‘low tax’ jurisdictions by US corporations is being taken seriously by the Government,” said Ms Cox.

The Deputy Premier is in the US capital to hold talks with New York Congressman Charles Rangel and Georgia Congressman John Lewis. Both are sitting members of the powerful House Ways and Means Committee. As from January Mr. Rangel will be chairman of that committee.

Ms Cox is on a two-day visit to speak to the US politicians, which concludes today. In a statement she said it was a “well established fact that Bermuda’s tax system is consumption based, and always has been; that is, it was not designed or modified to attract business from overseas, but rather to be effective yet administratively different for our small island.”

She is being accompanied in Washington by Financial Secretary Donald Scott.