EU removes Bermuda from 'blacklist' of non-cooperative tax jurisdictions

Bermuda has been removed from the European Union's so-called blacklist list of "non-cooperative" jurisdictions following a meeting of EU finance ministers on May 17.

The re/insurance hub one of the 15 countries added on the blacklist in March for failing to meet good tax governance standards. Bermuda was moved from the so-called grey-list to the blacklist for having failed to follow up on commitments previously made but not taken.

The Bermuda Premier David Burt had blamed the EU’s action on a “minor technical omission”. He said that one paragraph, which appeared to be a duplication in almost identical language in a draft, was “unintentionally omitted”. He said that despite the omission being discovered and immediately addressed, the reinsertion of the omitted line “appears not to have been good enough for the EU”.

Premier Burt and finance minister Curtis Dickinson explained to European tax officials the reasons for which there was a technical omission in its Economic Substance Regulations submission - which has now been corrected to the satisfaction of European authorities.

Bermuda has now been placed on a "grey-list" and have agreed to take the required steps to avoid being blacklisted next year. This includes further expanding its legislative framework, to include the EU’s economic substance requirements for collective investment funds (CIVs).

Speaking at a meeting of the Economic and Financial Affairs Council (Ecofin), Dickinson said: "[I'm] extremely pleased and thankful that Bermuda has been removed from the EU’s list of non-cooperative tax jurisdictions.

"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.

Bermuda’s global industry groups have also welcomed the decision after all sectors worked collaboratively with the island's government and regulator to ensure a successful result.

“Bermuda can be proud of our market’s long-respected record on compliance and tax-transparency—the island remains a jurisdiction of choice for reputable businesses,” said BDA CEO Roland Andy Burrows. “Today’s decision is the right one, and we welcome it as a testament to the top-tier reputation we’ve worked hard to build over many decades. We thank the government for its pro-active response, as well as the regulator and all our industry stakeholders.”

Albert Benchimol, president and CEO of AXIS Capital and current chair of ABIR said: “As the global center of risk transfer, ABIR believes Bermuda’s international business sector meets or exceeds worldwide requirements. We applaud the government’s legislative reform package which further enhances that framework, and its commitment to ensuring clients and markets worldwide continue to benefit from Bermuda’s critical financial capacity and leading risk management expertise.”

John Huff, president & chief executive officer of ABIR, added: “The European Union is a very important market for Bermuda (re)insurers, and our members continue to take on increasing amounts of risk in EU member states. The Bermuda market has paid $72.8 billion to European Union policyholders and cedents during the past 20 years. Our member companies remain strongly committed to the European market, European ceding companies, and European policyholders.”

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