Vulture Funds

Treasury written statement – made at on 10 May 2007.

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Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I deplore the activities of so-called vulture funds that seek to profit from debts owed by the poorest countries in the world. I am determined to limit the damage done by such funds. The UK will therefore:

call on the World Bank to make the IDA Debt Reduction Facility available to HIPC countries before they reach decision point, in order to help countries to eliminate their commercial debts at the earliest possible opportunity and thereby reduce the likelihood of debts being sold on to aggressive creditors; stand ready to scale up our contribution to the Debt Reduction Facility in support of this policy change; take forward talks with leading commercial creditors on a voluntary code of conduct that will set out the actions that responsible creditors should take to help reduce the risk of litigation, including the requirement to participate in collective action to reduce unsustainable debts; work with our G8 partners to develop a Charter on Responsible Lending that includes a commitment to protect developing countries from vulture fund activity; work to ensure that HIPCs have access to the legal assistance they need to defend themselves against litigation, including by supporting proposals at the African Development Bank to develop a Legal Assistance Facility to help countries facing legal action gain access to technical and legal support; continue to strengthen debt management capacity amongst HIPCs.

I will also take forward discussions with my international partners on this issue, including at the G8 Finance Ministers' summit in Potsdam.