Bahamas: Taxation, Globalization and Free Trade in The Bahamas

Last Updated: 20 August 2004

Article by Bruce Bell and Kevin Burrows

Outline

  1. Clearing up misunderstandings about how tax free jurisdiction like The Bahamas can function
  2. Examining international tax treaties and information exchange initiatives
  3. Internal attitudes towards international regulatory pressure for modification of The Bahamas' taxation regime
  4. Free Trade initiatives (WTO & FTAA) and the impact of Globalization on Island Nations
  5. The effects of the above on Bahamian Trust Business

Section 1

  • Clearing up misunderstandings about how tax free jurisdiction like The Bahamas can function

The first offshore operations in the Western Hemisphere were established in The Bahamas in 1936 by British and Canadian interests to provide management services for the investments of wealthy clients. These operations eventually became a wholly owned subsidiary of the National Westminster Bank, which was consolidated into the private banking operations of its parent company.1 Offshore financial centers provide a number of legitimate and important services that can be broadly grouped into 3 categories:

  1. Private Investments, in which investments are managed in order to minimize potential tax liabilities and maximize protection granted under statutory confidentiality provisions;
  2. Asset protection, in which the use of an international jurisdiction separate from the client’s residence allows for the protection of income and assets from political, fiscal and legal risks; and
  3. Estate Planning, in which the administration of assets is done in the most favorable legal and fiscal jurisdiction.2

The various types of financial institutions and/or vehicles that can be used for these services include international business corporations (IBCs), insurance companies, mutual funds and hedge funds, and recent years have seen an explosion in the use of all these vehicles.

While still a British colony (independence having being achieved only in 1973), the House of Assembly in 1960 adopted the following resolution to preserve the status of The Bahamas as a tax-free jurisdiction:

"Resolved that it is the unanimous opinion of this House that it is not in the best interest of the Colony to impose tax on the income or capital gains of any person, company or corporation."3

Fast forward some 44 years and that resolution still stands- The Bahamas is now a sovereign nation with a historically imposed tax structure primarily based on import and excise duties and other non-direct forms of government taxation. It is also obvious that The Bahamas has been a tax-free jurisdiction and offshore financial center long before the creation of the OECD in 1961 or even its precursor organization, the Organization for European Economic Co-operation, formed out of the Marshall Plan in 1948.

Approximately 55 percent of the annual $1 billion in government revenues comes from import and stamp duties. Other major sources of Government revenue are tourism taxes (hotel and departure tax) at 10% of total, stamp tax at 9% and company fees at 7% of total. The basic ad valorem tariff for imported goods is 35%. However, a long list of items have separate rates and many are subject to stamp duties above and beyond import duties:

Item

Import Duty %

Stamp Duty %

Total %

Clothing

25

7

32

Cigarettes

260

7

267

Automobiles

45-75

7

52-82

Personal Computers

0

7

7

Plumbing Supplies

35

7

42

Cement

35

7

42

Lumber

0

7

7

Champagne

0

50

50

Disposable Diapers

0

7

7

Beer

$10 per Gallon

7

N/a

Eggs

15

2

17

Source: Import Duties Made Easy, The Commonwealth of The Bahamas Custom Duties 2003, 2nd Edition

The Bahamas charges an export stamp tax of 4% on most exported goods, however, many tourist items such as liquor, perfume, jewelry and handbags are now duty free.

Perhaps more detrimental to the economy are the stamp duties applied to real estate transactions, which range from 2% to 10% on sales over $250,000. This cost is normally shared between the transacting parties. There is also a 1% stamp duty on mortgages paid fully by the borrower, which reduces the attractiveness of refinancing a mortgage in response to lower interest rates. Finally, stamp tax is levied on all Bahamian currency exchange transactions at a rate of 0.25% (and as such has cost implications for international companies needing to buy local currency for payroll and other operating expenses). While there are no currency exchange controls for non-Bahamian residents, locals wanting to purchase foreign currency for investment purposes (e.g. foreign stock investing, second home etc.) must do so through the Central Bank Investment Dollar program. This program levies a 25% conversion premium, 20% of which is returned to you on repatriation of the proceeds.

In its most recent Article IV Consultation in July 2003, the IMF advised the government that tax reform was necessary to ensure fiscal sustainability. The reliance on a complex system of customs and tourism duties (and sometimes contradictory- computers used to be taxable for businesses but not personal use) increases the vulnerability of tax revenue to cyclical fluctuations and facilitates tax evasion. We will discuss alternatives tax regimes later in this paper.

