Bermuda Signs 16th TIEA, With France

by Phillip Morton, Investors Offshore.com

13 October 2009

Bermuda, on October 8, signed a tax information exchange agreement (TIEA) with France that will allow both countries’ tax authorities to request tax information to assist in the investigation of civil and criminal tax matters.

French President Nicolas Sarkozy previously stated that jurisdictions that fail to meet global tax transparency standards by March 2010 should be punished with sanctions. Currently, jurisdictions need to have 12 TIEAs in place to ensure a place on the Organization for Economic Cooperation and Development’s (OECD) "white list." Bermuda received international recognition in June for being the first country to ascend to the OECD white list from the gray list, with the signing its 12th TIEA with Netherlands.

Currently, Bermuda has 16 signed TIEAs in place, substantially demonstrating Bermuda’s commitment to implementing the internationally agreed tax standard, and offsetting any concern arising from President Sarkozy’s joint declaration with British Prime Minister Gordon Brown that the threshold of 12 TIEAs should be seen merely as a starting point in the move towards greater tax transparency. Further, Bermuda was most recently assessed as meeting the international tax standards by the OECD Global Forum’s annual assessment of progress, published on August 31, 2009.

Moreover, in September, Bermuda was elected a Vice Chair of the Steering Group, the policy-making body of the Global Forum – the only non-OECD country of the Chair and Vice Chairs. France, like other TIEA partners, extended its praise to Bermuda for this achievement. France is Chair of the Peer Review Group which will be responsible for the universal, robust and transparent monitoring and Peer Review process.

Bermuda's Minister of Finance, Paula Cox, commented: “Bermuda’s ties with France extend beyond our treaty relationship to working together in a leadership position of the Global Forum to advance international cooperation in tax information exchange and to represent all members of the Global Forum in achieving a global level-playing field based on fairness and transparency. Through our amicable and productive bilateral negotiation process, as well as by our mutual achievement today in signing [the TIEA], our two countries have further cemented our close relationship.”

“Bermuda now has TIEAs in place with France, Germany, the United Kingdom and the United States, who together lead the G20's fight against tax havens. These international agreements secure Bermuda’s position as a premier international financial center, and reinforce the position that we offer value in the international market place in that we support real businesses offering services worldwide and we are not a jurisdiction whose growth is based on non-transparency or secrecy.”

“Further, our TIEA partners recognize Bermuda as one of the first international finance centers to engage in partnership with OECD countries in the worldwide effort to achieve greater transparency and co-operation,” Cox continued. “This is a direct result of our experience as a partner of the United States of America in our long-standing TIEA that was signed in 1986, as well as Bermuda’s participation in the OECD’s development of the model TIEA that was adopted in 2002.”

David Ezekiel, Chairman of the Association of Bermuda International Companies, said: “This is another major step forward for Bermuda. France has a major involvement in the Bermuda market by way of ownership in and trading with Bermuda-based companies; the signing of the TIEA with such a significant partner represents substantial progress. The Ministry deserves congratulations in its continuing efforts on behalf of Bermuda and the companies that operate here.”

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