Column: Paradise Papers, The Rest Of The Story

November 19, 2017

[Opinion column written by Ross Webber]

Amid the hype of this month’s “Paradise Papers,” some key ingredients have gone missing—the rest of the story.

The insidious campaign, waged by the International Consortium of Journalists [ICIJ] using data from an illegal hack of Appleby, is well-choreographed and evidently well-funded. Proponents of a free press will be disappointed to see how that privilege has been abused.

Large media organisations have dedicated significant airtime and column inches to flawed economics and a wholesale denigration of international financial centres, including Bermuda.

Media seem to be fixated on the theme of “secrecy.” How ironic, then, that a local media relied on an anonymous source for a banner story, and the only secrecy revealed by the BBC’s Panorama programme was its reporter whispering his way down Victoria Street at twilight and describing clandestine ICIJ meetings in Europe.

Largely overlooked, as well, is the question of criminality. Campaigners have mislabelled this a “leak.” It wasn’t. It was an illegal hack of confidential records—a global theft.

Sensationalist stories deliberately play to a public that rarely takes the time to look further. If you throw sufficient mud, then hit repeat, some of it inevitably sticks. To that end, this campaign conflates tax evasion, tax avoidance and efficient tax-planning. It confuses the law, ethics and morality. And, most deliberately, it muddles secrecy, privacy and confidentiality.

Lost in translation along the way are many facts. Including this one: among the main instigators, the Guardian Media Group [GMG] has its own connections to offshore investment structures and hedge funds, according to The Spectator, while the Daily Express reports the UK Labour Party rents its HQ via a property fund based in Jersey. There’s nothing illegal about either; aside from the inherent hypocrisy, it simply demonstrates how common and beneficial offshore investments can be.

However, the esoteric intricacies of international finance are far trickier to explain in layman’s terms than crowd-pleasing attacks on global corporations, wealthy individuals, or small island nations. And why let the facts get in the way of a good story?

Here’s what the media is missing, by mistake or on purpose:

  • OECD Country-by-Country [CbC] and Common Reporting Standard [CRS] systems. These are well instituted in Bermuda, so anyone investing here has their financial account information automatically submitted to relevant tax authorities.
  • Foreign Account Tax Compliance Act [FATCA]. Bermuda has a Model 2 intergovernmental agreement with the US, ensuring the same exchange of financial details to the other side of the Atlantic.
  • The OECD’s definition of tax havens. Its criteria are clear, and Bermuda doesn’t qualify; only countries that persist with a lack of transparency, no substance, and refuse to exchange information should be condemned with that label.
  • Our beneficial register keeps stricter records than most onshore. Bermuda’s 70-year-old beneficial register has a starting threshold of 10 percent ownership [vs UK and others at 25 percent]. We exchange information requested by legitimate international authorities—and fast: the UK has an agreement with Bermuda to share data within 24 hours.
  • Offshore business isn’t just about tax. Sure, jurisdictions with tax neutrality avoid double taxation, but nowadays, primary client focus is on our market’s other appealing qualities: our business environment, opportunities for portfolio diversification, the expertise of service providers, and accessible, pragmatic, respected regulation.
  • Cross-border trade fuels global financial systems. Via multi-national enterprises, offshore financial centres pave the way for growth in both developed and emerging markets and are vital for economic development around the world.
  • That pension you’re counting on? Thank Bermuda. Our market is a destination for financial investment by onshore pensions and governments. More than a third of the UK’s local government pension plans allocate money to hedge funds, according to Bloomberg. The same goes for the private sector—an estimated 64 percent of top UK corporate pension plans invest in funds, most based offshore.
  • Our tax treaties put money back onshore. Take our TIEA with Canada, for example. It allows corporations to repatriate active business income through dividends—so they can re-invest in their home country and create more jobs.
  • Privacy protects lives and livelihoods. For genuine safety reasons, preserving personal privacy and avoiding dangerous, corrupt or unstable political or financial regimes is a highly valid reason for seeking a safe harbour like Bermuda for the protection of generational wealth.
  • International finance centres enable philanthropy and impact investing. Bermuda is home to global foundations, trusts and family offices that generate measurable social and environmental good.
  • Companies built in Bermuda give, don’t take. Some of our market’s largest corporations, including 13 of the world’s top reinsurers, play a critical role in the global economy. They help stabilise communities via billions of dollars in claims paid after hits by hurricanes, floods, fires, earthquakes and other disasters.
  • Besides, we do pay tax. Sometimes it just has a different name—like stamp and payroll duty, land or customs tariffs. The estimated ratio of total government receipts in relation to GDP in Bermuda was about 16 percent in 2016–17.