During the late 1990s, enhanced concerns in the international community with money laundering and tax evasion led to a number of concerted efforts by the OECD to clamp down on offshore financial centers. As we all know, the two principal forums engaged in this attack are the Financial Stability Forum (FSF) and the Financial Action Task Force (FATF). In the new international architecture, increased secrecy or confidentiality is no longer an acceptable option.

In response to this external pressure, in 2000 The Bahamas enacted significant modifications to existing legislation as well as a slew of new laws, 11 in all, to address the identified deficiencies. A major improvement in the eyes of the international community was the banning of anonymous accounts and anonymous ownership of IBCs through bearer shares. In addition, under the Financial Transactions Reporting Act, 2001, by law a trust company must verify the identity of beneficiaries with a vested interest under a trust. In practice, many institutions follow more rigorous standard than those imposed by the legislation because of "Know Your Client" policies set by their head offices in onshore jurisdictions.

Another significant step forward for the jurisdiction was the establishment of a Financial Intelligence Unit and measures taken to improve international cooperation. Collectively, these measures resulted in The Bahamas’ removal from the FATF ‘blacklist’ in June 2001. Anti-money laundering legislation in The Bahamas is now considered to be as advanced as that of any OECD member countries.

Some of the fallout from this legislation can be seen in the following table. The financial services industry in The Bahamas is in a period of consolidation due to regulatory changes and recent global economic weakness. Regulatory changes are increasing the operating costs to achieve compliance with regulatory, anti-money laundering and anti-terrorism matters while a weak global economy for the previous 3 years has reduced the asset-based revenue generated by institutions.

While the number of banks and trust companies have decreased in the past three years, primarily as a result of the requirement for each license holder to maintain a physical presence in The Bahamas, assets held by these institutions as well as overall employment and salaries have increased.

The IBC data for 1999 and 2000 have been adjusted to reflect companies that remained on the records of the registrar but in fact were inactive. Numbers previously reported showed over 100k IBC in 1999 and 2000. This unfortunately provided an incorrect perception of the number of IBCs that left The Bahamas, although the actual decline of active IBCs was still a meaningful 26% in 2001.4 While the IBCs’ contribution to the economy of IBCs can in no way compare to the revenue of Banks and Trust companies, the IBC remains the vehicle of choice by international clients and is therefore still a useful barometer of the overall health of the industry. The Bahamas has seen this number rebound nicely in 2002, hopefully signaling that the worse is behind us.

Snapshot of The Bahamas Financial Services Sector

Area

1999

2000

2001

2002

% chg over 3 yrs

Banks & Trust Companies

 

 

 

 

 

Number

415

410

356

301

(27.47%)

Public

276

268

227

189

(31.5%)

Restricted Non-Active

139

142

129

112

(19.4%)

Licenses Issued

11

13

9

4

 

Licenses Revoked

14

18

63

59

 

Assets

$231 bn

$272 bn

$258 bn

304

31.6%

Employment

4,181

4,460

4,586

4,523

8.18%

Bahamian

3,991

4,223

4,300

4,227

5.91%

Non Bahamian

190

237

286

296

55.79%

Average Salary

 

 

 

 

 

Offshore Sector

$48,874

$53,134

$57,603

$59,758

$22.32%

Domestic Sector

$35,270

$36,619

$36,381

$39,217

11.19%

Annual Expenditure (Local Economy)

$345.4 mi

$409 mi

$432 mi

$396 mi

14.65%

Insurance

 

 

 

 

 

# of Companies

83

80

83

83

 

Assets

$541 million

$620 million

$687 million

N/a

 

Employment

2,000

2,000

3,000

3,000

 

Funds

 

 

 

 

 

# of Funds

637

757

673

706

 

Net Assets

$94.5 billion

$$95.0 billion

$89.4 billion

$97.3 billion

 

Fund Administrators

56

57

58

61

 

Companies

 

 

 

 

 

# of IBCs

51,000+

53,000+

39,000

45,000+

(11.76)

Revenue (Public & Private Sector)

N/a

$114 million

$85 million

N/a

 

Revenue (Public Sector)

17,381

17,247

13,290

18,000

3.56

Domestic

 

 

 

 

 

Revenue

4,522

4,773

3,854

4,907

8.51

% chg in IBC from prior yr

 

3.92

(26.42)

15.38

 

Source: BFSB Report 2003, Bahamas Financial Services Board

Section 2

  • Examining international tax treaties and information exchange initiatives

The Bahamas has signed Mutual Legal Assistance Treaties (MLATs) with the US, Canada and the UK. These include exchange of information provisions but individual financial information is excluded. Since disclosure is limited to criminal matters and tax evasion in one’s home country is not a crime in The Bahamas. These treaties have limited teeth for the new global concerns of the OECD.

