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Bermuda removed from EU blacklist

European Union finance ministers removed Bermuda from a blacklist of noncooperative tax jurisdictions yesterday.

Representatives of the 28 EU countries struck Bermuda from Annex I of the EU list — the “blacklist” — and put the island in Annex II of the EU list, the “greylist”, at a meeting of the Economic and Financial Affairs Council in Brussels.

Curtis Dickinson, the Minister of Finance, said: “I am pleased with the rapid conclusion of the Ecofin delisting Bermuda at its very first meeting after March 12.

“This is by no means the end of the work required to continue strengthening the framework in this area.

“Bermuda continues to be a leader in insurance and other financial services and so that comes with a responsibility to be ahead of the curve in terms of regulation and best practice.”

He added in a ministerial statement at the House of Assembly: “The Premier and I, on behalf of the people of Bermuda, wish to thank the members of Ecofin, as well as the EU officials that we met during those critical end of March, early April meetings, for their work in progressing Bermuda's removal from the list at the earliest opportunity.

“We will build on our experiences to date and appropriately take the required steps to ensure that Bermuda remains a jurisdiction of choice for quality and compliant business that positively contributes to the economic and social development of Bermuda.”

The greylist is reserved for jurisdictions that have “tax regimes that facilitate offshore structures that generate profits without real economic activity”, but which have undertaken sufficient commitments to reform their tax policies.

Bermuda is on the greylist because of EU concerns about the island's legislative framework for collective investments funds.

The island has committed to address those concerns by the end of the year.

Bermuda was added to the blacklist of noncooperative jurisdictions for tax matters at a meeting of the EU ministers on March 12.

The move came after what David Burt, the Premier, said was a “drafting error” in the economic substance regulations submitted to the EU.

The international business community welcomed the move to the greylist.

Stephen Weinstein, deputy chairman of the Bermuda Business Development Agency, said: “We're thankful for the efforts of our Premier and finance minister to engage with the EU and provide transparency into Bermuda's world-class regime.”

Craig Bridgewater, chairman of the Alternative Investment Management Association network in Bermuda, said: “Bermuda has always sought to adhere to the highest standards of tax transparency and other global regulatory standards and sees this quality as a key aspect of the manner in which it conducts business presently and into the future.”

But Nick Kempe, a senator and the shadow finance minister, added: “Bermuda has consistently demonstrated its commitment to combating money laundering and terrorist financing, therefore it was regrettable that a “minor technical omission” led to a major fail.

He added that “despite being removed from the blacklist, we will remain on a greylist for issues relating to collective investment funds”.

The Ministry of Finance said more than ten EU countries export about $6 billion in goods and services and annual two-way trade is normally $30 billion.

Bermuda and Europe partner primarily in reinsurance and finance.

Barbados was also moved from the blacklist to the greylist and Aruba was removed from both annexes.

A total of 12 jurisdictions remain on the list of noncooperative jurisdictions: American Samoa, Belize, Dominica, Fiji, Guam, the Marshall Islands, Oman, Samoa, Trinidad & Tobago, the United Arab Emirates, the US Virgin Islands and Vanuatu.

To view Curtis Dickinson's ministerial statement and the report by the EU Code of Conduct Group, click on the PDF links under “Related Media”

Finance minister Curtis Dickinson (File photograph by Blaire Simmons)

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Published May 18, 2019 at 9:00 am (Updated May 18, 2019 at 9:01 am)

Bermuda removed from EU blacklist

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