15 September 2011
The Chief Minister’s Department has launched a consultation seeking views on whether Jersey should limit practices that could undermine international debt relief efforts.
The consultation green paper (R.114/2011) refers to the practices of companies, often known as ‘vulture funds’, that buy sovereign debt at a substantial discount on the open market before going on to pursue private legal actions against the poorer country to recover the full sum.
Last year, the UK Government temporarily enacted the Debt Relief (Developing Countries) Act 2010, which limits the proportion of a sovereign debt that any commercial creditor can reclaim through litigation under UK law. In May 2011, the act was made permanent.
Chief Minister, Senator Terry Le Sueur, said: "The UK Government has, uniquely, put legislation in place to limit the sums that can be recovered through its courts by legal actions of so-called vulture funds. A recent case in the Royal Court has highlighted the question of whether Jersey should consider introducing its own legislation on this matter. We welcome the views of everyone and we appreciate the undertaking of the UK Government to share its expertise in this matter."
The closing date for responses to the consultation is 8 December 2011.
Debt Relief consultation (government and administration section)