US TIEA

In December, The Bahamas enacted the USA Tax Information Exchange Agreement Act, 2003, which authorized the enforcement of the obligations of The Bahamas under the agreement signed with the US in January 2002. This agreement was deemed necessary and unavoidable if The Bahamas was to remain a Qualified Jurisdiction, thus allowing its many offshore banks to enter into Qualified Intermediary Withholding Agreements with the Internal Revenue Service. The Agreement took effect on January 1, 2004 with respect to requests for information made in connection with criminal tax matters, and will be in force from January 1, 2006 with respect to requests for information made in connection with civil tax matters.

The Bahamian government has been adamant that the tax treaty signed with the US was a special, extraordinary case that will not be duplicated with other jurisdictions. On a recent local radio talk show in November, the former Minister of Finance said that the United States was "fully prepared to bring us to our knees" if The Bahamas did not enact the legislation to improve transparency in the financial services industry. However, there is much concern that other OECD nations will come knocking, particularly from the European Union.

What ‘quid quo pro’ did The Bahamas receive for entering such an agreement? Once the Agreement is effective with respect to requests for information made in connection with civil tax matters, (i.e. beginning on January 1, 2006), The Bahamas will be considered part of the "North American area" for purposes of determining whether U.S. taxpayers may deduct expenses incurred in attending conventions, business meetings and seminars.  So a potential blow to the Financial Services industry will at least bring a windfall benefit to the Tourism industry.

Most in the financial community do not see this as a fair trade-off. As a nation without direct taxation, it is not clear what type of information, if any, The Bahamas would ever need to request as part of this "exchange" treaty. Moreover, only three or four hotels in The Bahamas have adequate convention space, limiting the benefits to the wider Bahamian tourism sector. Finally, it is uncertain whether tax deductibility is a material factor considered by corporate planners when deciding where to locate, as opposed to the issues of the quality of the hotel and its facilities, location, convenience and most importantly, cost.

EU Savings Tax Directive

The battle cry against offshore financial centers was sounded by the OECD with its 1998 study entitled "Harmful Tax Competition: An Emerging Global Issue". However, much to the relief of the offshore centers in the Caribbean, the emerging plans for tax information exchange have been dealt a significant blow by recent developments. While information exchange was declared as the ultimate objective of the EU plans for policing tax compliance, the insistence on preserving bank secrecy by Switzerland in particular has led to a temporary exemption from information exchange obligations being granted to Switzerland, Luxembourg, Austria and Belgium- all OECD members. Countries outside the EU participating in the Directive have a choice of applying withholding tax or exchanging information; Switzerland and Guernsey have chosen the withholding tax option.6

In its commitment letter to the principles of information exchange, The Bahamas stated that it would only comply with OECD demands if "those jurisdictions, including OECD member countries and other countries and jurisdictions yet to be identified, that fail either to make equivalent commitments or to satisfy the standards of the 1998 Tax Competition Report, will be the subject of a common framework of defensive countermeasures." First put forth by the Isle of Man, this "level playing field" language was subsequently included by most other jurisdictions. OECD assurances that it would ensure adherence to similar standards by its own member states are now in doubt, and the threatened sanctions for non-member jurisdictions are now politically impossible.

Barbados provides a useful contrast with The Bahamas and indeed with the rest of the Caribbean offshore financial centers with regard to tax treaties (and is a key reason why Oceanic Bank has an office in that country as well). Double taxation treaties have been signed with the US, Canada, UK, Finland, Sweden, Norway, Switzerland, Venezuela, Cuba, Malta and China. It is also a party to the Common External Tariff (CET) of CARICOM (The Bahamas, while a member of CARICOM has not sign on to the CET). Barbados can be classified as a low-tax jurisdiction rather than a tax-free jurisdiction. For non-resident companies, income taxes range from 1% to 2.5%, with withholding taxes on dividends and royalty payments at 15%. There are no capital gains, gift or inheritance taxes. (Interestingly enough, for domestic companies and individuals, the top marginal income tax rate is 36% and 40% respectively, making Barbados as heavily taxed as the domiciles of the clients fleeing to its shores).

