The Tax Justice Network website is an essential resource when tracking the secrecy jurisdiction media, providing context and analysis which make what initially seems minor offshore news surprisingly relevant.
Yesterday, for example, TJN published a blogpost explaining how the insurance industry is trying to get itself exempted from the new global tax transparency standards being developed by the OECD. If granted, this exemption could open the door to massive abuse of “insurance wrappers” which are common tools used to facilitate tax evasion schemes.
By coincidence, the day before the Bermuda Royal Gazette had reported on a visit by a delegation from Gibraltar:
“Gibraltar’s Financial Services Minister Albert Isola led an eight-person financial services contingent to Bermuda last week with an idea of mutual cooperation between the two British Overseas territories.”
“He emphasised that an offer of a Gibraltar domicile to subsidiaries of Bermuda insurers was not meant to be seen as competition to Bermuda, but as an alternative door to European business for Bermuda insurers.”
Minister Isola said: “Gibraltar is offering Bermudian based businesses that wish to operate in Europe our unique proposition, among the British Overseas Territories and Crown Dependencies, of access to the European Union single market via a Gibraltar insurance licence.”
Although it seems this particular visit was not very successful (“Gibraltar authorities may have a hard time convincing local government and business officials that there is a mutual commercial benefit to working together”), TJN’s timely blogpost casts the Gazette article in a whole new light: could Gibraltar not only be seeking to market itself as a gateway for offshore business to gain access to the European Union, but also be offering other secrecy jurisdictions to use insurance as a “wrapper”? (or perhaps Trojan horse? Wrapper sounds a bit harmless.)
The New York Times also recently reported on US hedge funds being “stapled” to Bermuda reinsurance companies to take advantage of a loophole and defer taxes indefinitely. Bermuda is ranked 14th on the Financial Secrecy Index, Gibraltar is in place 49.
– In other Bermuda news, the Gazette covers a report by the US organization Citizens for Tax Justice, which finds that 70% of US Fortune 500 companies used tax havens in 2013 and cites Bermuda as a “notorious tax haven”. The Gazette article trots out statements by various US officials and the OECD as well as research by Jason Sharman of Australia’s Griffith University to argue that Bermuda is not actually a tax haven.
– Bonus bizarro Bermuda link: The visiting minister from Gibraltar also met Bermuda Premier Michael Dunkley in his office, who appears to have been in his underwear at the time based on the photograph in this article.