French President Nicolas Sarkozy has previously stated that jurisdictions who fail to meet global tax transparency standards by March 2010 should be punished with sanctions. Currently, jurisdictions need to have 12 Tax Information Exchange Agreements (TIEAs) in place to ensure a place on the Organization for Economic Cooperation and Development’s (OECD) ‘white list’. Bermuda received international recognition in June for being the first country to ascend to the OECD white list from the grey list, with its signing its 12th TIEA, with Netherlands.

Currently, Bermuda has 16 signed TIEAs in place, substantially demonstrating Bermuda’s commitment to implement the internationally agreed tax standard, and offsetting any concern arising from President Sarkozy’s joint declaration with British Prime Minister Gordon Brown that the threshold of 12 TIEAs should be seen merely as a starting point in the move towards greater tax transparency. Further, Bermuda was most recently assessed as meeting the international tax standards by the Global Forum’s annual assessment of progress, published on 31st August 2009.

Moreover, in September, Bermuda was elected a Vice Chair of the Steering Group, the policy-making body of the OECD Global Forum. Bermuda is the only non-OECD country of the Chair and Vice Chairs of the Steering Group of the Global Forum. France, like other TIEA partners, extended its praise to Bermuda for this achievement. France is Chair of the Peer Review Group which will be responsible for the universal, robust and transparent monitoring and Peer Review process.

Minister of Finance Paula A. Cox, J.P., M.P., commenting on today’s signing, said: ‘Bermuda’s ties with France extend beyond our treaty relationship to working together in a leadership position of the Global Forum to advance international cooperation in tax information exchange and to represent all members of the Global Forum in achieving a global level-playing field based on fairness and transparency. Through our amicable and productive bilateral negotiation process, as well as by our mutual achievement today in signing, our two countries have further cemented our close relationship.’

The Minister continued, ‘Bermuda now has TIEAs in place with France, Germany, the United Kingdom and the United States, who together lead the G20′s fight against tax havens. These international agreements secure Bermuda’s position as a premier international financial centre, and reinforce the position that we offer value in the international market place in that we support real businesses offering services worldwide and we are not a jurisdiction whose growth is based on non-transparency or secrecy.’

Bermuda’s TIEA with France includes all standard means to ensure due process is followed in tax information requests to Bermuda, including, but not limited to, the following provisions: the request must not pertain to information in the possession or control of a person other than the taxpayer that does not relate specifically to the tax affairs of the taxpayer; the information is protected from disclosure under the laws of Bermuda on the grounds of legal professional privilege; the requesting party’s request for information must be obtainable under its own laws for the purposes of the administration or enforcement of its tax laws or in response to a valid request from the Minister under the agreement; the disclosure of the information must not be contrary to public policy; the requesting party must keep the information confidential and may not disclose it to any unauthorized person.

Bradley Kading, President and Executive Director of the Association of Business Insurers and Reinsurers (ABIR), praised today’s development: ‘Bermuda is an important trading partner for French ceding insurers. It may not be widely known, but ABIR members provide an estimated 35% of the property catastrophe reinsurance purchased through the broker market by French insurers. Bermuda companies play an important role in managing European flood and windstorm risk. In addition, Bermuda’s insurers and reinsurers will pick up an estimated 22% of the liabilities for the tragic Air France plane crash earlier this year. Bermuda’s insurers and reinsurers play an important role in the global market for large loss property and liability events.’

David Ezekiel, Chairman of the Association of Bermuda International Companies (ABIC) echoed Mr. Kading’s sentiments: ‘This is another major step forward for Bermuda. France has a major involvement in the Bermuda market by way of ownership in and trading with Bermuda-based companies and the signing of the TIEA with such a significant partner represents substantial progress. The Ministry deserves congratulations in its continuing efforts on behalf of the Bermuda and the companies that operate here.’

The list was published at the end of the G20 meeting in London by the Organisation of Economic Cooperation and Development (OECD).

The ‘grey list’ comprised countries that had not signed Tax Information Exchange Agreements (TIEAs) with at least 12 other countries.

Bermuda currently only has TIEAs with the US, UK, and Australia.

The island did, however, avoid being blacklisted and not committed to an internationally agreed tax standard.

The blacklisted countries were Malaysia, Costa Rica, Philippines, and Uruguay.

The other countries on the ‘grey list’ were Andorra, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Bahrain, Belize, British Virgin Islands, Cayman Islands, Cook Islands, Dominica, Gibraltar, Grenada, Liberia, Liechtenstein, Marshall Islands, Monaco, Montserrat, Nauru, Antilles, Niue, Panama, St Kitts and Nevis, St Lucia, St Vincent & Grenadines, Samoa, San Marino, Turks and Caicos Islands, and Vanuatu.