Finance Minister On Economic Substance Act

December 21, 2018

Curtis Dickinson Bermuda December 2018[Written by Minister of Finance Curtis Dickinson]

On Monday, December 17, the House of Assembly united to pass the Economic Substance Act 2018.

This saw all 36 Parliamentarians united in defence of and support of our Financial Services Industry, and consequently the livelihood of our country. The people of Bermuda can be proud of their government in the collective form for uniting towards the common goal of protecting our industry.

It is unfortunate however, that time after time, we are finding ourselves having to jump through hoop after hoop to continue to satisfy outside watchdog groups and oversight organizations.

It is reassuring that the EU substance regime will soon become a global standard upon the OECD taking over the administration of the substance regime. Bermuda has a long history of adhering to global standards.

The necessity of the Economic Substance Act was to satisfy requirements from the European Union that companies registered in Bermuda must maintain a physical presence, employees and revenue generating activities.

Bermuda does in fact have a large presence of these companies, but we do also receive revenues and support corporate activity from companies without an actual presence. The new regulations from the EU seek to end this practice. This could, in fact harm our country and economic activity in a very meaningful way.

Passing this legislation was necessary, however, as had we not, we would have been blacklisted, and that would cause harm in an even more immediate way, as current financial activity from legitimate and fully compliant financial organizations could be compromised.

Minister Dickinson speaks about the Act in the House on December 17

Hence, the collective government of Bermuda did what we had to do to preserve our economy. The public must be aware that between this current issue, and the issue of beneficial ownership, that the EU and UK watchdogs are vigilant.

Despite our best efforts over the past 20 years of continually satisfying the demands, the goalposts continue to be moved to require more and more. But as Bermudians we will continue to work hard, continue to ensure we thrive, and we will continue to ensure that our financial services industry will grow. We will survive this threat.

On some issues, there is no room for partisanship. I am pleased that on December 19, the Economic Substance Act passed unanimously in the Senate.

This is one such issue that we stand united on.

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Comments (12)

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  1. Minister of Finance..soooo happy that you are on board. Your cleverness intelligence and charsima surpasses Bob Richards. He was cold, unfeeling for his own people, disrespectful to Chris Famous before the 2017 election. He is exactly where he belongs… RETIRED!!!

    • And BAM there it is says:

      Someone having to make it political in any event.

      We are doomed by people like this thinking and saying the same old drivel time and time again.

      Blessings abound.

    • 2 Bermudas says:

      This guy has accomplished absolutely nothing in his short political carreer and you’re already putting him above Bob Richards?! You are a joke. Titty milk definitely gone to ya head!! Ha ha ha!!

    • wahoo says:

      What are you running on about?

  2. DeOnion says:

    Contrast this to the caymans where they are publivly at least, incredibly upbeat saying it will be a boon to the economy.
    This is 1. Extremely gloomy and 2. Contains not even the hint of a plan

  3. Paz says:

    This Finance Minister is striking in his naïveté. Bob Richards was, in my opinion, one of the best Finance Ministers this country ever had. To say he was cold and unfeeling is the attitude of those who don’t understand that different people have different personalities and different ways of communicating. It does not mean they are unfeeling or uncaring. That position is shamefully simplistic and any adult should know better.

    The Finance Minister is striking in his naïveté. This is not a time for cheerleading on how well the government is doing to protect the interest of the people or how we are being bullied. The initial economic substance bill was obviously woefully inadequate. This one isn’t much better. A much better approach is to recognize that the hundreds of millions of people in the world that have lost their tax base to an island in the Atlantic have a valid point. Then propose comprehensive legislation that solves the problem by adhering to the new rules and encourages immigration and foreigners to come to the island – in droves if possible – and helps current expats to stay on the island. Michael Fahey was, of course, right in his end game. He just didn’t recognize the time and effort required to get people on board. But they will come on board. The country depends upon it.

    • Bermudian says:

      Why do we need droves of foreigners?
      We have no jobs for bermudians. Will we offer financial assistance?

      • Paz says:

        Two thirds of economics is demographics and population. Bermuda’s demographics are terrible such that the tax base is eroding and is supporting more people. Combine this with the bloated civil service (really a government wealth redistribution mechanism that I appreciate but puts an additional burden on the eonocmy) and Government’s past financial mismanagement leading to high debt levels, and you have a very serious financial concern.

        We need increased population. Unquestionably. Otherwise our standard of living has declined over the past 5 years and will continue to do so.

        Foreigners are the most likely pool although they will be hard to attract. Foreigners with money, working on the island and incented to create jobs. Foreigners that actually reside here and spend money and do charitable works and support the country like most expats do. No financial assistance would be required. They would be allowed to work here doing international business or providing services to Bermuda that are not available on the island. They would not get jobs that Bermudians are qualified for (Aside: There are lots of service jobs available to Bermudians right now, so close to full employment is already possible)

        I know this will not be easy for the country and there are details to consider. But we need to increase the population – in the right way.

  4. Mike says:

    “The people of Bermuda can be proud of their government………”

    Why? You did what had to be done. That’s it. No more – no less.

  5. simple says:

    sorry to tell bob turned our economy around he hasnt yet! results matter and the plp have a problem with that

  6. Question says:

    There was no choice but to pass the act. Why is he trying to take credit for it?