Bermuda Removed From EU Tax Blacklist

May 17, 2019 | 14 Comments

[Updated] Bermuda has been removed from the ‘EU list of non-cooperative tax jurisdictions,’ the Council of the European Union has officially confirmed today [May 17].

The statement said, “The Council today decided to remove Aruba, Barbados and Bermuda from the EU list of non-cooperative tax jurisdictions.

“The EU list is contributing to on-going efforts to prevent tax avoidance and promote good governance principles such as tax transparency, fair taxation or international standards against tax base erosion and profit shifting.

“The list was established in December 2017 and is contained in annex I of the conclusions adopted by the Council. It was revised in March 2019, following an in-depth review of the implementation of the commitments taken by third country jurisdictions that are part of the process.

“Barbados has made commitments at a high political level to remedy EU concerns regarding the replacement of its harmful preferential regimes by a measure of similar effect, whilst Aruba and Bermuda have now implemented their commitments.

“At the same time, Bermuda remains committed to address EU concerns in the area of collective investment funds. As a consequence, Barbados and Bermuda will be moved from annex I of the conclusions to annex II, which includes jurisdictions that have undertaken sufficient commitments to reform their tax policies, while Aruba will be removed entirely from both Annexes.

“As a result, 12 jurisdictions remain on the list of non-cooperative jurisdictions: American Samoa, Belize, Dominica, Fiji, Guam, Marshall Islands, Oman, Samoa, Trinidad and Tobago, United Arab Emirates, US Virgin Islands and Vanuatu.

“The work on the EU list of non-cooperative jurisdictions is a dynamic process. The Council will continue to regularly review and update the list in 2019, whilst it has requested a more stable process as from 2020 [two updates per year].”

Update 9.55am: Minister of Finance Curtis L. Dickinson said, “I am pleased with the rapid conclusion of the ECOFIN delisting Bermuda at its very first meeting after March 12, 2019”.

The Ministry noted, “Bermuda will now be placed in Annex II of the EU list, on the so-called ‘grey list’ owing to the fact that the EU Council had determined that further work was required in relation to collective investment funds.”

The Minister continued, “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.”

“In the last several weeks, business confidence has remained high and there have been public demonstrations of that confidence with new entrants to the marketplace and the recent S&P Ratings affirm the sound economic direction of the country.”

The Ministry added, “Bermuda’s economic ties with the EU are strong. More than 10 European Union 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.

“The Premier and Minister of Finance’s political level engagement along the process strengthened Bermuda’s close and productive relationship with the EU and this engagement will continue.”

Update 12.31pm: Minister of Finance Curtis Dickinson’s statement in Parliament today:

Mr. Speaker, I addressed this Honourable House at its sitting last week to provide additional background information regarding the actions which Bermuda had taken to address issues related to the EU “Blacklist”.

This included the political level engagement in Europe undertaken by the Premier and I, toward being removed from the list, as adopted by the EU Finance Ministers [“ECOFIN”] at their March 12th meeting.

Mr. Speaker, I am now pleased to report to the members of this Honourable House and the people of Bermuda, that following its meeting in Brussels today, the ECOFIN made a public statement announcing that it has removed Bermuda from the Annex 1 list of non-cooperative jurisdictions in relation to tax matters

Mr. Speaker, on March 28th, Premier David Burt and I, along with senior Bermudian officials, met with Commissioner Pierre Moscovici, responsible for economic and financial affairs as well as taxation and customs. Thereafter, on April 1, I, as well as members of the Bermuda team, met with Mrs. Lyudmila Petkova, Chair of the Code of Conduct Group on Business Taxation. These meetings, together with visits to the German and French Ministries of Finance, were open, constructive and cooperative and we believe played an important role in achieving today’s positive outcome.

Mr. Speaker, 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 March/early April meetings for their work in progressing Bermuda’s removal from the list at the earliest opportunity. We would further note that we certainly intend to continue our engagement with these and other key persons in the EU and to address a wide range of relevant matters that are important to Bermuda’s national interest.

Mr. Speaker, consistent with my remarks to the Honourable Members and the people of Bermuda last week, Bermuda has now been placed on the “grey” list, meaning being placed in Annex II of the EU list. This reflects the need to further expand our legislative framework in this area, to include the EU’s economic substance requirements for collective investment funds [CIVs].

