The Heavily Indebted Poor Countries (Limitation on Debt Recovery) Act 2012 prevents vulture funds from buying up poor nations’ debts for a fraction of their original amount and then using the courts to sue for the full value, plus interest and penalty charges.
Isle of Man treasury minister Eddie Teare said the move sent a clear message that the Isle of Man was a well-regulated, transparent and co-operative country.
Mr Teare said: “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. This legislation will ensure our Island is not used for the disreputable business of exploiting heavily indebted poor countries.”
The new law, which is equivalent to the UK Debt Relief (Developing Countries) Act 2010, supports an international initiative to provide debt relief to heavily indebted low income countries.
The IMF and World Bank estimate that vulture funds are seeking total claims of $1.47bn from countries including Cameroon, Ethiopia, Sudan, Uganda, and the Democratic Republic of Congo.