What are the benefits of these taxation treaties? The object is to arrange for payments to be made which are allowable deductions against taxable profits in the country of origin, thus reducing the taxable profits. Since there is likely withholding taxes in the remitting country and income taxes in the country of receipt, there is a net advantage to the arrangement as long as the total withholding and income tax paid is less than the tax that would have been levied on the profits in the home country. If a US company paid a dividend to a pure tax-free jurisdiction, the withholding tax assessed will be 30%. However, if there exists a treaty such as with Barbados, that withholding tax is reduced to 15%. Benefits also accrue for the reverse transaction- a remittance from Barbados to a treaty country. Properly structured, a Canadian company can use a Barbados IBC to receive sales income from outside Canada, which is then remitted back to the parent at a 0 – 2.5% tax rate.

Section 3

  • Internal attitudes towards international regulatory pressure for modification of The Bahamas' taxation regime

There is currently much debate in The Bahamas on the need for greater diversification in both its economic and tax base. As the government considers entry in the World Trade organization (WTO) and the Free Trade Agreement of the Americas (FTAA), there is a sense of inevitability that our tax structure must change. As mentioned earlier, some 55 percent of the annual $1 billion in government revenues comes from customs duties and excise taxes. Free trade bodies are putting pressure on The Bahamas to either eliminate or substantially reduce its tariffs and customs duties because these are seen as barriers to the free movement of goods and services.

The IMF has recommended moving to a Value Added Tax (VAT) tax structure. VATs represent important sources of government revenue in most of the world outside of the United States. VATs differ from Sales taxes in that they tax final consumption by imposing taxes on activities along the production chain i.e. the ‘value added’ in each step. Exporters receive rebates equal to the amount of tax paid in the course of producing the export item, while imports are subject to VAT at the same rate as domestically produced goods (which in the case of The Bahamas there are few, so import VAT would just have to be set at a general level).

In October, James Smith, the Minister of State for Finance, dismissed both sales and income taxes as alternative revenue options available to the Bahamian government, saying that their estimates showed both structures would fall short of the $550 million needed to replace custom and stamp duties. Speaking at the local Chamber of Commerce, Mr. Smith stated a Value Added Tax was currently the most likely option for the Government; saying "if designed and implemented properly, a consumption tax such as VAT could generally lower the price level. And any business which currently meets the requirements for business license should, with a little assistance, be put in a position to comply with the requirements of a VAT."6 The VAT rate is expected to be implemented at between 10 and 15 percent, a rate considerably lower than existing customs and stamp duties because it would be levied on a wider range of goods and services. Customs duties would be eliminated, except in special cases determined by the Government for additional revenue (so-called 'Sin Taxes' on items such as tobacco are a good example). Moreover, a large portion of this tax would still be collected at the border by the existing Customs administration since all incoming final stage products would be subject to VAT on entry into the country.

Effective January 1 1997, Barbados introduced a 15 percent VAT on goods and services, eliminating 11 other taxes including consumption tax, stamp duty on imports, luxury tax on goods and hotel and restaurant tax. Of note, excise tax was retained on vehicles, alcoholic beverages, tobacco and petroleum products which are major revenue earners for their government. Like many other VAT jurisdictions, public transportation, medical services, education and financial services were exempted.

Not everyone agrees that VAT is currently feasible for The Bahamas and that it will provide the government with the expected income. To go from a situation in which merchants currently have no infrastructure to track their own value added to one where they are responsible for the collecting and remitting of a portion of the government’s tax revenue is viewed by many as overly complicated and subject to widespread cheating. VAT would not just be collected at docks and other ports of entry, but at every point in the distribution chain by companies using different accounting systems that may produce conflicting numbers for the same transaction.

