The following statement was released today by Finance Minister Curtis Dickinson on the Economic Substance Act 2018
On Monday, December 17, the House of Assembly united to pass the Economic Substance Act 2018.
This saw all 36 Parliamentarians united in defence of and support of our Financial Services Industry, and consequently the livelihood of our country. The people of Bermuda can be proud of their government in the collective form for uniting towards the common goal of protecting our industry. It is unfortunate however, that time after time, we are finding ourselves having to jump through hoop after hoop to continue to satisfy outside watchdog groups and oversight organizations. It is reassuring that the EU substance regime will soon become a global standard upon the OECD taking over the administration of the substance regime.Bermuda has a long history of adhering to global standards.
The necessity of the Economic Substance Act was to satisfy requirements from the European Union that companies registered in Bermuda must maintain a physical presence, employees and revenue generating activities. Bermuda does in fact have a large presence of these companies, but we do also receive revenues and support corporate activity from companies without an actual presence. The new regulations from the EU seek to end this practice. This could, in fact harm our country and economic activity in a very meaningful way. Passing this legislation was necessary, however, as had we not, we would have been blacklisted, and that would cause harm in an even more immediate way, as current financial activity from legitimate and fully compliant financial organizations could be compromised.
Hence, the collective government of Bermuda did what we had to do to preserve our economy. The public must be aware that between this current issue, and the issue of beneficial ownership, that the EU and UK watchdogs are vigilant. Despite our best efforts over the past 20 years of continually satisfying the demands, the goalposts continue to be moved to require more and more. But as Bermudians we will continue to work hard, continue to ensure we thrive, and we will continue to ensure that our financial services industry will grow. We will survive this threat.
On some issues, there is no room for partisanship. I am pleased that on December 19, the Economic Substance Act passed unanimously in the Senate.