Mr. Speaker, the Bermuda Monetary Authority CIVs experts have already engaged in several discussions with the EU Commission on these matters. They will continue to cooperate with the EU with respect to the adoption, by the end of this year, of an economic substance framework for CIVs that is acceptable to the EU.

Mr. Speaker, I must reiterate, how extremely pleased and thankful I am that Bermuda has been removed from the EU’s list of non-cooperative tax jurisdictions.

Mr. Speaker, the support from the people of Bermuda and other stakeholders has been a positive force during this difficult period. I would note that teams within the Ministry of Finance, the Bermuda Monetary Authority, as well as private sector partners have worked extremely hard, on an ongoing basis, to address the various issues related to all of these economic substance requirements. Today’s announcement from Brussels is a tribute to the dedication that those men and women have brought to this initiative. We must also recognize the advice and support from the UK government during this extended process. I therefore wish to express my sincere thanks to all persons involved in this work, to other stakeholders who provided assistance, and to the people of Bermuda for their support in these matters.

Mr. Speaker, Bermuda has done considerable work to become a well-regulated and respected jurisdiction. Our reputation and commitment in that regard kept our industry partners and other influential persons ‘in our corner’ through this challenging process. We were heartened by the recent S&P Ratings affirming the sound economic direction of the country. I would also note that in the last several weeks, including at the April RIMS conference, business confidence has remained high and there have been public demonstrations of that confidence with significant new entrants to the marketplace. I would further highlight that earlier this week I attended the latest Consensys Conference in New York and witnessed continued interest and support for doing business in Bermuda.

Mr. Speaker, in closing I would note that I recognize that the positive decision by the EU today is by no means the end of the work required to continue addressing and strengthening the framework in this area. 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.

Thank you, Mr. Speaker

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Comments (14)

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  1. Richard A says:

    PLP please be more careful next time. This is our future you are playing with.

    • Portia says:

      It was a drafting error by a civil servant, not a PLP minister. If the OBA were the government the same thing would have happened, MPs and the Finance Minister do not prepare the documents and are not involved in the drafting, that’s the CS job.

      • question says:

        You’re leaving out the full story. The government mismanaged the process and it ultimately got Bermuda into a major mess. Burt refused to meet with officials in London prior to the end of 2018, which could have caught the problem. It was a failure of leadership.

        • Portia says:

          The meeting in London that Premier Burt did not attend had NOTHING to do with the EU blacklist, it was on other matters pertaining to Bermuda’s relationship with the UK (i.e. voting). And there is no evidence at all that government “mismanaged the process” when in fact Bermuda has worked extremely closely with the EU for many many months to meet their requirements and amended our own legislation more than once to ensure that it met EU standards.

          • question says:

            If the government had managed the process properly clearly we would not be on the list.

            They want to take no responsibility when things go wrong, but they want credit on the odd occasion when things go right.

  2. No Reason for Celebration says:

    This is not a media self congratulatory talking point development for the Bermuda Gvt–we should have never been on the list in the first place.

    And while our other competing jurisdictions such as the Channel Islands are in better position than we are, we should be humble and silent.

  3. gustav says:

    now the PLP will celebrate it as their success

    • Portia says:

      The fact that Minister Dickinson and Premier Burt took responsibility for a CS drafting error (not their error) and then rallied hard for Bermuda and met with the EU ministers to successfully get Bermuda off the list is definitely cause for celebration and they deserve to be commended.

      • question says:

        The PLP’s incompetence caused a major problem and now they want us to congratulate them for sorting out their own mess.

      • Anbu says:

        Um no. Typical plp lacky response. Throw someone under a bus. “Not my fault”. No surprise here. Zero props for correcting their own error. Shouldnt have happened in the first place. But we know, plp loves to pat themselves on the back for absolutely nothing. And by the way, they should have taken responsibility for it. That goes without saying. Its his ministry

      • LaV says:

        “The fact that Minister Dickinson and Premier Burt took responsibility…”

        Adults should always take responsibility for their failures. These guys failed, miserably…and….blamed the civil service.

  4. Humphrey says:

    plp supporter’s they can feed them anything smh,.Lookout the Kool aid is coming!!

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