Bermuda’s Premier and Minister of Finance David Burt says his country has nothing to hide. (Photo credit: The Royal Gazette)
HAMILTON, Bermuda, Thursday November 9, 2017 – At least three Caribbean countries mentioned in the recent Paradise Papers leak are seeking to defend their reputations, insisting that they have done nothing wrong.
The Paradise Papers, a leak of 13.4 million files, reveal the hidden wealth of some of the world’s leading corporations and well-known individuals. The material comes from two offshore service providers and the company registries of 19 jurisdictions described as tax havens, including Antigua and Barbuda, Aruba, the Bahamas, Barbados, Bermuda, the Cayman Islands, Dominica, Grenada, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, and Trinidad and Tobago.
But Bermuda’s Premier and Minister of Finance David Burt has insisted that his territory is an open, transparent jurisdiction with a vigorous regulatory framework.
“We will be aggressive in defending our reputation as we have nothing to hide,” he said. “Bermuda is not a place to hide money, in fact you cannot hide money or avoid tax in Bermuda as tax authorities receive that information automatically. Bermuda is committed to transparency, cooperation and compliance. We will not tolerate any who fall below our globally leading standards.”
To press home his point, Burt noted that more than 100 tax-transparency treaty partners can request and receive information from Bermuda; the British overseas territory was one of the early countries to join the Base Erosion Profit Shifting (BEPS) OECD group through which multinationals in Bermuda must report their income; and Bermuda automatically shares information via the Common Reporting Standard with tax authorities in 34 countries, including the United States, United Kingdom, France and Germany.
“Whenever we receive evidence of wrong-doing we have the means and teeth to force compliance based on our legislation coupled, with strong law enforcement and regulatory cooperation. In the past, we have taken decisive action again individuals or corporation who are non-compliant. We will continue to do so,” he added.
In response to what it called sensational reports exploiting an illegal data hack, Cayman Finance – the agency tasked with protecting, promoting, developing and growing the Cayman Islands financial services industry – dismissed the tax haven label.
“Cayman is a transparent, tax neutral jurisdiction and not a tax haven. Our legal, regulatory and legislative regimes clearly show we meet none of the definitions of a tax haven used by the OECD or leading transparency organizations. In addition, Cayman maintains a globally responsible tax regime that enables the free flow of trade, services, capital and financing around the world, and does so with transparent stated and actual applied tax rates, cooperation and without engaging in unfair tax practices,” Jude Scott, CEO of Cayman Finance, said in a statement.
“Cayman has signed agreements which allow tax information exchange with more than 90 countries, automatically shares tax data as part of the European Union Savings Directive, US FATCA [Foreign Account Tax Compliance Act] and the Common Reporting Standard and has signed onto the country-by-country reporting principles under the BEPS process,” he added.
CEO of Cayman Finance, Jude Scott
Among the files released in the Paradise Papers are documents showing that millions of pounds from the Queen’s private estate have been invested in a Cayman Islands fund as part of an offshore portfolio that has never before been disclosed. The records show that as of 2007, the queen’s private estate invested in the Cayman Islands fund that in turn invested in a private equity company that controlled UK rent-to-own firm BrightHouse, which was criticized for selling household goods to cash-strapped Britons on payment plans with interest rates as high as 99.9 percent.
Scott insisted, however, defended the monarchy.
“Like other international financial centres, the Cayman Islands has had to get used to unfair and inaccurate reporting about our role in the global financial marketplace. However, we will not tolerate unfair attacks against our Queen, Elizabeth II, who maintains normal and legal investments in Cayman, a British Overseas Territory, a compliant and transparent jurisdiction that is part of her dominion,” he said.
“From investors like Her Majesty to pensioners and university students, a very wide range of people benefit from investments in Cayman. Individuals as well as institutions such as government and state pension plans, regular pension funds and university endowments invest together in Cayman funds to access investment opportunities from around the world in a neutral location. We are home to funds advised by some of the most talented investment professionals in the world who help those investors increase their returns, which benefit retirees, students, communities and businesses – and on which they pay all relevant taxes in their own jurisdictions.”
Barbados has also stoutly defended its reputation, with Minister of International Business and Commerce Donville Inniss saying it was an “insult to common sense” to put Barbados in the tax haven category.
Barbados’ Minister of International Business and Commerce Donville Inniss
“Nothing really surprises me because there is a group of individuals and entities around the world that seem to exist solely to spread a lot of rumours and to cause a lot of confusion. I don’t deny that there are jurisdictions that may facilitate tax evasion and some illicit activities, but Barbados, I must stress over and over again, is not that kind of domicile,” he told online newspaper Barbados Today.
“We have never been a country that could justifiably earn the reputation of being a tax haven….It does not mean that we would not find a few who would do things in our domicile that are not welcomed but to suggest that Barbados is a tax haven makes no sense.”