Jersey Evening Post
Further to the leader column in your latest issue entitled 'Keep the Vultures at a distance' it is inevitable that the brevity required in a 400 word column can never capture the real detail behind a story. However, more often than not this column does express what people in the Island are thinking in an insightful, succinct and helpful way, and is certainly the first item I turn to in the JEP.
There is though some detail around the 'Vulture' story which I would like to provide in order that your readers are fully informed.
The term 'Vulture fund' is ugly and many would say it describes an ugly business; a business about which I wrote to the Finance Industry back in 2007, asking colleagues to use their best endeavours to prevent this kind of fund being set up in Jersey. As far as we can establish there are no such funds in Jersey, and by placing this kind of activity on the Jersey Financial Services Commission Sensitive activity list we have made it clear to the world that we do not want this kind of business.
Over the last few years a number of countries including France and the USA have investigated and then given up on introducing laws to limit claims, as definition problems around identifying this kind of activity, whilst safeguarding the ability to enforce legitimate contracts is extremely difficult. The United Kingdom began work on this issue in 2009 and uniquely introduced a law in 2010 with a sunset clause, clearly signalling this was a trial. This was due to the uncertainty as to whether this law could successfully be sustained. On the 8th June 2011 the decision was made to continue with the law and make it a permanent feature of the statute book.
On 15th September 2011 a Green paper was issued by the States of Jersey, which consults on introducing a similar law to the UK. The laws introduced do not stop claims being brought through courts, and there is no legal loophole, as misleadingly reported by the Jubilee Debt campaigners. Access to legal protection and redress is a fundamental human right enshrined in all democracies and we discriminate as to who should have access to these fundamental rights of access at our peril. Instead the legislation introduced by the UK and that which Jersey is consulting on is designed to limit the amount of claims and to facilitate significant discounts to the face value of debt recognising the special circumstances of poorer countries, whilst ensuring legitimate access to the legal process.
However, there are significant risks, to legitimate claims and business. Laws which are rushed are generally not good laws, and can frequently have significant unintended consequences. A consequence of such a law, if not very carefully drafted, could be to incentivise corrupt politicians and governments of poorer nations to shift assets to Jersey, simply to limit or defeat their legitimate obligations to repay loans made on reasonable terms. We do not want to become a safe harbour for the corrupt and unscrupulous.
As far as we can tell there is no imminent hearing of the case involving the DRC (Democratic Republic of Congo) by the Privy Council, but laws in Jersey cannot be placed onto the statute book in an instant. Should the States of Jersey seek to emulate the UK law, there would still be a requirement for approval by the Privy Council in the UK which can take upto six months. In addition Jersey firms will wish to scrutinise any law which effectively involves interfering with the law of contract most carefully, our reputation and integrity as a respected international finance centre demands nothing less than a thorough review.
In a career spanning over thirty years in financial services, which has taken me across the globe, I have discovered no jurisdiction that has such a commitment to truth, transparency and integrity as Jersey. Our reputation is everything, we guard it jealously, and defend it vigorously. If we can act to assist those who are less well off whilst upholding the principles of international law, we will, and as quickly as we can.
CEO Jersey Finance
Sir Walter Raleigh House
48 – 50 Esplanade