Government officials have sought to allay fears after it was discovered that Bermuda has not only been placed on the European Union’s grey List, but is powerless to get off it until October.

The Ministry of Finance said that Bermuda was temporarily put on the grey list, although Bermuda remained co-operative and committed to complying with EU mandates, and Bermuda should be removed at the next available occasion.

The next “available occasion” it turns out is eight months away.

The government’s Thursday statement also said that although on the grey list, it will not mean Bermuda will suffer any direct penalty from EU states.

During a meeting of the OECD Forum for Harmful Tax Practices (FHTP) in November Bermuda was apparently told to make changes related to the exchange of information with other jurisdictions in relation to non-compliance and other matters.

Bermuda quickly resolved the issue and it was officially recognised by the FHTP Secretariat in December to have done so.

But an additional European Union requirement will now delay a positive recommendation for Bermuda until April to the full FHTP forum.

But ratification there means Bermuda will still have to wait for removal from the grey list until the October Economic and Financial Affairs Council meeting involving the economic and finance ministers from all EU member states.

The government statement reads: “The Ministry of Finance of the Government of Bermuda reports that the island´s commitment to exchange information with international tax authorities, as recommended by the OECD Forum on Harmful Tax Practices (´FHTP´) in November 2021, has been noted temporarily in the State of Play document (Annex II of the conclusions of the EU Council of Ministers).

“The island remains a fully co-operative jurisdiction committed to full compliance.

“Annex II includes co-operative jurisdictions that have substantially met all international tax standards, but which have committed to the EU to further enhancements. Once a jurisdiction has met its commitments, it is removed from Annex II.

“In relation to Bermuda´s commitment to the EU, the FHTP will formally review the island´s progress in addressing the recommendation at its upcoming meeting in April 2022, with a view to removing the recommendation. Bermuda has already taken the necessary steps to meet that April deadline.

“In the report accompanying the EU Council's conclusions, the Council’s Code of Conduct Group “welcomes Bermuda’s co-operation and actions addressing the recommendation from the FHTP”, while also noting that Bermuda’s commitment is included in Annex II “pending a formal decision by the FHTP”.

“Consequently, it is anticipated that Bermuda will be removed from Annex II in the next relevant meeting of the EU Council, currently scheduled for October 2022, and subsequent to formal recognition of the island’s updated position at the FHTP Forum meeting in April this year.

“Today´s inclusion of Bermuda on the EU´s State of Play document does not result in direct penalties by the EU Member States.

“Bermuda remains fully committed to co-operating with the OECD and the EU in implementation of full tax governance and transparency.”