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2016-12-12

BDA Refutes Oxfam Report, Stresses Bermuda’s Global Economic Value

am Report, Stresses Bermuda’s Global Economic Value

HAMILTON, Bermuda, 2016-12-11 22:46 CET (GLOBE NEWSWIRE) -- A new Oxfam report
that targets Bermuda as a corporate “tax haven” ignores the substantial global
economic contribution of this British Overseas Territory, according to the
Bermuda Business Development Agency (BDA).

“Unfortunately, many of the Oxfam assertions are based on flawed economics and
lack of understanding,” said Ross Webber, Chief Executive Officer of the BDA.
“We consider it an inaccurate, ill-informed and disturbingly prejudiced attack
on a small north-Atlantic archipelago that exerts an enormously positive impact
globally—including on the very regions and populations Oxfam wrongly accuses us
of threatening.

“Bermuda’s economic model is different to any other international financial
centre,” Webber said. “We support close to a half-million jobs globally,
creating employment not only on the island itself, but also in onshore trading
partners. That amounts to an estimated 300,000 jobs in the US and more than
70,000 in the UK through trade, foreign direct investment, and portfolio
investment capacity. In this way, our 21-square-mile country facilitates
critical economic globalisation.”

In particular, Bermuda helps preserve and grow the pensions of millions of
onshore workers, including those in the UK. The island is a destination for
financial investment by onshore pensions and governments amounting to more than
$20 billion, he said.

The island’s global reinsurance market is also vital to other countries’
economic health and survival. Bermuda is home to companies that provide 35
percent of capacity for Lloyd’s of London, and through payment of insurance
claims, they are responsible for the rebuilding of cities, coastlines and
communities around the world after the worst disasters. These include:

-- 20% of December 2015 UK flood losses
-- 62% of claims for the UK’s Buncefield oil-terminal fires of 2005
-- 9% of the World Trade Centre 9/11 claims
-- 25% of US medical-liability re/insurance
-- $22 billion to rebuild the US Gulf coast after Hurricanes Katrina, Rita and
Wilma
-- Over half of reported liabilities from the 2010 New Zealand earthquake

A notable example of Bermuda’s value, especially to those most vulnerable, is
the African Risk Capacity (ARC), Webber noted. The ground-breaking initiative
leverages Bermuda’s financial infrastructure and expertise to help African
states become more resilient and recover faster from crippling drought and
other weather-related disasters—allowing relief for the world’s least developed
nations.

Another project, Blue Marble Microinsurance, involves a consortium of eight
insurance companies, with operations in Bermuda, that have joint ventures
designed to close the protection gap in the developing world. The first
venture, in Zimbabwe, was announced last month; its aims are to provide food
security, financial inclusion, and the advancement of microentrepreneurs.

Oxfam’s labelling of Bermuda as a tax haven contradicts the Organisation for
Economic Cooperation and Development (OECD), Webber said. In its 2009 report,
Countering Offshore Tax Evasion, the OECD identified four factors that must all
be met to qualify as a tax haven: lack of transparency; lack of information
exchange; no substantial activity; no or nominal tax on income. By contrast,
Bermuda has real business conducted by physical companies in its jurisdiction;
is transparent and compliant; and exchanges information via Tax Information
Exchange Agreements (TIEAs) and the Multilateral Convention on Mutual
Administrative Assistance in Tax Matters. Bermuda also levies a 15.5-percent
income tax on payroll.

“Our unique tax system was designed to support our island’s infrastructure,”
explained Webber. “For over a century, we’ve used a consumption-based, duty-tax
system to provide revenue for our government. Our fiscal sovereignty is an
international right that should not be ignored.”

“We have long been at the forefront of transparency, cooperation and compliance
with the highest international standards. That is more than evident in
Bermuda’s numerous treaty partnerships with nations around the world and our
leadership on guiding the evolution of regulatory best practices,” he said.

“Oxfam’s assertions may make great headlines, but they just don’t reflect
economic reality,” Webber concluded. “Cross-border trade via multi-national
enterprises is the fuel that keeps global financial systems running smoothly.
And Bermuda, as a genuine example of a quality financial centre, helps pave the
way for growth in both developed and emerging markets, providing for vital
economic development around the world.”

CONNECTING BUSINESS

The BDA encourages direct investment and helps companies start up, re-locate or
expand their operations in our premier jurisdiction. An independent,
public-private partnership, we connect you to industry professionals,
regulatory officials, and key contacts in the Bermuda government to assist
domicile decisions. Our goal? To make doing business in Bermuda smooth and
beneficial.

MEDIA CONTACT:
Rosemary Jones
Communications Manager
rosemary@bda.bm
441 278-6558
441 337-4696

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