Bermuda is negotiating tax information exchange agreements (TIEAs) with 12 countries in an effort to boost transparency as world leaders look to clamp down on secretive tax havens.

The Island already has three TIEAs in force, with the UK, US and Australia, but Finance Minister Paula Cox told the House of Assembly that number "will have increased appreciably by the end of next month".

Under the terms of the Island's existing TIEAs, Bermuda is obliged to obtain only information that is physically "in Bermuda".

MPs voted for that stipulation to be dropped — through the International Cooperation (Tax Information Exchange Agreement) Amendment Act 2009 — to facilitate the negotiation of future TIEAs and increase the Island's level of transparency in the eyes of the world.

In putting the case for the amendment, Ms Cox highlighted the stated plans of European leaders to draw up a list of uncooperative tax havens and to prepare "a toolbox of sanctions" to use against them.

And she had a slight dig at Switzerland — the new domicile of a number of international companies to have moved their holding companies out of Bermuda over the past two months, including Tyco International and Foster Wheeler.

"Bermuda's willingness to enter into TIEAs has been highlighted and commended by various international agencies, such as the Organisation for Economic Cooperation and Development (OECD)," Ms Cox said on Monday. "This is in stark contrast to comments recently reported in the media in respect of Switzerland.

"French President Nicolas Sarkozy has stated that he does not rule out that Switzerland might be included on a list of uncooperative tax havens being drawn up by the OERCD."

She said that Bermuda's TIEA with the US, signed in 1988, was one of the longest-standing such agreements in the world and stood the Island in good stead to withstand global scrutiny.

The Island needs a minimum of 12 TIEAs to comply with a recommendation made last year by a subcommittee of the OECD), Ms Cox said.

The OECD Global Forum was likely to endorse the new standard when it next meets later this year, the Minister added. In comparison with Bermuda's three TIEAs, she pointed out that the Isle of Man had signed 11, Jersey 10, Guernsey nine, the Netherlands Antilles four and the British Virgin Islands three.

"Therefore, the Ministry of Finance is currently engaged in negotiating a further 10 TIEAs with OECD states and two TIEAs with European Union (EU) states," Ms Cox told MPs, adding that the Ministry had established a dedicated Treaty Unit to implement and manage the TIEAs.

The Island's "in Bermuda" condition for exchange of information had elicited "strong reservations" in negotiations with other countries who perceived it as "a stumbling block to cooperation and transparency", Ms Cox said. Maintaining the condition would be a barrier to sealing several TIEAs by the end of the year.

The "in Bermuda" restriction was introduced 23 years ago to guard against the Island being used as a conduit for information involving other countries that may not be subject to a TIEA, a process known as "fishing".

Changes in the way of doing business, particularly with the Island being home to so many global corporations, meant it was time for the restriction to be dropped, she said. None of the Island's competitors impose a similar restriction.

"Advances in information technology and telecommunications enable a company's information and data to be held in multiple jurisdictions," Ms Cox said.

She cited the words of Isle of Man Treasury Secretary Allan Bell, who said that smaller jurisdictions that failed to meet international transparency requirements were "doomed to disappear".

"Bermuda will not disappear either now or in the future," Ms Cox said. "However we intend to take the necessary steps to properly position our TIEA platform so it continues to be both strategic policy and in our national interest."