David Cameron’s campaign to destroy the “cloak of secrecy” around the ownership of offshore companies has been snubbed by the richest and most important of the UK’s oversea territories.
Bermuda boasts of being the “risk capital of the world” because of the huge number of insurance and re-insurance companies registered on the islands, which account for more than a quarter of Bermuda’s GDP.
Bob Richards, finance minister of Bermuda, was in London this month, warning that the islands face a hostile economic climate, despite being host to many of the world’s insurance companies, and having a per capita income of nearly £55,000 – one of the highest in the world.
After his departure, he announced that Bermuda would “reserve any commitment” to create a register of who owns Bermuda-based companies until after the UK, USA and Canada had created registers, which means a delay of several years at least.
“If we agree to a public register while our competitors around the world do not, we will put ourselves at a distinct disadvantage, severely damaging our economy,” he said.
When David Cameron hosted the G8 summit in Northern Ireland in June 2014, he urged the richest nations to join him in a worldwide campaign for transparency, claiming it would be a potent weapon against corruption and international crime. In line with his campaign, the UK has promised to create a public register that will identify the beneficial ownership of every UK company. Denmark is also creating a register, and the EU is debating the issue.
In April, Mr Cameron wrote to the heads of governments of overseas territories urging them to copy the UK’s example.
But the pressure on these territories creates resentment, and fears that wealthy clients would be targeted by criminals if they were publicly identified. The Bermuda government denies that the islands’ financial system makes them a haven for criminals or tax dodgers.
Mr Richards said: “Bermuda has for the last 75 years led the way in terms of transparency, having established a legislative framework requiring that persons wishing to incorporate in Bermuda provide central authorities with information on the proposed beneficial owners of the business.
“Bermuda has never been a jurisdiction with bank secrecy laws. Whilst we respect the privacy accorded to people bestowed by British Common Law, we are not in the business of parking and hiding tax evaders’ money from legitimate authorities. If you are a tax evader, a terrorist financier or a fraudster, don’t use Bermuda. We don’t want your business and you are not protected on our shores.”