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Experts advise Government on financial risks

The Financial Policy Council has advised the Bermuda Government to take a proactive approach in dealing with risks to the island's economy emanating from the “Paradise Papers”.

Bermuda Monetary Authority, the financial regulator, hosted the sixth meeting of the FPC at its offices in November and some details of what was discussed were released today.

The “Paradise Papers” refers to a slew of international media reports last year based on millions of documents stolen from law firm Appleby.

“FPC noted that Bermuda enjoys a longstanding history as a trusted jurisdiction, with the highest regulatory standards,” a government statement said. “Council members urged the Government and BMA to continue to pursue proactive international engagement efforts with governmental and financial authorities aimed at promptly addressing risks emerging from the event.”

The main purpose of the FPC, which was established in 2015, is to assess possible threats to Bermuda's financial stability, and to identify policies and actions to address them.

Members of the FPC include chairman David Burt, the Premier and Minister of Finance, deputy chairman Sir Andrew Large, BMA chief executive officer Jeremy Cox, Sir Courtney Blackman, Michael Butt, Dame Amelia Fawcett and Gil Tucker.

The FPC also reviewed work under way by the National Anti-Money Laundering Committee towards strengthening Bermuda's anti-money laundering and counter-terrorist financing framework in advance of the Caribbean Financial Action Task Force mutual evaluation of the island's regime.

Council members stressed the critical importance of a sound anti-money laundering and counter-terrorist financing framework to Bermuda's economic viability and welcomed the formation of a Cabinet committee tasked, among other things, with monitoring progress in this area.

Finally, members urged all relevant authorities to continue to attach priority and to assign adequate resources to ensuring its timely implementation so as to lead to a favourable assessment.

Council members also discussed the European Union's initiative to develop a common system for listing of non-co-operative jurisdictions or “blacklist” and stressed the importance of staying off it. The EU published its blacklist in December, after the FPC meeting, and Bermuda was not on it.

The statement added: “Bermuda recognises the importance attached by the EU to clamping down on tax evasion and avoidance, and promoting fairer taxation. “Bermuda believes that its regulatory and tax environment meets most of the expectations sought by the EU. Moreover, Bermuda has been an active participant in the OECD's Tax Information Exchange Agreement and will continue to actively engage with the EU in order to reach mutual understanding on EU demands and on the most appropriate way of addressing these.”

The FPC reviewed the impact on the Bermuda reinsurance industry of the recent active catastrophe season. Overall, while the unique frequency and severity of events was likely to affect the reinsurance sector's profitability for 2017, it did not raise any concerns regarding the sector's solvency.

Other topics discussed included Government's plans to improve its fiscal situation and recent developments in shadow banking, especially the work under way at the Financial Stability Board.

The meeting was the last one to be attended by Sir Courtney Blackman, whose term has ended. The Premier thanked Sir Courtney for his contribution to the work in FPC during its important start-up phase.

The FPC's next meeting is scheduled for early this year.

Learned adviser: Dame Amelia Fawcett, one of the members of the Financial Policy Council

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Published January 04, 2018 at 1:11 pm (Updated January 04, 2018 at 10:47 pm)

Experts advise Government on financial risks

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