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Richards: Offshore centres ‘scapegoats’ for big countries’ policy failures

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Bermuda and other Overseas Territories are being used as the scapegoats for policy failures of larger countries, but more must be done to educate Europe about the Island's business model.

So said Finance Minister Bob Richards and Premier Craig Cannonier as they updated the media yesterday on their meetings with British Prime Minister David Cameron.

Mr Cannonier stressed that no agreements were signed in London and his Government will not do anything to jeopardise Bermuda's financial model or previous agreements the Island has signed.

Mr Richards said there was a “groundswell” of opinion against offshore financial centres in London driven by a number of factors.

“First of all the US is coming out of a recession, Europe and the UK are not. Unemployment remains very high in the UK. Budget deficits are ballooning So it's a very difficult and negative environment over there.”

He said the Overseas Territories and Crown Dependencies were “to some extent being used as scapegoats and distractions for domestic policy failures.”

In addition, there was a “corps of non-Governmental organisations” who had “latched on to this notion that either multinational organisations or so-called tax havens are responsible for these poor countries not having any money.

“I was very surprised at the virulence of that sentiment that exists over there right now. Our message is to a significant extent being overwhelmed by that noise.

“Therefore we have to up our game.”

Mr Richards said that Bermuda had been more successful with its public relations in the US than in the UK.

“We just kind of assumed that because we have this relationship with Britain and we have these representatives in our midst at all times at a most senior level that somehow there's an understanding over there of what Bermuda is all about.

“And I was surprised and dismayed to find out that that was not true. They don't understand what Bermuda is all about. They continue to lump us in with other jurisdictions that are engaged in offshore banking that have secrecy laws, that are engaged in money laundering. These are things that Bermuda is not involved in.”

The Bermuda delegation had stressed to Mr Cameron that Bermuda and the other OTs had not been given a “fair opportunity” to examine the multilateral agreement that he wanted signed.

“It is important that you understand that Bermuda has not signed any agreement,” the Premier said.

“We need to be responsible, and in being responsible we must look at every 'T' and make sure that it is crossed and every 'I' to make sure it is dotted. Because we do not want to put in jeopardy the financial model we have in Bermuda.”

The Premier said Bermuda had no problem with sharing tax information and providing information about beneficial ownership of companies domiciled here, and had been doing so for many years.

“When it comes to the highest regulations, Bermuda has always been [among] the forerunners,” the Premier said.

But Mr Cannonier stressed that Bermuda's model was not banking, but insurance. “It is the businesses that are domiciled here that pay out in billions of dollars to ensure that many of the places like the UK and the United States can get back up running again and can create jobs and sustain jobs and put them back in the positions they were in before these things (catastrophes) happen.”

He said: “There is a great misunderstanding about what it is that we do. So we will continue to ensure that we get the message out there.”

No other territories had signed the multilateral agreement, he said.

Asked if the UK Government accepted Bermuda's request for more time, he said: “They have to.”

But the Premier stressed that a signing ceremony had never been on the agenda.

“Sovereign nations like the United States and Canada are still coming to terms with this global agreement, so it's going to be a while before we all come to a consensus as to exactly the direction we want to go in. They also are looking at this very closely and they are being responsible as well.

“So as we move toward tightening up the net of illegal activity I'm sure that some agreements will be found, but right now we are not at that position.”

Asked about the efforts of companies like Google to avoid paying millions of dollars in taxes using vehicles domiciled here and in other countries, Mr Cannonier said Ireland's double tax treaty was a key factor in enabling Google's tax avoidance.

“Bermuda is down the chain. So if you want to avoid this thing happening, the UK, the G8 nations really need to go to Ireland and the likes and address them first.”

Mr Cannonier added that misrepresentation of Bermuda in UK media stories will end with better public relations.

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Published June 19, 2013 at 9:00 am (Updated June 18, 2013 at 11:56 pm)

Richards: Offshore centres ‘scapegoats’ for big countries’ policy failures

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