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Good Evening, Bermuda.

I am taking the opportunity to speak with you this evening about a number of thoughts and ideas that, hopefully, will be meaningful to all who care about Bermuda. Thank you for taking the time to listen.

As we have all observed at some point or other during the year, this is Bermuda’s 400th year of existence, our 400th birthday – a singular hallmark – a call to do what we do when we celebrate our personal birthdays – Stop. Reflect on our past. Contemplate our future. Ask the same questions: Where are we? Where do we want to go? How can we get there?

I am going to share with you where I think we are as a people, where we are as a country, and the direction in which your government is headed. Importantly and ultimately, I am going to try to impress upon you that unity as a people is our best recourse for whatever we do in the present, and for whatever we face in our future.

Let’s talk about our economy. I know that some of you have been closely watching how the global recession has affected the two pillars of our livelihood – tourism and international business. I will speak candidly and put a few things in context in areas where I have heard you express your concerns.

In Tourism, we are holding our own. As many of you may recall, in 2008 – almost a year ago exactly – I came before you using this same medium because the world, particularly the United States, began facing the worst financial crisis since the Great Depression. Since then, we have all been witness to the massive bailouts that governments have had to provide to avert a global economic collapse. We have all heard of the startling unemployment figures and the tremendous loss of homes and hope.

The world has been enduring tough economic times.

The US, home to 85% of our visitors, has been enduring tough economic times.

Bermuda has been enduring tough economic times.

So, when we hear that a statistical measure of our tourism activity is the worst it has been in 30-35 years, we should not be surprised.

At this time last year, we talked about the likelihood that Bermuda would suffer during this global economic turndown –

• That we might experience lower or stagnant visitor arrivals, hotel occupancy rates and retail sales;
• That matching the statistical performance of prior years might not be possible, and
• That the credit crisis might make it tremendously difficult for developers to secure funds for new hotel construction.

Through this period, we should not be led to believe that the Government’s actions or inactions are the reason for any and all economic woes we experience. We are a capable government that can do many things, but we could not possibly cause this global economic downturn, nor could we possibly control many of its negative effects on tourism. Bermuda is another world, but we are also a part of the world. We have joined regional partners in suffering downturns in tourism arrivals and expenditures.

And, while Government can not cause or control the effects, we can and will do everything in our power to minimize the negative impact on Bermuda. We believe that we will rebound, because, technically, the U.S. recession is over and expansion has begun, although recovery is expected to be slow; and because Government continues to implement strategies that attract visitors to Bermuda as we have done throughout this challenging economic period.

Next week, we are looking forward to our 3rd PGA Grand Slam of Golf, where Bermuda and our newly redeveloped Port Royal will be showcased on TNT to 89 million U.S. homes and an audience of more than 100 countries all over the world.

The quality of talent performing at our Music Festival at the end of October is absolutely awesome, and keeps getting better and better. In spite of the tough economic times, we expect that visitors and Bermudians will not be able to resist our line-up.

Our new relationship with the Boston Red Sox is giving us great exposure in one of our longest-standing and most important gateways. We expect to begin to see more visitors as a result of this partnership over the next few years.

In London last week, I pushed the cause of a low cost carrier from the UK to Bermuda to try to replicate the reduction in prices and the increase in visitors that Zoom Airlines brought to that route. And, there are many more initiatives that our hard-working Tourism employees and partners – both local and abroad – are working on to make sure that our Tourism industry has a bright and healthy future.

As we imagined, one of the effects of the global economic downturn is the scarcity of capital for hotel projects around the world.

I have been very proud to stand before you in the past and announce several different plans for hotel development and redevelopment in Bermuda. I continue to believe that all of these projects will come to fruition and that we will still fully realize a Platinum Period in Tourism.

But I am realistic, and you should be, too. We will experience delays because our hotel developers have run into capital-raising problems caused by the downturn that neither they, nor we, could possibly have anticipated. Even with these obstacles, I am hoping that we will have financing in place and be prepared to break ground on our long-awaited Park Hyatt project in St. George’s in the next few months.

Meanwhile, it would be irresponsible of me to announce publicly which of our other projects have encountered what problems, as it is unreasonable and fiscally naive of any who would demand such an announcement. That would not help our developers who are steadfastly committed to Bermuda in spite of the global economic downturn, and therefore would certainly not help our Tourism efforts. Government will continue to work with these committed developers, as we are confident that the credit markets will loosen, and that we will be back on track toward reaching our Platinum Period.

