Government has postponed legislation tackling fake trusts set up to front for non-Bermudians illegally acquiring land.

The withdrawal follows fears from trust lawyers that the changes would have had unintended consequences for innocent Bermudians by requiring information far beyond that needed to tackle the problem.

The Bermuda Immigration and Protection Amendment Act 2006 bill and The Trusts of Land in Bermuda (Registration) Act 2006 were due to be debated on Friday but will now go to the House of Assembly when it returns from the Christmas recess in February.

Lawyer Alec Anderson, who is a partner and Head of Trusts at Conyers Dill and Pearman, welcomed the re-think.

He told The Royal Gazette: “I think it’s a good thing. Obviously they had representation from other people and other interested parties. They are listening.”

He said the act as drafted would have required the registration of trusts which have no connection with non-Bermudians. “It also might have required the registration of all mortgages on Bermuda land — even if no trusts were involved.

“You might have to register all confidential information relating to all financial transfers in the trusts — even if they don’t relate to land holding.”

He said trusts were sometimes made up of shareholdings, cash and other elements which would have to be disclosed to the Government’s Registrar General under the original drafting.

“Everyone supports the goal the act is trying to achieve. We all applaud the purpose of trying to stamp out abuse of trusts for the benefit of non-Bermudians.”

A statement from Government last night said the bills will tackle ‘fronting’, whereby Bermuda entities acquire and/or hold land for the benefit of non-Bermudians who otherwise are not entitled to the land.

Government said the bills will help preserve the majority of the housing stock and undeveloped residential land in Bermuda for Bermudian ownership.

The statement said the focus of the Trust of Land in Bermuda (Registration) Bill 2006 is to provide for the registration of all land in Bermuda that is held by trustees — which breaks new ground in trust law.

It also concentrates on the activities of restricted persons in relation to such land and places on the trustees the responsibility for proving the required information.

Government pledged all such information will be kept in secret by the Registrar General and only the Chief Immigration Officer and the Director of Public Prosecutions will have sight of that information — the former for the purpose of investigating potential abuses and the latter in the event an offence is to be prosecuted.

Government hopes the new legislation will significantly reduce the use of land trusts to circumvent the law.

The statement said: “The operational mechanics of the land trust Bill in particular have raised queries from relevant practitioners and service providers.

“The Government recognises the value of addressing these queries before the Bills’ debate in the House of Assembly.

“Given that this is ground-breaking legislation and there is no urgent requirement it be debated before the Christmas break, the second reading will now take place during the New Year.”

Labour and Immigration Minister Derrick Burgess will host meetings with stakeholders and others in January.

The statement added: “While operational and all other aspects of the Bills will be addressed, there should be no expectation that the Government will waver on the substantive policy that underpins the new legislation — that is, the preservation of Bermuda’s land bank for future generations of Bermudians.”

Minister Burgess has already had letters on the subject and the deadline for more submissions is January 8.

The statement added: “The Government welcomes this opportunity to meet with stakeholders and looks forward to the January meetings when these two extremely important pieces of legislation will be discussed.”

Trust change bill delayed in House