Speaker: Lord Sassoon of Ashley Park
Date: 06 October 2015
Venue: Guildhall, Gresham Street, City of London, EC2V 7HH
Time: 12.30pm till 2.30pm
Chair: Robert S. Childs, Chairman of The Bermuda Society and Chairman of Hiscox
Lord Sassoon became an executive director of Jardine Matheson Holdings and of Matheson & Co. Limited, and a director of Jardine Lloyd Thompson in 2013 – he is a former Treasury Minister – appointed the first Commercial Secretary to the Treasury in May 2010 and appointed to the House of Lords in the same year.
Synopsis of Lord Sassoon’s speech
Lord Sassoon explained that he had interacted with Bermuda in three roles over the past twelve years, first as an HM Treasury official and Minister, second as President of the Financial Action Task Force (the global anti-money laundering and counter-terrorist financing organisation) and third as an executive director of Jardine Matheson and non-executive director of Jardine Lloyd Thompson for the past three years.
When he started as a Treasury official in late 2002, the Treasury’s focus within financial services was on the collapse of Equitable Life, post-9/11 resilience concerns and the Euro decision. There was some concern about the consequences for the UK of a significant reinsurance failure company in Bermuda, but the concern was substantially born out of ignorance of the capacity of the BMA.
While the market’s handling of Hurricane Katrina in 2005, with its insured losses of $71bn, provided some reassurance, it was only with the appointment of Matthew Elderfield and then the 2009 Foot report into the British offshore financial centres, that London began to get a proper feel for the regulatory landscape in Bermuda. Most important, has been the job done under the leadership of Jeremy Cox to build its capacity – and its international reputation in recent years.
The culmination of this regulatory success story for Bermuda should be full recognition of equivalence for Bermuda by the EU under Solvency II before the end of 2015.
That said, it is sad to see examples of continuing ignorance and prejudice about aspects of Bermuda’s financial system. One clear current example is the EU tax blacklist story which surfaced in the FT in June. It turned out that the EU list of non-cooperative tax jurisdictions had been cobbled together from individual country submissions rather than being based on any objective analysis.
Bermuda was not listed by countries including France, Germany, the Netherlands, Ireland, and Sweden. And of those countries who had listed Bermuda as non-cooperative, Poland immediately retracted and it turned out that Bermuda did not appear on Italy’s own blacklist. As the OECD concluded, Bermuda is largely compliant – but the FT story remains on the internet.
The second example is around the misconceptions with how Bermuda does or does not comply with what No10 wants to see under its beneficial ownership transparency initiative. The issues were very clearly dealt with by Bob Richards in his speech to the Bermuda Society dinner in November 2014 but London’s handling of Bermuda on this issue has been poor.
Bermuda’s progress towards compliance with international standards on antimoney laundering (AML) and counter-terrorist financing has been slower than in other areas – but Bermuda is now almost where it needs to be. Lord Sassoon’s first visit to Bermuda was to follow up on the 2007/8 Financial Action Task Force evaluation of Bermuda, which had not rated Bermuda at all highly, in an attempt to convince Premier Ewart Brown that progress needed to be made. Thanks to the leadership of Paula Cox and Jeremy Cox, substantial progress has now been made to improve Bermuda’s AML regime.
Lord Sassoon went on to summarise the Jardine Group’s very positive experience in Bermuda since moving the domicile of the group’s main holding companies to Bermuda from Hong Kong starting in 1984.
In the early 1980s, Jardines was looking at a number of possible jurisdictions for its domicile. The story is that what swung it for Bermuda is that the Jardines Chairman was caught in a rainstorm in Hamilton when he was on a fact-finding visit. At that moment Sir John Swan came past in his car, wound down the window and offered the chairman a lift. That is characteristic of the welcome we have always found.
Whether in the Jardines’ business relationship with the Gibbons family or in other ways, such as bringing a touch of Scotland to Bermuda each St Andrew’s Day, Jardines continues to feel entirely at home on the island. That said, the impending retirement of John Lang and his replacement as Jardines’ representative in Bermuda by Phil Barnes marks the end of an era.
Given Jardines’ positive experience of Bermuda, the fact that all the redomiciling Chinese companies are heading to the Caribbean feels like a lost opportunity. That said, Lord Sassoon ended on an optimistic note, citing the new airport development, the two or three hotel developments, the easing of restrictions on foreign workers and, of course, the America’s Cup.
Lord Sassoon of Ashley Park
06 October 2015