Now, I would like to turn to the other pillar of our economy – international business.

Our government continues to value and nurture Bermuda’s unique position in the international business arena. You may be aware of the remarkable achievement of our Deputy Premier and Finance Minister Paula Cox and her Finance Ministry in signing our 16th Tax Information and Exchange Agreement, further securing Bermuda’s position as an OECD “white list” jurisdiction that is in compliance with internationally agreed upon tax standards.

You should also know that Bermuda was recently elected as Vice-Chair of the OECD Global Forum’s Steering Group, sharing that esteemed responsibility with Germany and China. This is a powerful illustration of Bermuda’s position and reputation as a premier and pristine global financial centre.

On the home front, we are in continuous contact with our international business partners, making sure that they know this Government values them and will always work hard at making Bermuda the best possible place for international business to reside.

What you may not hear about is that we are constantly attracting new businesses to our shores. In 2009 alone, we have seen over 600 new businesses make Bermuda their home. Ideal conditions continue to exist here for international business to succeed because of our effective, tried and tested regulatory model and our sterling and enviable international reputation.

In furtherance of my promise to speak candidly, it is probably appropriate at this time for me to correct a falsehood concerning the departure of some of our businesses to other countries like Switzerland and Ireland. The falsehood is that they have been motivated by the need for a more stable political environment, or that this Government is running them away. The fact is that many of them have simply sought what they believe is a more predictable tax environment. What do we mean by that?

A good case in point is Tyco. Tyco moved to Switzerland, an independent country with transparent tax treaties already in place that allow Tyco to project its tax responsibilities for years to come. These tax provisions will not be changed irrespective of what a US Congress might do. They did not move away from Bermuda to one of our competing overseas territories who are in the same boat as we are, and can potentially be negatively impacted by the whims of a US Congress.

We all know that Bermuda and other overseas territories have been threatened by anticipated changes in the US tax laws. While all the stakeholders are working around the clock to make sure that we are not harmed by any changes in the US tax laws, a few companies have chosen not to take the chance. Even though it is more costly in the short run, they have determined that the predictable tax exposure of a Switzerland or an Ireland is better for them than the perceived threat of unfavourable US taxation.

Your government understands the significance of this. And we will continue our unrelenting efforts against enactment of legislation that would be harmful to our economy. A few weeks ago, we were in Washington, DC to open the new Bermuda office. We have a great working relationship with the White House and Capitol Hill. With our new office, we will step up our efforts even more to convince the United States of our value and of the negative consequences that the US itself will incur with unfavourable tax treatment of insurance and other companies located in places like Bermuda.

We met with several Congressional lawmakers, and we also met with Attorney General Eric Holder. Maintaining our level of international business was not our only goal.
Government has been working on at least two initiatives with the new Obama administration that would have a tremendous positive impact on Bermuda.

We want Bermuda to be a beneficiary of one of the US Coast Guard programs, where as a partner country, we would be provided with high-speed interceptor boats, special communication equipment and, importantly, training of Bermudian public safety officers in drug interdiction and maritime law enforcement.

We are also redoubling our efforts to try to persuade the US government to reopen and re-negotiate the clean-up of Morgan’s Point. We will keep you apprised of our progress.
On another front, we are committed to working with the US State Department to get relief from what Bermudians call the “stop list”. We believe that it is unfair and unjust for someone who committed a minor criminal offense 20 years ago to be prevented from traveling to the U.S., or to have to undergo the humiliating experience of being stopped and detained. We understand clearly that these laws affect people all over the world – they were not just written for Bermuda. But your government will be aggressive in seeking innovative solutions to prevent young people from ever getting on the so-called “stop-list”. We shall also work on behalf of older people who have long-since paid their debt to society, and deserve to be able to freely travel.

Meanwhile, everyone in this community should be aware of Government’s commitment to fight crime. The high levels of anti-social behaviour we have seen in recent times have got to stop, so addressing the misdirection of some of our young people and the trend toward gun crime are among our greatest priorities as we look ahead.

