KPMG Report On Bermuda Expected To Be Positive

Mairi Mallon, Bermuda Royal Gazette

17 August 2000

This story is reproduced by kind permission of The Bermuda Royal Gazette at www.accessdata.bm

The results of a British Government probe into the way Bermuda regulates its financial institutions are expected to be generally positive, according to the Ministry of Finance.

And Permanent Secretary of Finance Donald Scott said the look at the general health of Bermuda's finance sector is due to be completed by the second week in September.

The examination is being carried out by multinational accounting firm KPMG not only into the affairs of Bermuda, but also into other UK overseas territories.

When asked yesterday if he knew what the report would say, Mr. Scott said it was "generally positive."

A delegation from the Finance Ministry will be travelling to London next month to meet with members of the Foreign Commonwealth Office, the British Treasury, and representatives of other countries to hear the results of the reports.

Mr. Scott said: "The report will be presented in London in mid September and there will be a high representation from the overseas territories."

One of the main criteria being looked at was whether financial regulators in the territories are independent of Government.

The review has been undertaken as part of a White Paper prepared by the UK Government entitled "Partnership for Progress" that deals with the UK's relationship with its overseas territories.

The review was promised last March in the White Paper on relations with Britain's colonies and will be jointly paid for by the six overseas territories involved in the exercise.

KPMG, which has an office in Bermuda, was chosen by a steering committee made up of UK Government officials and representatives of the islands involved.

A Foreign Office spokesman said: "The committee is charged with monitoring the work throughout the period of the review."

Last year the UK promised closer links with its overseas territories, as well as full British citizenship for their residents, which includes the right to live and work in Britain without restrictions.

But the UK warned that international pressure to clamp down on white collar crime and money laundering meant that the overseas territories would have to toe the line when it came to best practices in regulating their booming offshore centres.

The review will involve not only Bermuda, but the Caymans, Anguilla, the British Virgin Islands, Montserrat and Turks and Caicos, all of which are involved in offshore finance, although Bermuda and the Caymans are by far the biggest players.

The assessment is the latest in a long line of probes which has looked at the way Bermuda runs its affairs. So far this is the fifth probe the Island has faced from a variety of international bodies.

Bermuda came out well from the Organisation for Economic Co-operation & Development (OECD) initiative which was aimed at identifying harmful tax jurisdictions and was left off a list of so-called tax havens.

The Financial Action Task Force, formed by the Group of Seven Industrialised Nations (G7) and was focussing on anti-money laundering measures. Bermuda was given an clean bill of health and not listed as a non-cooperative jurisdiction.

The Financial Stability Forum, another G7 initiative, was set up to prevent instability in the world's financial systems. Bermuda was listed in Group 2 - good regulation but could do better. It is fighting to be promoted to Group 1 (good regulation).

Another report is being compiled by the United Nations Global Programme against Money Laundering, formerly known as the UN Offshore forum. This is an initiative of the UN Office of Drug Control and Crime Prevention with an anti-money laundering focus. It is looking for a commitment from jurisdictions to a minimum performance standard it has set. No decisions have been made about Bermuda as yet.

.

Recommended

Write a comment