Overview

The Debt Relief (Developing Countries) Act 2010 aimed to support the reduction of debts owed by certain developing countries, aligning UK law with international initiatives like the Heavily Indebted Poor Countries (HIPC) Initiative.

Description

This Act modified the amount recoverable on debts incurred by qualifying developing countries before the Act's commencement. "Qualifying debt" is defined as public or publicly guaranteed external debt of countries participating in or potentially eligible for the HIPC Initiative, incurred before a "decision point" (as defined by the Initiative) is reached for that country. The Act reduced the amount recoverable to a "relevant proportion" of the original debt. For countries under the HIPC Initiative, this proportion was based on the Initiative's debt reduction plan. For potentially eligible countries, it was set at 33%. The Act also addressed judgments and arbitration awards related to qualifying debts, ensuring that these reflect the reduced recoverable amounts, except where this would increase the existing amount. Exceptions were made for cases where debtors failed to offer comparable debt relief terms, and for overriding EU or international obligations requiring full debt enforcement.

Key Definitions:

• Qualifying Debt: Public or publicly guaranteed external debt of eligible countries incurred before a decision point.
• Relevant Proportion: The percentage of the debt recoverable, varying based on the country's participation in the HIPC Initiative (or 33% for potentially eligible countries).
• Decision Point: The point at which a country's eligibility for debt relief under the HIPC Initiative is determined.

Government Spending

The Act did not directly involve new government spending. Instead, it reduced the amount of debt recoverable by the UK government from qualifying developing countries, effectively providing debt relief. Specific figures for debt reduction weren't included in the Act itself.

Groups Affected

• Developing Countries: Received debt relief, potentially freeing up resources for development and poverty reduction.
• UK Government: Experienced a reduction in potential debt recovery.
• Creditors: Faced reduced potential recoveries on qualifying debts.
• UK Courts and Tribunals: Required to apply the Act's provisions when dealing with relevant claims.

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