The legislation builds on the success of Andrew’s own Private Members Bill which became law in the United Kingdom in 2010.
The Debt Relief (Developing Countries) Act, as it became, received Royal Assent in March 2010 after the Labour Government used the ‘mop up’ procedure to get it through the legislative process before the impending General Election. The law, which had been subject to a 12 month sunset clause, was later made permanent by the current government after it had been assessed to have been successful in its first year in operation.
Andrew’s Act, and now the decision of the bailiwick of Jersey, brings to an end the practice of “Vulture Fund” investment companies aggressively pursuing the poorest countries in the world for historic debts that had been written off by the international community.
However, the 2010 Act only covers the United Kingdom courts and not those of British Overseas Territories or Crown Dependencies. Before the decision of Jersey to adopt the Debt Relief (Developing Countries) Act measures into its own laws, the loophole meant “Vulture Funds” were using the bailiwick of Jersey courts to pursue their claims.
Previously a US vulture fund, FG Hemisphere, tried to sue the Democratic Republic of Congo for $100 million in the Jersey courts on a debt it bought for just $3 million. However, in July 2012 the UK Privy Council ruled that the money the vulture fund was trying to seize could not be claimed against a government debt.
Andrew Gwynne MP for Denton and Reddish said:
“I was very proud when my private members bill became law and stopped these vulture funds operating in the UK courts. That’s why I am so pleased that Jersey have now followed suit. It is to the credit of both legislatures and the efforts of the Jubilee Debt Campaign that vulture funds can no longer operate in these parts of the British Isles. I similarly hope other Crown Dependencies and British Overseas Territories will follow suit.”
“These are the first laws in the world to deal with Vulture Funds and I eventually hope – and expect – other countries beyond British domestic and overseas jurisdictions will follow our lead and clamp down on these unscrupulous capitalists.”
The British Treasury estimates that Andrew’s Bill – now the Debt Relief (Developing Countries) Act 2010 will save the 40 most impoverished countries in the world over £145 million in the six years from its enactment.