HAMILTON, Bermuda, Mar 15, CMC – Premier David Burt has shouldered the blame for an editor’s error in deleting a paragraph in a document that led to Bermuda’s inclusion on a European Union (EU) blacklist of non-cooperative jurisdictions branded tax havens.
A British Overseas Territory, Bermuda is among 10 countries that have been added to the EU’s tax haven blacklist, including Barbados, Dominica, Aruba and Belize.
“This issue is one for which we must take responsibility and as leader of the government, in the legislature to whom the government I lead is collectively responsible, I have no difficulty in saying the buck stops at my desk,” Burt told the House of Assembly.
Burt said the Progressive Labour Party (PLP) government had worked hard to pass almost 50 pieces of legislation and other statutory instruments to meet the requirements of both the Caribbean Financial Action Task Force and the EU’s requirements on the economic substance of companies doing business in the country.
“Unfortunately, at the end of the process on economic substance a minor technical omission in our regulations — essentially what appeared as a duplication in almost identical language in our drafts — was unintentionally omitted.
“Once the omission was discovered, it was immediately addressed. Despite the good faith shown over the last year and our immediate action, the reinsertion of the omitted line appears to not have been good enough for the EU.”
The Premier said the two similar paragraphs were – – “Taking the strategic decisions and managing and bearing the principal risk related to the development and subsequent exploitation of the IP (intellectual property) asset,” and “Taking the strategic decisions and managing and bearing the principal risk related to any third party acquisitions and subsequent exploitation of the IP asset.”
Burt said an editor had believed the paragraphs had the same intention and deleted one of them.
“The fact of the matter is this particular line was missed. What took place is the regulations, which are in front of the EU right now, are compliant with what was necessary. The only issue of compliance, and there have been numerous back and forths with the commission, was this one line.”
Minister of Finance Curtis Dickinson insisted that Bermuda is a cooperative jurisdiction and that the UK Government had backed the island yesterday.
He said the next meeting of the EU Committee of Finance Ministers will be in May, and Bermuda will make sure the committee understands the island is compliant before then.
He said he had met Opposition Leader Craig Cannonier and others and warned them about the possibility of Bermuda being placed on the blacklist.
Cannonier said the One Bermuda Alliance was “disappointed” at Bermuda’s inclusion on the EU list.
“Bermuda has a stellar track record of compliance … Bermuda has also been extremely co-operative with the EU in this process. The government disclosed that it missed an EU deadline. This is unfortunate, because it will likely take time for Bermuda’s improper inclusion in the EU list to be remedied.
“Although the EU decision is regrettable, it does appear to be based only on a technical failure, rather than a substantive complaint by the EU.”