Finance Secretary Donald Scott has written to the OECD to complain that its progress report on international tax transparency is "flawed and misleading" and that some jurisdictions may have been preferentially treated.

The letter, obtained by The Royal Gazette, was sent on April 6 - four days after the Organisation for Economic Co-operation and Development "grey-listed" Bermuda and labelled it a "tax haven".

Mr. Scott, in a two-page letter sent to Jeffrey Owens, director of the OECD's Centre for Tax Policy and Administration, said the Government rejects the "tax haven" label and seeks clarification what the Island has to do make the top tier.

And the top civil servant in the Finance Ministry requested that the OECD move Bermuda to the list of "other financial centres", with a footnote stating that it had already concluded the 12 tax information exchange agreements (TIEAs) it needed to qualify for the top tier.

The Finance Ministry confirmed yesterday that it had not yet received a reply from Mr. Owens, who told The Royal Gazette last week that Bermuda had not done enough to meet the "white list" standards in the nine years since it committed to OECD standards.

Mr. Scott mentioned in his letter that "there is an issue of fair process as there is a perception that some countries in tier 1 were preferentially treated and/or protected".

Although he did not add further detail, this newspaper understands that only a change of standard by Group of 20 (G20) leaders at their April 2 conference in London allowed Jersey and Guernsey to make the "white list".

The standard of 12 TIEAs with OECD member countries emanated from a meeting of an OECD sub-committee last year.

On April 2, both Jersey and Guernsey had signed 13 TIEAs - but two of those were with non-OECD member countries, Greenland and the Faroe Islands. The adjustment to count TIEAs with non-OECD countries pushed the the two British Crown Dependencies into the top tier. In his letter, Mr. Scott asked for clarification of standards used to compile the listing, whether other jurisdictions knew of the standard and when.

Asked whether there had been an 11th-hour change of standard, OECD spokesman Nicholas Bray told The Royal Gazette yesterday in an e-mailed statement: "Various suggestions were made as to what should be the status of the individual TIEAs (i.e. with what countries). "The agreed position of the countries and territories participating in this work is that a good indicator of progress is whether a jurisdiction has signed 12 agreements on exchange of information that meet the OECD standard.

"This threshold will be reviewed to take account of (i) the jurisdictions with which the agreements have been signed (a tax haven which has 12 agreements with other tax havens would not pass the threshold), (ii) the willingness of a jurisdiction to continue to sign agreements even after it has reached this threshold and (iii) the effectiveness of implementation."

In his letter, Mr. Scott wrote: "OECD has stated previously that in relation to tax matters, the only distinction to be made between jurisdictions is on the basis of whether or not they are cooperative.

"Bermuda is cooperative and has concluded 12 TIEAs with OECD member countries. The published list did not stand on this principle alone as there were more than two categories. We therefore consider the list to be materially flawed and misleading with respect to the substantive position and progress of many jurisdictions listed therein.

"Consequently the list also poses a risk of economic and financial disruption to all jurisdictions that were not accorded tier 1 status."

He added that OECD officials were aware that Bermuda had concluded TIEA negotiations with the Nordic Group of seven countries, as well as New Zealand and Germany, adding to its three previously signed agreements with the US, the UK and Australia. Yet the Island had been given no credit for its progress on the list.

"Our jurisdiction is well-regulated co-operative and adds stability to the international financial system through the efficient and transparent workings of our international insurance and reinsurance markets," Mr. Scott wrote.

"The Government of Bermuda rejects the label 'tax haven' as a description of Bermuda's economy in relation to the global financial and economic system."

Finance Minister Paula Cox said yesterday the Island had now concluded the negotiation of 15 TIEAs, after agreement was reached with Canada last week.

The "tax haven" label is particularly unwanted at this time, with US President Barack Obama having this week outlined proposals designed to clamp down on the use of offshore jurisdictions by US corporations and citizens to avoid taxes.