British media including leading business publication the Financial Times (FT) is reporting that Bermuda will not cooperate with a UK call to make the identities of company owners public.

The story states that Bermuda, which it called “the richest of the UK’s overseas territories”, has “snubbed David Cameron’s call to rip away the ‘cloak of secrecy’ by creating a public register of the ultimate owners of its companies.”

The newspaper quoted Finance Minister Bob Richards, who said during a Bermuda Society dinner in London last week: “If we agree to a public register while our competitors around the world do not, we will put ourselves at a distinct disadvantage, severely damaging our economy.”

The story continued: “The offshore centre, the third largest reinsurance centre in the world, brushed off Mr Cameron’s entreaties to ‘set a new standard’ for transparency of company ownership, insisting it had ‘led the way’ on transparency for the last 75 years.”

The FT called Bermuda’s position “a setback” for Mr Cameron. The publication stated: “The move is a setback for the Prime Minister who has exhorted all the UK’s offshore finance centres to back the move, after making transparency a centrepiece of last year’s G8 summit in Northern Ireland. Mr Cameron told MPs this week that the push to increase transparency was ‘vital in tackling the cancer of corruption that does so much to destroy countries and to increase risks to our own security’.”

The FT reported that Mr Cameron told the Crown Dependencies and Overseas Territories in April: “The rest of the world is watching us closely and a public registry will demonstrate the sincerity of our commitment to improve corporate behaviour and set a new standard for transparency of company ownership.”

The publication said the pressure on the UK’s offshore centres to reveal the names of beneficial owners is the latest in a series of global initiatives: “to crack down on tax evasion and financial crime in the wake of the global financial crisis. But it has met opposition from many financial centres that argue it would infringe their clients’ privacy and expose them to the risk of kidnapping and identity theft.

“Bermuda said it would not adopt a public register ahead of the UK, US and Canada, making it extremely unlikely it would ever happen. The US has announced plans for its tax authority to start collecting beneficial ownership information, but it has so far failed to meet long-standing international standards and opposition to any public register would be intense.

“The efforts by Westminster to force the offshore centres to make sweeping disclosures about company owners has caused resentment because they believe their standards are already higher than big countries such as the US and the UK.”

Mr Richards had told the Bermuda Society Bermuda already cooperates and shares information with other countries. He said: “It is important to note that Bermuda has never been a jurisdiction with bank secrecy laws, despite what you might read in the media. Nothing could be further from the truth. We do, however, respect the privacy accorded to people according to British Common Law.

“We have gone out of our way to cooperate with other countries’ tax authorities when it comes to sharing information on their taxpayers doing business in Bermuda. We have had a tax information exchange agreement with the US since 1986. We were one of the early adopters of FATCA. If you include the Multilateral Tax Convention of Tax Matters, which we signed last year, Bermuda has over 70 tax information exchange agreements (TIEAs) with other countries. And when we are asked for information by one of our TIEA partners we are prepared to use the courts to enforce the request.”

Mr Richards added: “In the past year, I have taken three recalcitrant entities to court for dragging their feet on TIEA requests and have won all three times. So we take our obligations seriously in this regard.

He added: “One thing is certain if you are a tax evader, a terrorist financier or a fraudster, don’t use Bermuda. We don’t want your business and you are not protected on our shores.”

Mr Richards also told the Bermuda Society: “Despite having no hand in creating the OECD (Organisation for Economic Development and Cooperation) tax system, Bermuda has for the last 75 years led the way in terms of transparency, having established a legislative framework requiring that persons wishing to incorporate in Bermuda provide central authorities with information on the proposed beneficial owners of the business.”

The FT said that a review by the OECD last year reported that the Bermudian Finance Ministry had the power to access up-to-date ownership information that was required to be kept by the companies themselves at their office, but: “ ... the financial penalties and the frequency with which enforcement measures have been exercised had been low in relation to a number of key record-keeping obligations.”

Mr Richards also explained: “There are a few important points to be made here. Please remember I do not speak for OT’s, only for Bermuda. While we fully support the UK’s desire to uphold global standards of tax and transparency, the only jurisdiction that I know which actually presently has such a register is Bermuda. There have been legal requirements, under the Exchange Control Act and the Companies Act, to provide information on the beneficial ownership of companies registered in Bermuda since the 1940s.

“We also have an active automatic system to keep the register up-to-date as ownership changes over time. It is a central register, i.e., not held by corporate service providers, but by a government entity, in our case the Bermuda Monetary Authority. Information kept at corporate service providers is subject to obfuscation by CSPs (corporate service providers) who in most cases are law firms. We share the information we have with international law enforcement when they are investigating specific cases. We do not share this information with Tom, Dick or Harry of the public.

“As far as I can tell, the quality of the data the UK will collect, if or when the register is constructed, will not be as detailed or complete as ours. However, because we are a dot on the map, we are being pressured to deploy a mousetrap that will be inferior to the one we already have, by someone who doesn’t have it himself.

“This is the problem with being a dot.”