Finance Minister Paula Cox responded to US President Barack Obama's broadside on tax cheats yesterday by saying: "Bermuda is not a country that assists wealthy Americans to evade taxes."

She added that Bermuda had a long-standing tax information exchange agreement (TIEA) with the US and that the Island maintained "an effective working relationship with the Internal Revenue Service".

The Government was continuing to lobby US lawmakers against separately proposed changes to the tax code that would penalise Bermuda insurers, Ms Cox added.

The Deputy Premier also said the Finance Ministry had successfully concluded TIEA negotiations with Canada and was on target to have 16 TIEAs signed by the end of this year.

"Our longest-standing TIEA is with the US and the Ministry of Finance has an effective working relationship with the US Internal Revenue Service," Ms Cox told The Royal Gazette last night. "Bermuda is not a country that assists wealthy Americans to evade taxes.

"Further, we applaud President Obama in seeking to put Americans back to work through sensible incentives. We will monitor the developments as more details become available.

She added that President Obama's announcement yesterday was not surprising as many of the measures had been previously discussed by US lawmakers.

Ms Cox noted that both House Ways and Means Committee chairman Charlie Rangel and Senate Finance Committee chairman Max Baucus had welcomed Mr. Obama's plans, while expressing the need for further study to ensure that they did not disrupt the workings of the market and that US tax policies were fair.

"In this regard, Bermuda's important contribution to global stability through the efficient and transparent workings of its major international insurance and reinsurance markets, should stand it in good stead," Ms Cox added.

"Further, Bermuda has important allies in this field and we are working together to ensure that there is a clear understanding of the role of insurance and the nature of the tax and regulatory regimes that should apply.

"The legislative process in the US is complex and is compounded by competing vested interests at many levels. Bermuda has expressed its position on legislative initiatives that, if legislated, would have unintended market consequences for pricing of insurance products in the global as well as the US markets.

"Bermuda will continue to put forth its views in an appropriate manner and at the appropriate level with decision-makers on Capitol Hill."

She added that the Senate Finance Committee had set its legislative agenda for this year and the focus would be on a reform package for the health care system.

"Reform of international taxation is a discussion item but is not the primary focus at this time," Ms Cox said.