The Government took action today to prevent creditors from exploiting the poorest countries in the world through the UK courts.
Legislation to make permanent The Debt Relief (Developing Countries) Act 2010 was passed in the House of Commons today. The legislation will stop creditors, including so-called “Vulture Funds”, from using the UK courts to extract harsh and inequitable payments from poor countries for debts that the companies may in some cases have bought for a fraction of the cost.
The Act could save poor countries an estimated £145m over six years.
The original Debt Relief (Developing Countries) Act 2010 was passed in April 2010, temporarily restricting the actions of “Vulture Funds” in the UK. This act had a sunset clause meaning that it was due to expire on 7 June. To prevent Vulture Funds returning to the UK, the Government has passed legislation to make the law permanent.