Treasury is to progress new legislation to prevent the Isle of Man from being used by so-called ‘vulture funds’, Minister Eddie Teare MHK announced today (Friday February 3, 2012).
The move follows recent agreement by the Council of Ministers that the Island should introduce its own legislation equivalent to the UK Debt Relief (Developing Countries) Act 2010. The Act seeks to prevent businesses known as ‘vulture funds’ from buying up the debts of Heavily Indebted Poor Countries (HIPCs) for a fraction of their original price and then using the UK courts to sue for the full value of the debt, plus interest. The legislation seeks to outlaw a practice that undermines international debt relief efforts.
The law was introduced in response to a joint initiative between the IMF and World Bank to provide debt relief to HIPCs which qualify for cancellation of most debts to the World Bank, IMF and the governments of rich countries. Prior to the introduction of the Act some debts fell outside the scope of the original initiative.
Minister Teare explained: ‘We have no evidence of vulture fund activity in the Isle of Man and as an internationally responsible country we do not want it here. The Manx Government is happy to introduce legislation to ensure that our Island is not used for the disreputable business of exploiting Heavily Indebted Poor Countries.’
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