BERMUDA says it will sign an inter-governmental agreement (IGA) with the United States and Britain saying the decision will further cement the British Overseas Territory as a reputable jurisdiction for conducting business in a transparent manner.

Finance Minister ET Richards said the accord with Washington follows widespread discussions with local stakeholders and US Treasury officials.

He said London has already produced an official draft IGA Model 2 for consideration by Bermuda.

“I wish to thank the USA and UK FATCA (Foreign Account Transaction Compliance Act) officials for their very helpful exchanges with Bermuda Ministry of Finance officials over a very long period of time leading up to today’s announcement and I look forward to concluding negotiations with both countries as quickly as possible,” Richards said.

“This step will further cement Bermuda as being a reputable jurisdiction for conducting business in a transparent manner.

“In short, Bermuda is doing its part to discourage anyone who comes to a misguided conclusion that they can use Bermuda to engage in breaking the tax laws of other countries and get away with it,” Richards said, adding that Washington created the IGA Model 2 as one of two options available to countries in order to comply fully with USA policy for government-to-government FATCA agreements.

Washington said it welcomed the agreement with a US Treasury official, Mark Mazur, saying “we appreciate Bermuda’s leadership and look forward to helping facilitate an efficient exchange of tax information and strengthening Bermuda’s commitment to global tax transparency”.

Richards said Bermuda has no need for reciprocal receipt of FATCA-style information from the United States, United Kingdom or any other government, nor does the island have laws that prevent clients of Bermuda banks giving their bank the approval to share their client information directly with the Internal revenue Service (IRS).

Richards said that Bermuda is also seeking to sign a FATCA IGA Model 2 with the G5 initiative on multilateral automatic exchange.

“Here again, Bermuda signing the G5 Multilateral framework represents a Bermuda government intergovernmental assurance that the European Union country signatories with Bermuda will receive FATCA information on an automatic basis directly from foreign financial institutions in Bermuda.”

He said Bermuda is also fully committed to the G8 gold standard on the Beneficial Ownership objective of the Financial Action Task Force (FATF).

“As you know Bermuda for decades has required companies setting up shop in Bermuda to file beneficial ownership information with the Bermuda Monetary Authority and we have recently passed legislation to license all Corporate Service Providers (CSPs) in Bermuda and bring them under the umbrella of the Proceeds of Crime Act that imposes the FATF standard on beneficial ownership.

“Therefore, Bermuda is already on record as being committed to this objective through the work of our National Anti-money Laundering Committee (NAMLC),” he added.

— CMC