I 
111TH CONGRESS 
1ST SESSION H. R. 2932 
To prevent speculation and profiteering in the defaulted debt of certain 
poor countries, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 18, 2009 
Ms. WATERS (for herself, Mr. CONYERS, Mr. BACHUS, Ms. MOORE of Wis-
consin, Mr. PAYNE, Mr. MEEKS of New York, Mr. GUTIERREZ, Ms. 
WASSERMAN SCHULTZ, Ms. SCHAKOWSKY, Ms. LEE of California, Mr. 
HINCHEY, and Ms. NORTON) introduced the following bill; which was re-
ferred to the Committee on the Judiciary, and in addition to the Com-
mittee on Financial Services, for a period to be subsequently determined 
by the Speaker, in each case for consideration of such provisions as fall 
within the jurisdiction of the committee concerned 
A BILL 
To prevent speculation and profiteering in the defaulted debt 
of certain poor countries, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Stop Very Unscrupu-
lous Loan Transfers from Underprivileged countries to 
Rich, Exploitive Funds Act’’ or the ‘‘Stop VULTURE 
Funds Act’’. 
VerDate Nov 24 2008 
04:41 Jun 19, 2009
Jkt 079200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H2932.IH
H2932
tjames on PRODPC75 with BILLS
SEC. 2. FINDINGS. 
The Congress finds the following: 
(1) Many poor countries have been struggling 
under the burden of international debts for many 
years. 
(2) In 1996, the international community cre-
ated the Heavily Indebted Poor Countries Initiative 
(the HIPC Initiative) to reduce the debt burden that 
curtailed spending on economic development and 
poverty-reducing programs in many impoverished 
countries. 
(3) Since adoption of the original HIPC Initia-
tive in 1996 and the Enhanced HIPC Initiative in 
1999, donor countries have committed more than 
$50,000,000,000 in bilateral and multilateral debt 
cancellation to eligible countries. 
(4) Congress has demonstrated its support for 
bilateral and multilateral debt relief through the en-
actment of comprehensive debt relief initiatives for 
heavily indebted poor countries in— 
(A) title V of H.R. 3425 of the 106th Con-
gress, as enacted into law by section 1000(a)(5) 
of the Act, entitled ‘‘An Act making consoli-
dated appropriations for the fiscal year ending 
September 30, 2000, and for other purposes.’’, 
approved November 29, 1999 (Public Law 106– 
VerDate Nov 24 2008 
04:41 Jun 19, 2009
Jkt 079200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H2932.IH
H2932
tjames on PRODPC75 with BILLS
113; 113 Stat. 1501–311) and the amendments 
made by such title; 
(B) title II of H.R. 5526 of the 106th 
Congress, as enacted into law by section 101(a) 
of the Act, entitled ‘‘An Act making appropria-
tions for foreign operations, export financing, 
and related programs for the fiscal year ending 
September 30, 2001, and for other purposes.’’, 
approved November 6, 2000 (Public Law 106– 
429; 114 Stat. 1900A–5); and 
(C) title V of the United States Leadership 
Against HIV/AIDS, Tuberculosis, and Malaria 
Act of 2003 (Public Law 108–25; 117 Stat. 
747) and the amendment made by such title. 
(5) A number of countries, including the United 
States, have canceled 100 percent of the bilateral 
loans made by such countries to countries that are 
eligible for debt relief under the Enhanced HIPC 
Initiative, and other major donor nations have can-
celed a large percentage of such loans. However, a 
number of countries eligible for such debt relief will 
continue to owe substantial debts to international fi-
nancial institutions such as the International Mone-
tary Fund, the International Development Associa-
tion, and the African Development Fund. 
VerDate Nov 24 2008 
04:41 Jun 19, 2009
Jkt 079200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H2932.IH
H2932
tjames on PRODPC75 with BILLS
(6) At the same time that the international 
community has been extending debt relief to the 
poor countries of the world, a new form of business 
has emerged for the purpose of speculating in and 
profiteering from defaulted sovereign debt at the ex-
pense of both the impoverished citizens of the poor 
nations and the taxpayers of the world who have 
participated in international debt relief. 
