Bermuda's name could be left off a list of tax havens and harmful tax jurisdictions currently being prepared by the Organisation for the Economic Co-operation and Development, it was revealed yesterday in the Budget.

Bermuda has been fighting to stay off the OECD's `blacklist' of designated `tax-havens'.

The OECD is scheduled to produce a final list of tax havens in June as part of a campaign to force changes in jurisdictions with tax policies it considers to be harmful to the world economy.

Governments that refuse to change will be subject to OECD "coordinated counter measures'' which are widely interpreted as sanctions.

Bermuda as a dependent British territory has to meet OECD regulations, and has been lobbying long and hard to stay off the list which could put off international business from settling on the Island.

But yesterday Finance Minister Eugene Cox in his Budget speech gave the first indication that Bermuda has managed to escape the scourge of the black list.

After the Budget speech Mr. Cox said that yesterday he had received good news about the OECD issue, but was not at liberty yet to elaborate.

In the Budget he said: "The OECD countries in particular have been critically examining those non-traditional and frequently small countries to ensure that any competition occurs on a level playing field, using agreed rules or operating under uniform standards and is not done through `harmful' tax competition.

"Bermuda was asked by the OECD to respond to suggestions that it is a tax haven or a harmful tax jurisdiction because the perception is that tax laws encourage mobile capital to leave established economies for purely tax reasons.'' He said he went with a delegation of Finance Ministry staff and the Attorney General to speak directly with the OECD Forum established to examine the matters.

"This resulted in an invitation to continue discussions that we trust will lead to the omission of Bermuda's name from a list of tax havens or harmful tax jurisdictions currently being prepared by the OECD.'' The OECD defines a tax haven as a jurisdiction that imposes few or no taxes, is used or perceived to be used by non-residents to escape taxation in their homelands and has laws that safeguard banking secrecy.

The OECD includes economically developing nations such as Korea and the Czech Republic, but is comprised mostly of the G-7 industrialised nations and much of Europe and Scandinavia.

Island may escape OECD list Many of its 29 nations have traditionally had high taxes on income and for the loss of capital that flows to offshore banking centres with low or no income taxes.

The International Monetary Fund estimates that money held in offshore havens grew to $4.8 trillion in 1997 from $3.5 trillion in 1992. Mr. Cox in his Budget speech said that after the collapse of the `Tiger Economies' in Asia, Bermuda had to show to the world how secure it was as an economy.

"Bermuda must demonstrate aggressively to the world its integrity and high standards as a financial centre and differentiate itself from jurisdictions of questionable standing.

"The Financial Stability Forum, composed of G-7 and non-G-7 countries as part of the move to reform the international financial architecture, will assume the job of reviewing the role of offshore centres and will examine Bermuda's place in the world picture.'' He added: "We remain vigilant in safeguarding our national interests.'' Mr. Cox also touched on the EU Code of Business Conduct and said that the way the code was to be applied to dependent states had not yet been clarified.

"Concerns about `potential harmful tax measures' and the application of European tax directives caused the Finance Ministry to visit Brussels to discuss these issues directly with staff of the European Commission.'' The review and reassessment of the relationship between the EC and overseas territories was due to be completed this month but current arrangements are likely to remain in place for another year.

Mr. Cox also said that the Bermuda's approach to money laundering was praised and endorsed by the Caribbean Financial Action Task Force council.