US Senator Carl Levin's beefed-up bill to clamp down on tax havens could have a significant impact on global trade and tax agreements, Finance Minister Paula Cox said last night.

Sen. Levin's bill, co-sponsored by fellow Democrats Sheldon Whitehouse of Rhode Island, Claire McCaskill of Missouri and Bill Nelson of Florida, was introduced late on Monday night in the US Senate.

Ms Cox said the bill "goes much further" than Sen. Levin's previous Stop Tax Haven Abuse Act, which was co-sponsored by Barack Obama before he became President.

And she added that the Government had already spoken with US Treasury officials on taxation issues and aimed to intensify its lobbying effort in Washington, DC.

Sen. Levin believes rich Americans use tax havens to avoid paying around $100 billion in US taxes and the bill is aimed at claiming some of that revenue for the cash-strapped US Government.

Bermuda is on the list of "secretive jurisdictions" named in the bill — despite the fact that it has had a tax information exchange agreement with the US for more than two decades.

New provisions contained in the revamped version of the bill include legislation to force foreign companies that are managed and controlled in the US to pay tax as a domestic company.

It also would make it harder to hide assets in an offshore financial centre using a tax structure known as a passive foreign investment corporation, or PFIC.

Ms Cox said last night: "Countries like the US take a variety of approaches to guard their national tax reserves. Many of the measures employed to this end affect trade in services.

"The bill represents another step in the renewal of the US economy. Notwithstanding the merits of the bill, the international implications could have a significant impact on global trade and tax agreements, and this proposal goes much further than the previous 'Levin Bill'.

"However, it is worth noting that the Ministry of Finance has already made representations to the Department of Treasury on a variety of tax issues affecting Bermuda."

Sen. Levin, chairman of the Permanent Subcommittee on Investigations, said: "Offshore tax haven and tax shelter abuses are undermining the integrity of our tax system and increasing the tax burden on middle income families. We can fight back against secrecy jurisdictions and shut down offshore tax abuses if we have the political will."

The measure was introduced as the US Justice Department sued Swiss bank UBS to turn over the names of some 52,000 Americans with offshore accounts. UBS has agreed to turn over about 250 names and is resisting providing the others, citing Swiss bank secrecy laws. Sen. Levin's committee will hold a hearing on the issue today.

Ms Cox said the Government would increase its efforts to protect the Island's economic interests.

"The Government takes any threat to our national interest seriously and is committed to redoubling our efforts and intensifying efforts to work as a team in partnership with the private sector to best protect and enhance our position with the new US administration," she said.

"Both the Cabinet Office and the Ministry of Finance rely on lobbyists to raise the profile of our national economic agenda, and our commitment to opening an office in Washington, DC this year, will only enhance our profile."

She said that basing rules and regulations on objective and non-discriminatory criteria was essential for the rule of law. "And these principles are enshrined in the USA/Bermuda Tax Information Exchange Agreement," Ms Cox added.

"Finally we believe that Bermuda's experience as a partner in one of the longest standing Tax Information Exchange Agreements in the world is invaluable and unmatched. And the Ministry of Finance has worked in lock step with the US Treasury for more than 20 years in the area of tax cooperation."