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Bermuda Announces Transparency Law

May 2011 - Tax & Private Client. Legal Developments by Hassans.

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Bermuda is to amend key elements of its business legislation in a bid to comply with Organization of Economic Cooperation and Development (OECD) recommendations and meet international standards on tax transparency.

Ahead of the upcoming OECD Global Forum on Transparency and Exchange of Information for Tax Purposes, to be held in Bermuda at the end of the month, Premier and Finance Minister Paula Cox has tabled significant new legislation, overhauling the country's current regulatory framework.

According to Cox's party, the PLP, the Specified Business Legislation Amendment Act 2011 will establish uniform guidelines for the maintenance of information and records in all Bermuda's financial sectors.

The decision to take action in this direction was made in the wake of the OECD's initial Phase I Assessment of Bermuda, in February last year.

While the OECD determined that Bermuda had met elements of the necessary criteria for the creation of an efficient and effective exchange of information network, inconsistencies remained in the country's legislative and regulatory frameworks.

The PLP has stressed that, as a result, Ministry of Finance officials undertook a detailed consultation process with Bermuda's industry stakeholders, with a view to implementing the OECD's recommendations, without impacting Bermuda's comparative advantage in the development and provision of financial services.

Commenting on the new measures, Cox has said: "This legislation is extremely important in that it will strike the correct balance between the internationally agreed standard as set out by the OECD which ensures tax consistency and transparency, while maintaining Bermuda's unique and successful business model.

I look forward to the passage of this important legislation in the House which will clearly demonstrate Bermuda's ongoing commitment to internationally agreed standards. This enactment will also allow Bermuda to file its 12 month update to illustrate our progress since the Phase 1 report was adopted in September 2010 and to prepare for our Phase 2 assessment scheduled for the second half of 2012, she added.

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