Others have put forward the notion that there is no need for The Bahamas to change its tax structure at all, arguing that current customs tariffs are not a protectionist barrier to trade supporting any local industries but merely a revenue-raising mechanism. They instead advocate improved collection of the current taxes on the books, especially with regards to property taxes. By his own admission, while introducing a recent Bill to amend the Real Property Tax Act, Mr. Perry Christie, Prime Minister of The Bahamas, stated that the government only received $4,556,397 in taxes from owner occupied properties of the $32,946,343 revenue billed during fiscal year July 2001 – June 2002. Also, given the recent experience of double-digit real estate price appreciation, a new effort is needed by the real property tax office to reassess the existing values that apply to homes especially on the island of New Providence so as to ensure that the real market value of properties is more accurately reflected on the tax register.

If The Bahamas does eventually choose a VAT tax regime, using Barbados as a model, it is generally expected that financial services will either be exempted from paying taxes or possibly even zero-rated to maintain its competitive position in the global arena. Under zero-rating, no tax is charged on the supply of financial services and the service providers are allowed to recoup tax credits for tax expenses incurred in the provision of their services.

Section 4

  • Free Trade Initiatives (WTO, FTAA, CSME) and the impact of Globalization on Island Nations

The Bahamas currently faces negotiation regarding three regional and international trade agreements; the CARICOM Single Market and Economy (CSME), the Free Trade Agreement of the Americas (FTAA) and the World Trade Organization (WTO).

In the 1990s, renewed efforts to achieve greater Caribbean integration created the CSME, which not only envisaged a fully functioning common market, but also the coordination of macroeconomic policies and eventual monetary integration. It is the stance of the Bahamian government that they will not make a decision on CSME until the wishes of the Bahamian people are known, most likely through a referendum of some sorts. There are a number of reasons why The Bahamas will in all likelihood never sign on to this agreement. First, having one of the highest standard of living and salary levels in the Caribbean, The Bahamas is fearful of a flood of lower cost labor if it signs on to any provisions that allow for the free movement of labor (there is already a serious social problem of illegal Haitian migration to The Bahamas). Secondly, given the low level of trade between The Bahamas and the rest of the Caribbean (less than 1% of total trade), a unified currency with the region makes no economic sense. It is far better to retain a dollar peg with our largest trading partner and closest neighbor, the United States. Finally, combined foreign policy with the rest of the Caribbean is not palatable as The Bahamas is perceived to be more pro-American in its stance than many of the more left-of-centre Caribbean nations. One exception is The Bahamas’ growing relationship with Cuba with whom it shares a maritime border.

There is a similar level of discomfort when it comes to joining the FTAA. One of the major stumbling blocks, in the opinion of the Minister of Trade and Industry, is the desire by the US government to have its firms compete on an equal footing for both private and public contract within the FTAA area. Naturally, this provokes local fears of an inability of Bahamian firms to compete with US juggernauts having much greater economies of scale. The Minister was also critical of the trading bloc’s wide definition of what constitutes a ‘developing nation’, which pits large countries like Brazil against ‘micro states’ in the Caribbean. Other contentious topics include rich nations’ refusal to cut agricultural subsidies, disputes over intellectual property rights and the impact on the environment.

New studies on the impact of ten years of NAFTA on Mexico, the blueprint for the wider agreement, have also muted regional enthusiasm for FTAA. The Carnegie Endowment, an independent, Washington based research institute, found that NAFTA had failed to deliver on the promise of higher real wages and reduced income inequality for the working classes in Mexico, despite higher productivity rates. Moreover, recent competition from China has begun to reverse some of the gains that were previously made.

In the absence of progress being made on FTAA, South America’s two largest trading groups, Mercosur and the Andean Group, struck a free trade accord in December. This move links up 10 of the region’s biggest economies and strengthens their negotiating stance as they continue to bargain on the hemispheric trading bloc. The trade agreement between Mercosur and the Andean Community is expected to combine more than 350 million people in a trade group whose combined GNP totals more than $1 trillion.7

In July of 2001, The Bahamas was granted ‘Observer Status’ at the WTO, starting the clock ticking to begin accession negotiations within five years. The Bahamian Government has publicly committed to joining this global trade organization and expects to make its presentation to the trade body by March at the latest. While acknowledging that WTO membership will require the introduction of new Customs codes to The Bahamas' national laws and Customs procedures, government officials nevertheless decided that WTO is in the best interest of The Bahamas.

