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bermuda Pushes On in E-Commerce Race

by Lisa Ugur, Tax-news.com, London

01 January 2001

Last week's news that Bermuda-based Quo Vadis will team with Nasdaq-listed e-security group Baltimore Technologies to design a complete security infrastructure for offshore e-business is the latest proof that Bermuda is ahead of most of its competitors in the race to be the leading offshore jurisdiction for e-commerce development.

From the very start of the e-commerce age, Bermuda has made known its overwhelming desire to be in the e-commerce vanguard, regarding the concept as the key to growth and prosperity for the jurisdiction. Credit where it is due, Bermuda has certainly made every effort to join the bandwaggon and optimise the offshore centre's e-commerce focus. In this latest move, Bermuda has attempted to build on its reputation as a home to blue chip international finance and e-commerce companies by fostering the development of a standard for secure e-commerce transactions.

QuoVadis was founded in 1999 by Tony Nagel, former CFO of TradeCard, and Internet startup specialising in trade finance, and Bermudian Stephen Davidson, to develop an offshore digital Certificate Authority to issue digital certificates for secure e-commerce. The company, which is backed by e-commerce incubator eVentureCentre, will develop a secure network facility in Bermuda to serve the local e-security market as well as other offshore jurisdictions.

Nagel is confident Bermuda has what it takes and is way ahead of other jurisdictions in terms of its e-commerce prowess, saying 'Bermuda is rapidly evolving as a key international hub for electronic transactions, with its active financial community and excellent telecommunications infrastructure. QuoVadis expects to reinforce Bermuda's longstanding reputation for trust and sensible regulation, and to provide the high security that the business-to-business multinational e-commerce sector requires. Bermuda's reputation and and regulatory framework already differentiate the island from other offshore jurisdictions in the eyes of international clients. An independent Certificate Authority (CA) will further enhance Bermuda's e-commerce edge.'

Bermuda is only too aware of the need for complete security in e-commerce transactions and of course is falling over itself to offer the kind of safety that offshore investors are seeking. The offshore market is naturally characterized by high value transactions and confidential transfers of information over electronic networks extending around the world. Nagel says 'the use of a Bermuda-based CA reinforces their connection to Bermuda's preferred regulatory, legal, and fiscal environment, which might not be the case if deals were transacted with a comparable onshore CA.'

Bermuda's Minister for Telecommunications and E-Commerce Renee Webb who only in May unveiled a code of conduct for e-commerce and Internet companies in order to preserve the reputation of the jurisdiction, is right behind the venture between QuoVadis and Baltimore Technologies, saying, 'In 1999, Bermuda was one of the first jurisdictions worldwide to enact legislation dealing with the formation of electronic contracts and the validity of digital signatures. The Bermuda Government is pleased to work with QuoVadis to continue to establish Bermuda as the premiere international platform for electronic transactions.'

Bermuda's E-Commerce Code of Conduct, an extension of the 1999 Electronics Transactions Act (ETA) which laid the foundation for the conduct of electronic transactions through large-scale industrial self-regulation, is designed to encourage business to observe integrity, protect personal data, avoid abusive usage, advertise truthfully, deal fairly and openly with customers, and settle complaints and disputes quickly. Those who do not comply with the ETA and code of conduct face government review, forced compliance or severe penalties.

The evidence does point to all offshore centres becoming increasingly bound up with international electronic business and the Bermudians are taking steps to ensure that they come out on top. Bermuda recently opened its first e-commerce centre, the multi-million-dollar TeleBermuda International (TBI) Centre. Staffed 24 on 7, the TBI e-commerce centre will provide secure website hosting services for companies wanting to conduct e-commerce from Bermuda. At its opening, TBI's general manager James Fitzgerald said the Centre would attract 'major new business' for Bermuda. "You needed a secure facility, you needed state of the art, you needed power, you needed skilled technicians and you needed a willing economic and legislative assembly in order to make that happen - and we have that here in Bermuda," Mr Fitzgerald said.

Certainly, the government is pushing Bermuda forward to attract e-business with the lure of excellent legislation and its committed support for commercial ventures such as TBI and QuoVadis. As a jurisdiction with its very own Department of E-Commerce, established late last year, Bermuda is probably justified in claiming that it is way ahead of other jurisdictions on the electronic business front. At the very least it should be awarded ten out of ten for effort, and high marks go in particular to Bermuda's energetic and photogenic minister of telecommunications and e-commerce, Renee Webb, who announced last week that Bermuda would host a chapter of the First Tuesday dotcom 'club' which has mushroomed in Europe and provides a network of contacts for e-business start-ups to make commercial and financial contacts.

As Ms Webb said: "We really want to get e-commerce on the map in Bermuda, and this is a way of doing it."

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