News

With all-party support, Britain's House of Commons adopted a law to put an end to "vulture funds" that buy up highly discounted claims on indebted poor countries and then use British courts to obtain full reimbursement plus penalties. In several cases, heavily indebted poor countries that have received debt cancellation from the IFIs and donor countries have had to pay monies intended for providing basic public services to such vulture funds. The bill was adopted in the last sittings of the Commons before next month's general election and has now passed through the upper chamber to be made into law.



UNI Global Union Vulture Fund Report dedicates a chapter to this topic. This is a great outcome for financial regulation in the UK.



To read more:

http://www.guardian.co.uk/politics/2010/apr/11/vulture-funds-banned-uk-courts





http://www.guardian.co.uk/business/2010/apr/08/vulture-funds-developing-nations-debt



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Below is a press release issued by the Jubilee Debt Campaign (UK).

(Supported by UK Trade Union Council)



JUBILEE DEBT CAMPAIGN



7 APRIL 2010



Vulture Funds Bill passes Commons

Bill to stop 'Third World Debt' profiteering on track to become law this week



A landmark bill to protect the poorest countries in the world from profiteering by so-called vulture funds (1) passed its third reading in the House of Commons today.



Jubilee Debt Campaign (2) welcomed the successful passage of the Debt Relief (Developing Countries) Bill (3), which is expected to be fast-tracked through the House of Lords tomorrow as part of the 'wash-up' at the end of the Parliamentary session.



There was an outcry last month after the bill was blocked at third reading by an unidentified Conservative MP - thought to be backbencher Christopher Chope. Today the Government pushed the bill forward as part of their 'wash-up' package of legislation before the General Election, and all major parties supported its passage. The bill is a Private Member's Bill, proposed by Andrew Gwynne MP, and it is unusual for such Bills to pass through 'wash-up' in this way.



International support for the bill, the first of its kind in the world, has been expressed by Archbishop Desmond Tutu, President Ellen Johnson Sirleaf of Liberia, and President Bharrat Jagdeo of Guyana.



Nick Dearden, Director of Jubilee Debt Campaign, said:

"We are delighted that the Government has brought the Vultures Fund Bill back from the dead, and that cross-party support for the bill has been reaffirmed. If this bill becomes law tomorrow, it will stop these unethical investment funds from using British courts to profit from poverty. Right across the least developed countries, people are watching the British Parliament to see if they will be the first to end this activity. We pay tribute to the MPs who have put such enormous amounts of time into ensuring this important bill becomes law."





Notes for editors



(1) Vulture Funds are private investment companies which take advantage of the relaxed laws in British courts to buy up Third World debt at dramatically reduced prices and sue poor countries for their full value plus costs. In the process, companies make excessive rates of profit.



(2) Jubilee Debt Campaign is a UK coalition demanding 100% cancellation of unpayable and illegitimate developing country debts. For more information see www.jubileedebtcampaign.org.uk.



(3) The Debt Relief (Developing Countries) Bill is a Private Member's Bill sponsored by Andrew Gwynne MP. Owing to Mr Gwynne's illness, Sally Keeble has steered the bill through the House of Commons. It was objected to at Third Reading on 12 March, http://services.parliament.uk/bills/2009-10/debtreliefdevelopingcountries.html.