This sentiment was echoed by the Landfall Business Centre, a local economic and policy think tank, whose members feel that joining the WTO gives The Bahamas allies in a body of rules, which may allow the country to protect itself from further initiatives expected from the OECD. Once again, Barbados can serve as an example for The Bahamas. Having signed on to the WTO in 1994, Barbados has been publicly praised by that body for bringing attention to the special characteristics of countries with small sizes and populations, limited diversification capacity, and high infrastructure and social costs.

Section 5

  • Conclusion: The effects of the above on Bahamian Trust Business

One impact of the OECD initiatives and the new financial landscape has been to speed up the pace of consolidation in the industry. Over the past two years we have witnessed the departure of long established banks such as Lloyds Bank, MeesPierson Private Bank and Fortis Fund Services. The Bank of Butterfield has entered the market through the purchase of two other Bahamian Banks, Thorand Bank and Leopold Joseph. The National Westminster Bank mentioned in the opening section has changed hands 3 times in quick succession, moving from NatWest to Coutts & Co to finally SG Hambros. This appears to be part of a larger retrenchment of the major Canadian and European Banks from their global aspirations, having been burned in their attempts to match the American financial conglomerates in scale and product diversity. Small offshore subsidiaries, which contribute very little to their global bottom lines, yet harbor the potential for compliance or fiduciary embarrassment, are frequently being viewed as no longer worth the risk.

Reflecting global trends (just look at the recently announced merger of JP Morgan Chase and Bank One), consolidation has also occurred in the Bahamian domestic banking sector, most noticeably with the combining of the retail operations of CIBC and Barclays Bank to form First Caribbean Bank. Consolidation in both the offshore and domestic market can be expected to continue in order to achieve greater economies of scale to defray the now greatly increased costs of compliance.

There are those who claim that like Barbados, the future of The Bahamas is to enter into tax treaties with as many countries as it can to remove itself off of everyone’s blacklist. However, given the dominance of the United States to the Bahamian economy, there is little economic benefit to be derived from a taxation treaty with any other country and thus face the risk of scaring off potential clients with the inevitable information exchange provisions that will be embedded. Moreover, there is little rationale for a high tax country to enter a taxation treaty with a zero-tax jurisdiction. Indeed, Barbados is beginning to see the rules of the game change yet again as a substantial number of countries change their laws regarding controlled foreign corporations thereby curtailing the use of offshore jurisdictions.

A key question is who benefits the most from recent events such as the EU Savings Tax Directive. Non-independent European territories such as the Isle of Man, Cayman Islands Netherland Antilles and Bermuda will be under increasing pressure to conform to the agreements made by their respective home countries. The UK tax authorities have in the past year launched an aggressive enforcement campaign targeting not only the usual suspects, i.e. high net-worth individuals, but also aimed at large multinational companies. Increasingly, the traditional distinction between tax minimization and tax evasion is becoming more and more blurred. Should business begin to leave those jurisdictions, does it flow towards the fully independent nation states of the Caribbean, (The Bahamas and Barbados included) back to Switzerland which has the clout to maintain its confidentiality in the face of the demands of the OECD or do the Asian countries and territories of Singapore and Hong Kong, conveniently left off of everyone’s blacklists, reap the rewards?

In many ways the financial services sector in The Bahamas is more globally competitive than before 2000 since marginal players have been forced to exit the market, leaving behind those companies best able to compete on service and innovation rather than low fees. The lawmakers are also responding to the new competitive landscape, recently enacting amendments to the Mutual Funds Act to attract more institutional business and currently reviewing draft legislation for foundations, hybrid companies and purpose trusts. Those companies who provide the best service will be sure to survive and prosper.

Footnotes:

1. Higgins, J. Kevin, 2000, "Offshore Financial Services: An Introduction," The Eastern Caribbean Banker, Vol. 2 (July), pp.7-8

2. E. Suss, O Williams, C. Mendis, "Caribbean Offshore Financial Centers: past, Present, and Possibilities for the Future", IMF Working Paper, 6/26/02

3. A. Gabriella Fraser, "Can the Sir Stafford Sands Model of the Bahamian Economy Survive Today’s Global Economy?" Central bank Working Paper November 2001

4. BFSB Report 2003, Bahamas Financial Services Board

5. Hay, Richard J. "Tax Information Exchange: A rethink, after the EU Savings Tax Directive"

6. The Tribune (local newspaper), 24 October 2003

7. Wall Street Journal, "Mercosur, Andean Group Agree on Trade Pact", December 16, 2003

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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