International Call to Support and Internationalize the Belgian Law on Vulture Funds

Vulture funds buy public debt from insolvent States at a huge discount, deliberately refuse to participate in debt restructuring efforts, and later try to make profits by suing the debtor States for full repayment of the nominal value of the debt and its interest. As the UN Independent Expert on debt and human rights stated: “vulture fund litigation has come at a significant cost for some States, diverting public funds into questionable forms of debt service, which should better be used for fighting poverty, improving public health care or education, and boost the debtors’ economies”. The profits they obtain are exorbitant: “vulture funds have achieved, on average, recovery rates of some 3 to 20 times their investment, equivalent to returns of 300 to 2,000 per cent.”

The Belgian law implements a key recommendation contained in a resolution of the UN Human Rights Council, which “called upon States to consider implementing legal frameworks curtailing predatory vulture fund activities within their jurisdictions” |1|. But it is currently being challenged by a Cayman Islands-based hedge fund, NML Capital Ltd. (a subsidiary of Elliott Management Corporation funded by the billionaire Paul Singer), before the Constitutional Court of Belgium. This vulture fund is one of the most infamous in the world. It lately won the so-called “trial of the century” in sovereign debt against Argentina in New York. Now it is asking the Belgian Constitutional Court to cancel the Belgian Law. Its aim is to dissuade other States from adopting similar regulations on vulture funds.

We support the Belgian Law on vulture funds and call on other States to adopt similar legislation in order to stop these speculators making huge profits off the back of the ordinary people around the world.