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British Overseas Territories Respond to Miliband

by Jason Gorringe, Lowtax.net, London
13 February, 2015

The Cayman Islands and Bermuda have dismissed UK opposition leader Ed Miliband's recent comments on tax avoidance and tax information exchange.

Referring to Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, Jersey, Gibraltar, Guernsey, the Isle of Man, the Turks and Caicos Islands, and Montserrat, Miliband told the BBC that: "Billions of pounds are being lost in tax avoidance. Today we're serving notice on tax havens linked to Britain that they must open their books within six months of a Labour government or face international action. If any Overseas Territory or Crown Dependency does not meet this deadline, we will ask the Organisation for Economic Co-operation and Development (OECD) to put them on the OECD's tax haven blacklist." Specifically, Miliband is calling on these territories to establish publicly accessible registers including information on the beneficial ownership of companies registered in their territories, although no nation currently has such a registry in place.

In response, Anthony Travers, the Chairman of the Cayman Islands Stock Exchange and former Chairman of Cayman Finance, said: "With his comments on the role of the OTs, Miliband shows himself as more hopelessly out of touch in relation to international tax avoidance than in relation to domestic matters. In fact the Overseas Territories have maintained complete records on ultimate beneficial ownership to the international gold standard set by the OECD for over two decades."

"What quite the OECD would make of Mr Miliband's threatened report given the OECD's own verification on the subject and the OT's commitment to the OECD Automatic Reporting Standard is a matter for conjecture and possible further embarrassment."

"Nor – in the light of the unlimited powers to undertake investigation of these beneficial owners granted by the Overseas Territories to the IRS and HMRC by treaty – does his suggestion that the 'authorities' have been hampered in undertaking tax investigations bear any relation to the reality."

Travers said: "An informed politician, genuinely concerned about tax evasion and tax avoidance, as opposed to making populist sound bites, should be lauding the standards of transparency set by OTs as the example to which other [onshore] jurisdictions should now be held..."

Bermuda responded by pointing out that it has had a central register of beneficial ownership since the 1940s and leads the way internationally in terms of transparency. Bermuda's Premier, Michael Dunkley, said: "The Government of Bermuda remains open to continuing dialogue with the UK Government, the UK opposition, and all other interested parties, in sharing best practice across borders in areas of corporate transparency, and the fight against fraud and crime."

"We would also remind Miliband of Bermuda's strategic economic contribution to the UK, which includes direct and indirect employment in the UK of 100,000 people, as well as our role as a global hub for the reinsurance and insurance industries, providing the critical underwriting required for damage arising from natural disasters and terrorist events."

Other British OTs and the Crown Dependencies (Jersey, Guernsey, and the Isle of Man) also responded in a similar vein. Jersey pointed out that among the key outcomes of the last meeting of the G-20 nations was an endorsement of the robustness of the current Financial Action Task Force (FATF) approach on the retention of beneficial ownership information and exchange on request, with no agreement on that information's public disclosure.


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