The Paradise Papers presents a wonderful opportunity for Bermuda. A chance to differentiate from jurisdictions that can’t claim our longstanding, blue-chip record of transparency and compliance. To underscore that our regulatory and business ecosystem is pragmatic and appropriate. To remind the world that just because we have palm trees, sonorous tree-frogs and a rather pleasant climate, we’re not in the business of illicit, illegal, or even immoral, wrongdoings.

So, how should we respond? With honest, assured messaging—transparent in word and deed. Because Bermuda is different.

And that’s a fact.

- Ross Webber is CEO of the Bermuda Business Development Agency [], an independent, public-private partnership working to attract investment and maintain business on the Island.


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Comments (11)

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  1. Jonathan Land Evans says:

    Good stuff, for the most part (the last bullet-point gets its tax terminology mixed up a bit), but rather late. More generally, perhaps it would be more sensible if we were to style ourselves (accurately) as a respectable tax haven, rather than claiming (against the grain of most peoples’ understanding) that we are not a tax haven; i.e. pointing out that we offer both low taxes AND a pretty high degree of probity AND a high degree of transparency. Having said all that, it is mostly spitting in the wind anyway, as most people don’t care about nuance or fact and just want a good story that panders to their prejudices and preconceptions.

  2. Toodle-oo says:

    *The OECD’s definition of tax havens. Its criteria are clear, and Bermuda doesn’t qualify; only countries that persist with a lack of transparency, no substance, and refuse to exchange information should be condemned with that label.*

    Well , that ought to annoy a few of the regulars around here .

  3. Wassup says:

    Mmmmm …. it is unethical but not illegal mr Webber, you are just shooting the messenger to try and change the narrative

    • aceboy says:

      I am pretty sure stealing information actually is illegal.

    • Better Bermuda says:

      You are being sucked in by deliberate conflation. Check out the definitions of ethics, morals and may help you.

  4. I and I says:

    Great opinion article of historical reality! Keep up the good work Ross Webber.

  5. Kathy says:

    Well written, Ross. Thank you. There is certainly a lot of hypocrisy in journalism these days.

  6. Ptah obeys me says:

    Looks like that one apple in the barrel made the rest SINK. Thanks alot for helping to sink our nation and its reputation! Will they be held accountable? No. They should lose all investments and crumble like the daft cookie they are. You are trusted with 12,000,000 documents or more, with billion dollar clients, and this is how secure you are? Ha! But you would cry, “Wah wah, it’s a new age with technology and hackers, wah wah.” You get millions and billions of dollars sifting through your fingertips and you cannot muster enough money to protect your own clients and business? I am no businessman, but logical, and I can see the ridiculous nature of that scenario. It is like having presidential bodyguards who are scrawny weaklings, so slap their way out of fights, and then whine afterwards when they get a pat on the wrist.

  7. JUNK YARD DOG says:


    There is a lot of double taxation going on here .

    1) You buy a car and pay import duty , some times the duty exceed the initial price of the car, then you pay license fees , double dip !

    2) You build a house over 90% of the house construction mateial have been subject to import duty and then you pay so called land tax,you also paid stamp tax on the land when you bought it, triple dip !

    The streets are not paved with gold, just hundreds of third world pot holes.

  8. Michael Hardy says:

    The theft of the Paradise Papers is illegal, I agree. The poor security at Appleby has been ignored in this article. Appleby will come under pressure once again by the BMA (you would think).
    Most of the information leaked on the ICIJ website database is already known to the BMA.
    This theft has been known about for at least a year, why were we all not made aware of it?
    Its of public interest to know what directorships our Bermudian exempt and local companies. This can be done through registered office anyway, but not shareholders.
    What is not possible without this database is to see how many directorships a particular person has. The format of the database that is online is easier to use than any other government database.
    What hasn’t been disclosed so far are the documents themselves.
    I am sure these will first be sold to various jurisdictional regulators.
    Thats the reality of the situation, not a political posture on the legality of the theft.
    There are a lot of questions and surprises yet to be disclosed, none of which are good for Bermuda or Appleby and Estera.
    Further pressure will be brought to bear now on public registers throughout the world and Bermuda will be no exception.
    So lets have more transparency in Bermuda and start dealing with REALITY not trying to damn the messenger.

    • Stay Calm People says:

      Mike – When it becomes international standard, Bermuda will subscribe. Until then, it is hypocritical to call for Bermuda to adhere to a higher standard than the vast majority of G20 and EU countries. Similarly it is bad business practice for Bermuda to adopt a higher standard when competitors will not.

      The time will come when clear guidelines are set and the internationally accepted bar is set. Until that time, we have an economy to maintain and a debt to pay off.