I now speak for Cabinet and all of Government when I state that we are deeply frustrated with the current approach to tackling crime. Constitutionally, we are hamstrung. We control the purse strings but have little or no say in how the fight is managed. That is why we took the opportunity in London as recently as a couple of weeks ago to leave the UK Government in no doubt that the people of Bermuda need operational control of the Bermuda Police Service. Increasing criminal activity threatens the very social and economic fabric of our island, and it must stop. We need solutions now. And we are going to find them.

On another note, tonight, you will be pleased to know that Government is delivering on our promise for Public Access to Information, or PATI, legislation. I am elated to inform you that a draft PATI Bill is now in the public domain for consultation, and is available on Government’s website at www.gov.bm. Tomorrow, hard copies will be delivered to relevant stakeholders covered by a letter from me inviting feedback; and Friday’s Official Gazette, The Bermuda Sun, will feature information on how you can provide us with your views.

We are now less than a month away from the Convening of Parliament. My hope is that your feedback will be provided in time for us to table this Bill in the House during the upcoming parliamentary session.

With all of the focus on Tourism, International Business and the other issues I have addressed this evening, it is important that I assure you that your Government considers the well-being of our people to be equally, if not more important, than anything else. We will continue to meet the needs of everyday Bermudians.

• Free and subsidized day care has been delivered.
• There are numerous senior citizens enjoying the benefits of Future Care in spite of what you might hear. We will continue to refine this very worthwhile program for our seniors, to ensure that they will always have access to health care during their golden years.
• On Monday, we unveiled Bermuda’s first 24-hour drug treatment facility. We expect that offering intensive drug rehabilitation on the island will help turn around the crippling impact of drugs in our community and go a long way toward curbing drug-related crimes.
• We are committed to providing shelters for people who are homeless, and further, to providing them with the supportive services that they need to become fully productive once again.
• We will continue to encourage entrepreneurial excellence through a vibrant Small Business Development Corporation and the creation of Economic Empowerment Zones in key areas around the Island.
• Finally, we will be even more aggressive in finding jobs for Bermudians. We will identify companies who violate immigration and employment laws, and we will force them to stop. We will not allow our fellow Bermudians to fall between the cracks.

We’ve come a long way. And we have a long way to go. As we have experienced challenging times and look forward to exciting times, my message to you with all that we do, is that we must come closer together as we forge ahead to what the future holds for us. We need to cease to be motivated by our differences of opinion, and start to be driven by our common love for Bermuda.

As Premier of this island paradise, I am humbled, I am honoured and I am grateful. I am calling on all who live and love here to use this 400-year hallmark to begin a new paradigm – together focused as One People for One Bermuda.

Imagine. We only need to reflect momentarily to conclude that but for the UNITY of the people who landed on this then-isolated island in the middle of the Atlantic Ocean in 1609 – we would not be here today to celebrate this 400th year.

And what a fabulous celebration we are having! All Bermudians – old and young, black and white, rich and poor, pro-independence, loyalists, and royalists, and … believe it or not, both UBP and PLP – are looking forward to the honour of having Her Majesty the Queen and Prince Philip visit Bermuda at the end of November. Whatever our persuasion or philosophies, we can unite and note that the visit of Queen Elizabeth to any country in the world is an extraordinary occasion. It is a particular honour for Bermuda to receive her in this, our 400th year of existence.

In conclusion, let us commit to embark upon our next 400 years the way our forefathers must have committed to our first. Let us be remembered as men and women who lived through challenging times with hopeful hearts and positive spirits. Let us together summon the strength of our Bermudian character, and fiercely resolve to help the less fortunate and make prosperity and success available to the many and not just a few. Let us promise that day by day, year by year, with God as our witness and our guide, we will steadfastly move toward uniting as One People for One Bermuda – emboldened not by our differences, but by our common heritage and our shared hope for a prosperous future.

May God bless you and your families this evening! Thank you and Good Night!

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 island has also concluded negotiations on further TIEAs with Mexico, Canada and Japan.

Last month Bermuda signed its 12th TIEA with the Netherlands, and was removed from OECD’s grey list of tax havens.

The tax treaty was Bermuda’s 12th Tax Information Exchange Agreement (TIEA). Signing it ensured the island crossed the threshold for inclusion in the list of countries that have substantially implemented the OECD’s requirement in this area.

Bermuda is the first country to be removed from the grey list. It is expected to sign more tax treaties with more OECD countries in the near future.

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.