Bermuda: BIBA Speaks Out on Tyco and Corporate Inversions
Last Updated: 19 March 2003

March 7, 2003… Jeff Conyers, Chairman of The Bermuda International Business Association (BIBA), spoke out today on Tyco International Limited’s incorporation in Bermuda, following the company's annual shareholder's meeting held here today.

"The Bermuda International Business Association and its members are mindful of the perception created by the media that Bermuda is helping U.S. companies to avoid tax and is playing a non-substantive role in the international business economy. As we seek to build and enhance our international business community, while protecting the Island’s reputation, we are mindful that the Island’s reputation has been immensely important to its success to date and will continue to be important going forward.

With this said, we believe it is important to respond and clarify several issues related to the most recent media coverage of Bermuda and the specific focus on Tyco International Ltd.’s upcoming annual meeting to be held in Bermuda on March 6, 2003. It is critical to note that Tyco did not in fact reincorporate to Bermuda as it has been reported, but rather the location of the company’s headquarters in Bermuda was the result of an acquisition made several years ago.

In the case of Tyco and other companies that establish their headquarters on-island, we want to stress that Bermuda does not actively recruit companies to reincorporate in Bermuda. Instead, Bermuda has always taken a conservative approach to incorporating companies. This can be seen in the modest number of international companies on our register (approximately 13,000) when compared with many other offshore jurisdictions that have hundreds of thousands of companies.

A key element of the conservative approach that Bermuda has taken to incorporations is the rigorous "know your customer" review that all applications are subject to. This approach has always been in place in Bermuda, but is only now being put in place in several other offshore jurisdictions and is still noticeably absent in many others.

Finally, we would like to take this opportunity to highlight Bermuda’s long and valued relationship with the United States. There is a highly respected tax convention between our two nations - the US/Bermuda Tax Treaty of 1986 - that sets a precedent for the strength of our relationship. Moreover, it is our success in working together to address key economic issues that has solidified our history of cooperation and respect for our mutual rights to sovereignty and self-government.

To be clear, Bermuda has always been focused on quality over quantity. Bermuda’s broader standing and attractiveness in the international business world is driven in part by a business-friendly environment and a stable and growing economy. Contrary to some assertions, our country is well regarded by the international business community and by a number of international regulatory bodies and governments including the OECD, FATF, UK and US governments. Bermuda has a history of maintaining and implementing legislative and regulatory provisions that encourage innovation from business while maintaining the highest standards of conduct. Bermuda’s policy and philosophy with respect to international business transactions is vigorously enforced by both businesses and government, thus ensuring that only legitimate, substantive business is conducted on the Island."

About the Bermuda International Business Association

The Bermuda International Business Association (BIBA) is a business organization of Bermuda resident service providers who provide quality banking, legal, accounting, financial, trust, management and e-commerce services and products to the international client. BIBA works with the private sector and Government to develop and promote the island as the preeminent offshore business and financial services jurisdiction.

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