The European Union and the United States reaffirmed Bermuda’s compliance this month, as it signed multi-national agreements highlighting its ongoing reputation for cooperation and tax transparency.
Media sensationalists frequently name small islands, countries, and territories to be “tax havens’” which can be synonyms for tax evasion and secrecy. The island nation of Bermuda is neither. In fact, it’s quite the opposite.
During the war on terror, and as far back as the “Cold War,” Bermudans served in British Armed Forces. They fought alongside the USA and its allies. They have not only stood with the forces of good during war, but also share the values of democracy, rules of law, and fair practices. Unlike so called “Tax Havens,” what attracts successful companies, insurers and re insurers to its shores is a tax system that not only pays for high-end public services, but also attracts a highly skilled workforce.
This fall, Bermuda was the first “across the pond” territory to be awarded the white list status by France for Country by Country reporting. Additionally, the island is a signatory of the Multilateral Competent Authority Agreement for automatic exchange of financial account information and signed a Model 2 agreement with the US, within the Foreign Account Tax Compliant Act, once again, providing the exchange of financial information from its institutions.
The Bermuda Business Development Agency stated, “Bermuda Understands and Embraces the worldwide movement towards greater financial transparency… These factors differentiate Bermuda from other financial centers, and we stand by that reputation.”
Given the recent hacks that financial institutions have had to weather in the previous years, there is a definite opposition to transparency by a select few. This, however, may stem from a systemic confusion regarding the difference between privacy and secrecy.
A Bermuda based Insurance company, for instance, WellAway Limited, understands the difference. Under many regulations in regards to HIPPA, The Health Insurance Portability and Accountability Act of 1996, a rule that regulates the use and disclosure of protected health information (PHI) held by “covered entities” Privacy is the protection of those who need to be protected. WellAway Limited offers health insurance products that meet US Healthcare regulations as well as worldwide coverage for expatriates. Insurers such as this, understand the difference between privacy and secrecy, having a deep understanding and years of practice guarding their member’s information, while providing government entities the required information to ensure upstanding service and adherence to the law.
In a similar fashion, the tax information exchanged between Bermuda and multi-national agencies protects the personal information of parties involved. Secrecy is another matter completely. It is of a more sinister nature: the concealment of information that should be disclosed usually to keep illegal activity from the public eye for monetary gain. Secrecy is not condoned by Bermuda’s positive record of compliance with international transparency laws.
In the aftermath of the hacking of Bermuda-based law firm Appleby, Bermuda’s high-ranking officials found themselves relieved that their upstanding business and transparency practices where highlighted by the US and the EU shortly after, assuring the world that Bermuda is not a place to hide money.
Armando A. Diaz, Writer