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Benedek Lewin is able to provide advice to clients of Omnium Corporate Services Limited and to assist them to assess their business and to implement any changes required to comply with Bermuda’s new economic substance legislation.
You can download the OCSL – Economic Substance Bulletin – 2 Aug 2019 here.
Bermuda has various procedures in place for the automatic exchange of information with other jurisdictions, pursuant to the Common Reporting Standard (CRS). The information exchanged is with respect to account holders, and includes the name, address, account number, account balance or value, and various other sensitive financial details relating to an account. Some of the jurisdictions receiving automatic information have a dubious commitment to adhering to the rule of law or human rights standards.
Some people who have financial connections to Bermuda are rightly concerned about sensitive information being filtered back to their home jurisdiction, where the authorities might have less than pure intentions regarding the use of that information.
The CRS regime, allowing blanket automatic disclosure of private information, raises immediate privacy concerns. The Bermuda Constitution provides for freedom from interference with a person’s correspondence, which includes sensitive financial information.
The Constitution only allows for interference with correspondence if it is reasonably required for certain limited purposes, including public order or morality, or protecting the rights and freedoms of others.
It is questionable whether automatic exchange of information with a foreign jurisdiction meets any of these conditions, arguably rendering the entire CRS regime void and unlawful. Even if one of the exceptions allowing interference is engaged, the exchange of information must be “reasonably required”, and it could be open to a concerned party to challenge the exchange of information in the Bermuda courts if there are legitimate human rights concerns in the circumstances of their case.
A challenge could be made by application to the Supreme Court. Given the sensitivities involved, an anonymity order could be obtained to protect the identities of the parties. This is something the Supreme Court has readily provided for in other cases.
In the event of a person suffering adverse effects as a result of information being disclosed under the CRS, substantial damages may be available if it can be shown that the disclosure was in breach of the Bermuda Constitution.
Peter Sanderson is the Head of Litigation at Benedek Lewin Limited. He has had conduct of many cases before the Supreme Court and Court of Appeal concerning constitutional rights, some of which have been reported in international law reports. He is able to advise further on these issues and others engaging privacy concerns and the CRS regime.