10 November 2017
Reporter: Stephanie Palmer

Captives dragged into Paradise Papers furore

The captive insurance industry has for the first time been implicated in the so-called Paradise Papers.

Micky Arison, chair of cruise ship operator Carnival Corporation and managing general partner of basketball team Miami HEAT, was identified in one of the leaked documents as a director of Bermuda-based captive insurer Trident Insurance Company.

Arison has come under fire, with sceptics suggesting that Carnival is using the captive as a means to lower its tax bill.

The Bermuda Business Development Agency (BDA) has since released a video in response to the Paradise Papers, saying: “Bermuda is a world leader in global compliance and tax transparency, in fact Bermuda actively participates in over 100 international treaty partnerships promoting info sharing.”

It went on: “Bermuda is no place to hide money. We strictly enforce rules to report financial information and share this with global tax authorities.”

The video then reinforced that the domicile is “transparent, cooperative [and] compliant”.

In 2015, Trident was inducted into Bermuda’s Captive Hall of Fame.

The Paradise Papers are a set of documents originally leaked to a German newspaper, which detail confidential information about wealthy individuals and companies allegedly using legal loopholes to move assets to offshore domiciles.

Although the majority of the schemes are legal, high-profile public figures and brands including the British royal family, Apple and Formula 1 driver Lewis Hamilton have since been accused of tax avoidance.

Some of the domiciles in question are prominent captive insurance hubs.

Neither Carnival nor Trident have responded to a request for comment. The BDA has also not responded regarding the captive industry specifically.

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