Sally Keeble (Lab, Northampton North) introducing her Bill said it would "regulate the recovery of the defaulted sovereign debt of developing countries", she said. Its aim was to attack vulture funds operated by financial institutions which profiteered from poor countries' debt.
"The Bill is aimed directly at those companies and funds that buy up defaulted sovereign debt at highly discounted prices, then try to recover the full amount, plus costs and fees, through the courts—often, unfortunately, through the UK courts", she said.
Keeble also said that the Bill would address the secrecy of tax havens in which the funds were often tied up.
She provided specific examples of the operation of vulture funds, by a company called Donegal International Ltd which was operating in
Keeble outlined the Bill's provisions: firstly, to stop financial institutions and companies from buying up developing countries’ debts at "cut-rate prices".
Secondly, introducing accountability of financial institutions through greater reporting requirements.
Thirdly, requiring that financial institutions disclose the beneficiaries of the recovery proceedings; and fourthly, stipulating anti-corruption measures that would "require a vulture fund to declare any payments or gifts".
The Bill was agreed to be read a second time on Friday June 12.
Dods Parliamentary Communications Ltd