Will Bermuda stand alone against UK tax measures?

Bermuda will not look isolated because it has declined to sign up to a tax treaty in London this weekend, Premier Craig Cannonier said last night.

Mr Cannonier was speaking after the leaders of rival offshore UK territories said they would sign — as requested by UK Prime Minister David Cameron — in advance of a G8 summit of the world’s most powerful nations at the weekend.

Cayman, Gibraltar, Jersey, Guernsey and the Isle of Man have all declared they would sign the Organisation for Economic Cooperation and Development/European Union convention on tax information exchange — while Mr Cannonier has said the island would not sign until its concerns over the fine print had been dealt with.

But he said Bermuda would not look like a hold-out — or appear to have something to hide.

Mr Cannonier added: “I don’t believe that at all. 

“This is a document that has to be well-vetted and the Finance Minister has been going through it.

“There are references in it we are concerned about. Cayman comes from a different financial model from Bermuda — we also need to emphasise first and foremost Bermuda has signed more tax information exchange agreements than almost any other country.

“We do know that our friends in Cayman have had some challenges. They have more cause to sign up because they want to be seen to be as transparent as possible.

“They all know... that Bermuda stands above all of them.”

But Mr Cannonier said: “We not just going to sign something just to sign it… our team has been very diligent here.”

And he added: “In principle, we acknowledge the idea and what it brings to the table, but we need to look at some of the details in this.”

Mr Cannonier declined to elaborate on the specific points of concern that Bermuda wanted to discuss. Mr Cannonier was backed by economist Peter Everson, who also sits on the Chamber of Commerce economics committee and serves with the Association of Bermuda International Companies.

But Mr Everson, who stressed he was speaking in a private capacity, added: “The media in the UK can grab a headline and run with it — we can’t control that.

“The Premier, however, has said we want to look at the details and consider a few points. It begs the question as to what the outcome of that might be.

“If Bermuda decided it was not in the island’s interests to sign up, that would be a different area altogether. But if Bermuda wants to take extra weeks or months to look at this, that’s just good government.”

But he added: “If we said we don’t like the look of that and said we’re not signing, that would have negative connotations.”

Mr Everson said that all the Overseas Territories and Crown Dependencies had different financial sectors.

He added: “Here, insurance and reinsurance is far larger, while banking is very big in Jersey, Guernsey and other islands.” 

“The mere fact Bermuda wants to take time to have a read of this, that’s fine.” n

Mr Everson said that public outrage in the recession-hit UK over tax avoidance measures taken by major companies could be driving the UK’s approach.

He explained: “When a politician is under pressure from his own voters, it’s easier to look strong in dealing with overseas because they don’t vote for you.

“But the problems all emanate from the tax loopholes created in the UK and US and other countries. The problem is not with Bermuda or Jersey or Guernsey.”