Thank you all for coming.
In recent years, Bermuda has had to face down outside forces that threaten to dismantle the way we do business with the rest of the world.
These forces have repeatedly targeted Bermuda and other small jurisdictions, using us as scapegoats to further domestic political objectives even when the tools are available to them to change their own jurisdictional laws.
The threats have come primarily from high tax, developed countries, aided and abetted by certain members of the press that have provided the microphones and the headlines without questioning the misleading nature of these attacks.
Each time we have succeeded in turning back the threats, but such is the nature of these outside forces that they re-form and come back at us time and time again.
It takes a great deal of time and effort to fend off these threats and to re-explain Bermuda’s constructive role in the global economy.
But all it takes is one failure on our part for Bermuda to suffer serious damage on the world stage to our reputation, our integrity and our ability to conduct business.
The stakes for Bermudians could not be greater. Anything that compromises our ability to conduct business with the rest of the world will likely lead to job and income losses for thousands as well as loss of revenues that enable government to provide social services to our people in need.
The threat to Bermuda’s economy is existential, meaning that our very existence as a bustling economy supporting Bermudian life is endangered.
I say that because our economy depends on international business. If it goes down, we all go down.
The latest threat to Bermuda arrived on Friday June 9th in the form of an email to the Government from the Code of Conduct Group within the bureaucracy of the European Union in Brussels.
Bermudians should regard this Code of Conduct Group as the “EU Blacklist Group”. The email contained a questionnaire about the way Bermuda conducts its business internationally.
The deadline for our response is July 7th. If we do not answer the questionnaire we will be deemed to be “non-compliant.”
The questionnaire is designed to lead to a predetermined conclusion that Bermuda is a tax haven that is harmful to the global economy, and the EU in particular, and therefore should be placed on an economic blacklist.
This, despite the fact that the Organisation for Economic Co-operation and Development (OECD) and the Financial Action Task Force to combat money laundering (FATF) have concluded that Bermuda is not “harmful” in its conduct or in the application of its laws in the global economy.
The first attempt by the Code of Conduct Group to blacklist Bermuda in 2015 was thoroughly repudiated by the OECD and was dropped. But this latest attempt has been more cleverly constructed and poses a much greater threat.
We believe it constitutes a clear and present danger to our international business sector.
Bermuda has spent a great deal of time and money adjusting our laws, regulations and business practices to stay ahead of, or on the leading edge of, the curve as it relates to international taxation and information sharing. We have been early adopters of all the initiatives coming out of agencies that set international standards. Yet there are those out there that choose, for their own reasons, to ignore our record.
This outside threat represents a viewpoint held by certain officials in Brussels that because Bermuda does not have corporate income taxes, we are destructive to their own tax regimes.
However, this narrative is totally false. Bermuda does not hide beneficial ownership from tax, regulatory or law enforcement entities; Bermuda does not create structures designed to obscure where income is earned; Bermuda is not the jurisdiction of choice for hundreds of thousands of multinationals seeking to create shell corporations – other jurisdictions are. But scapegoating Bermuda plays well in some European countries for political reasons. It also assumes that Bermuda is weak and defenseless.
We are not. We will fight this unjust attack on the livelihoods of thousands of Bermudians employed in the financial services business or those who depend indirectly on that sector for support. We will fight to preserve our sovereign right to determine tax policy for Bermudian companies.
We will show and prove, once again, that our business model is beneficial to the world economy. Unfortunately, we will not be able to rely on support from our traditional friends in the United Kingdom as Brexit has reduced their influence in Brussels considerably.
Like a previous temporary blacklisting of Bermuda in 2013, the blacklisting of Bermuda today could entail severe economic penalties and/or restrictions on trade and the flow of funds.
The damage to our hard-earned global reputation could be sufficiently severe as to threaten the viability of our global insurance/reinsurance business.
That sector carries out very significant business in Europe, having paid out hundreds of millions of dollars in claims to EU-based policyholders over the years. This blacklist has the potential to undo all the great work to achieve Solvency II equivalency, which allows Bermuda-based insurance companies to conduct business in EU countries on an equal footing.
The Government will therefore aggressively defend Bermuda. We will do so with the support of our private sector partners and our overseas-based friends with whom we work.
We are pulling together all the resources necessary to beat back this latest threat. This includes the Association of Bermuda Insurers and Reinsurers (ABIR), the services of a London-based law firm to support our position and Bermudian experts within the Civil Service and Bermuda’s regulatory bodies.
Our first priority is to answer the questionnaire clearly and logically. If there are biases in the questions we will point them out and propose alternatives that demonstrate our role in cooperation, transparency and reporting.
With the questionnaire submitted by the deadline date, we will follow with a campaign enlisting the support of our contacts within the EU and elsewhere that we have built up in recent years.
I am confident we will prevail.
We have worked long and hard to establish our reputation as a jurisdiction with integrity and the highest standards of transparency and best practices.
We will fight to protect our reputation and the livelihoods of thousands of Bermudians who rely on that reputation for their livelihoods.