The Bermuda business industry breathed a great sigh of relief and rejoiced yesterday at the news that the Island will not be blacklisted by the Organisation of Economic Cooperation of Development (OECD).

The organisation revealed yesterday that the Island is not on its list of countries it considers tax havens.

Finance Minister Eugene Cox is delighted with the news, which, he says, will bolster the continued growth of the Island's international business sector.

But Shadow Finance Minister Dr. Grant Gibbons cautioned that it is still unclear what Bermuda may have given away to obtain the good standing.

Responding to the news yesterday Dr. Gibbons said: "What causes me some concern is this letter of commitment that the Finance Minister appears to have given them (the OECD).

"It is not entirely clear what changes Bermuda will have to make on its existing regulations and legislations. Until we have a clear sense on what is contained, it is difficult to assess the ramifications.'' Dr. Gibbons noted that, in the past, the OECD has looked unfavourably on preferential taxation of international companies. He suggested that the letter may include promises to change or modify the percentage of Bermudian ownership from the current 60/40 ratio and the restriction of international business from trading in Bermuda.

Last Friday the OECD Council of Ministers in Paris approved Bermuda's letter of commitment regarding its efforts to tackle harmful tax jurisdictions.

The announcement is the culmination of an investigation by the OECD into the tax avoidance regimes and business secrecy contained in its report `Harmful Tax Competition: An Emerging Global Issue'.

Bermuda, along with five other countries including the Cayman Islands, vowed to adjust practices that earned them the reputation of being tax havens. It is this move which has resulted in assurances that the Island will not be placed on the OECD blacklist.

Letters of commitment from Bermuda, the Cayman Islands, Cyprus, Malta, Mauritius and San Marino each contained pledges to eliminate harmful tax practices and to engage in international standards for fair tax competition, transparency and disclosure. Each jurisdiction also promised not to implement any new harmful taxes and all agreed to comply with the standards by the end of 2005.

Raymond Medeiros, chairman of the Bermuda International Business Association (BIBA) in welcoming the news expressed confidence in the commitment letter Finance Minister Eugene Cox had signed.

"From our perspective, an appropriate level of transparency validates the integrity of our jurisdiction,'' he said. "If managed properly such an agreement does not compromise our business operations.

"Ultimately we look into the future of our business environment,'' he continued.

"It is jurisdictions that adopt and maintain international standards that will be most highly regarded. At the end of the day, these jurisdictions will by extension inspire confidence and continue to attract quality business.'' But Dr. Gibbons while skeptical about the letter did stress that the news is basically very good.

"Clearly this looks good for Bermuda,'' he said. "A lot of people have worked very hard on this over the past three years in particular I think it is very important to recognise the former financial secretary who along with a number of other civil servants worked hard to make sure Bermuda's position was clearly defined.'' Mr. Medeiros praised Government and held that Bermuda has "always provided services based on our sensible regulatory climate, sound infrastructure and depth of professional expertise''.

"Clearly the time and efforts spent by the Government for well over two years now made a very good case for Bermuda, together with input offered by the private sector,'' he said.

David Ezekiel, chairman of the International Companies Division of the Bermuda Chamber of Commerce called the OECD's decision, "excellent news''.

"This was certainly fully deserved,'' he said, "We need to be on a list of responsible jurisdictions. From the Premier on down all the partners in industry worked very hard at this,'' he continued., "While the impact is still to be seen for countries that don't make it on. This allows us to be able to get on with our lives and focus on other important matters.

"Had we not achieved this the potential would have proved a huge negative at worst, and a major distraction at best,'' he said.

`Clearly this looks good for Bermuda. A lot of people have worked very hard on this over the past three years in particular.' -- Shadow Finance Minister Dr.

Grant Gibbons.

`This was certainly fully deserved. We need to be on a list of responsible jurisdictions.' -- David Ezekiel, chairman of the International Companies Division of the Bermuda Chamber of Commerce.

BUSINESS BUC