BACKGROUND NOTES of BERMUDA

BACKGROUND NOTES of Bermuda

• U.S.-BERMUDA RELATIONS

As a British Independent Overseas Territory, Bermuda enjoys significant autonomy. It has, for example, its own elected government and its own currency. U.S. policy toward the United Kingdom, which is responsible for the island’s defense, security, and foreign relations, is the basis of U.S.-Bermuda relations. In 1988, the U.S. and the United Kingdom entered into a Tax Information Exchange Agreement with respect to Bermuda, which authorizes the exchange of information for tax purposes. In 2009, the U.S. and the government of Bermuda signed a Mutual Legal Assistance Treaty authorizing authorities in the U.S. and Bermuda to request and obtain assistance from each other in criminal investigations and prosecutions and related administrative and other proceedings. The treaty also provides for cooperation in combating a wide variety of crimes, including economic crimes and money laundering, by facilitating the collection of evidence needed by authorities in one country but located within the other country. In 2013, the U.S. and Bermuda signed an agreement for cooperation to facilitate the implementation of the Foreign Account Tax Compliance Act. The U.S. Coast Guard provides search and rescue assistance to Bermuda as needed.

• U.S. Assistance to Bermuda

• The United States provides no foreign assistance to Bermuda.

• Bilateral Economic Relations

The United States is critical to Bermuda's economy. As the island’s closest geographical neighbor, the U.S. is also its principal trading partner and the source of more than 80% of its visitors. With the decline of tourism in recent years, the economy is based primarily on international business, and the island is an important regional and global offshore financial center. Insurance and reinsurance firms based in Bermuda write significant volumes of business in the United States, and a large number of American-owned businesses are incorporated in Bermuda. An estimated 8,000 U.S. citizens live in Bermuda, many of them employed in the international business community.

Bermuda’s currency, the Bermuda dollar, is pegged one-to-one to the U.S. dollar. The U.S. Securities and Exchange Commission recognizes the Bermuda Stock Exchange as a “Designated Offshore Securities Market.” Areas of opportunity for U.S. investment, in addition to the insurance, reinsurance, and financial services industries, include the government sector. In an effort to reduce government spending in the island’s struggling economy, in early 2014 the government announced plans to privatize, mutualize (a form of privatization in which employees are shareholders), and/or outsource non-core government functions. It also stated it would seek private partners to help fund infrastructure projects, including redevelopment of the airport. There may also be opportunities in tourism but to a more limited extent.

• Bermuda's Membership in International Organizations

The United Kingdom is formally responsible for Bermuda's foreign and defense policy.

• Bilateral Representation

The U.S. Consul General in Bermuda is Robert Settje; other principal officials are listed in the Department's Key Officers List.

The United Kingdom's embassy in the United States is at 3100 Massachusetts Avenue, NW, Washington, DC 20008; tel: 202-588-6500. The government of Bermuda has offices in the United States at 325 7th St. NW, Washington, DC 20004.