US lawmakers realise that moves aimed at clamping down on offshore financial centres could backfire by hitting American consumers in the pocket.

That was the impression gained by Deputy Premier and Finance Minister Paula Cox from bilateral talks with US lawmakers in Washington this week.

Minister Cox was part of the Bermuda delegation, which included Premier Ewart Brown, who met a string of lawmakers, including members of the House Committee on Ways and Means that is responsible for tax policy.

"While the work continues and is far from over, the clear signals received are that Bermuda has friends," Ms Cox said yesterday.

Proposed legislation that would increase taxes for Bermuda insurance groups with US subsidiaries - encapsulated in the Neal bill - was one topic of conversation.

The delegation was helped in putting its side of the argument by an economic analysis from the Brattle Group which concluded that the proposed change would increase Americans consumers' tax bill by $10 billion to $12 billion per year.

President Barack Obama's plans to reap more taxes from US companies with subsidiaries overseas could also end up costing US consumers more.

"There is an appreciation that this issue is a 'pocketbook' issue for American consumers," Ms Cox said.

"Reports indicate the awareness that US multinational companies strengthen the American economy by a combination of their domestic activity and their international engagement. Also there is the acknowledgement in the school of realpolitik that if you start to restrict foreign companies from doing business, it drives up the price of doing business and limits the efficiency of capital markets.

"So our work continues but we have some good allies and we have to continue to tell the Bermuda story."

Ms Cox said the Finance Ministry's Treaty Unit was continuing to work on tax information exchange agreements (TIEAs).

Shadow Finance Minister Bob Richards said the Bermuda delegation went to Washington "under a cloud" because of the failure to have enough TIEAs signed in time to avoid being on the "tax havens" list of the Organisation for Economic Cooperation and Development.

See Op-ed, Page 4