(7) So-called ‘‘vulture’’ creditors acquire, either 
by purchase, assignment, or some other form of 
transaction, the defaulted obligations of, and some-
times actual court judgments against, impoverished 
nations. Vulture creditors usually acquire the debt 
for the payment of a sum far less than the face 
value of the defaulted obligation. They do so for the 
sole purpose of collecting through litigation, seizure 
of assets, political pressure, or other means, pref-
erential payment of the defaulted debt on terms and 
in amounts far in excess of the amount paid by the 
vulture creditor to acquire the debt. The vulture 
creditors seek payments far in excess of the rates of 
payment made to other similarly situated creditors, 
including multilateral creditors (such as the Inter-
national Monetary Fund, the International Develop-
ment Association, and the African Development 
VerDate Nov 24 2008 
04:41 Jun 19, 2009
Jkt 079200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H2932.IH
H2932
tjames on PRODPC75 with BILLS
Fund), bilateral official creditors such as those 
working through the Paris Club of Official Creditors 
or direct negotiations, or commercial creditors work-
ing through the London Club mechanism of sov-
ereign debt restructuring. 
(8) Profiteering in defaulted sovereign debt is 
made possible by the absence of the same type of 
bankruptcy protections for sovereign debtors that 
are available to private debtors. Bankruptcy or other 
insolvency laws protect private debtors through, 
among other things, stays of execution pending reor-
ganization or restructuring of debt, suspension of 
the accrual of interest, ‘‘cram-down’’ powers which 
allow the majority of creditors to force so-called 
‘‘hold-out’’ creditors to accept a debt restructuring 
that will optimize the recovery of all creditors and 
avoid preferential payments to a minority of credi-
tors, and the ability to discharge debts and obliga-
tions as part of a debt restructuring process. 
(9) Preferential payments to vulture creditor 
holders of the defaulted sovereign debt of poor coun-
tries serve to transfer the benefits of international 
debt relief efforts from their intended beneficiaries, 
the citizens of the poor nations of the world, to the 
speculators in sovereign debt who can experience ex-
VerDate Nov 24 2008 
04:41 Jun 19, 2009
Jkt 079200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H2932.IH
H2932
tjames on PRODPC75 with BILLS
orbitant and usurious rates of return on their specu-
lation. 
(10) In pursuit of their collection activities, vul-
ture creditors have engaged in litigation in the 
courts of the United States, which has, and con-
tinues to have, a negative effect on the foreign rela-
tions of the United States, and hinders trade be-
tween the United States and the poor countries 
whose defaulted debts have been acquired by vulture 
creditors. Such disruptive activities have included, 
among other actions, attempting to levy against the 
embassies of foreign states, seeking to have foreign 
states held in contempt of court, issuing subpoenas 
to visiting foreign dignitaries, and accusing foreign 
governments of violating the Racketeer Influenced 
and Corrupt Organizations Act. 
(11) Many vulture creditor holders of defaulted 
sovereign debt act through ‘‘offshore’’ entities, incor-
porated in foreign states, despite being substantially 
owned and operated by United States citizens or 
conducting substantial business in the United 
States, with the purpose of avoiding regulation and 
taxation of their activities in the United States. 
(12) The direct or indirect speculation and 
profiteering in defaulted sovereign debt by United 
VerDate Nov 24 2008 
04:41 Jun 19, 2009
Jkt 079200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H2932.IH
H2932
tjames on PRODPC75 with BILLS
States citizens, and the use of the courts in the 
United States to advance such profiteering, is con-
trary to the foreign relations interests of the United 
States and negatively affects the interstate com-
merce of the United States. 
(13) In order to successfully prevent the specu-
lation and profiteering in the defaulted sovereign 
debt of poor countries in a uniform fashion, and pre-
vent the use of the courts of the United States to 
assist in such profiteering, national legislation is re-
quired to regulate the practices and procedures used 
in litigation against foreign sovereigns. 
(14) To be effective and properly regulate the 
use of judicial forums in an area affecting the for-
eign relations of the United States, national legisla-
tion is required that will mandate the public disclo-
sure of relevant information concerning the acquisi-
tion, ownership, and consideration provided by credi-
tors in obtaining their property interests in the de-
faulted sovereign debt of poor countries. 
SEC. 3. DEFINITIONS. 
In this Act: 
(1) VULTURE CREDITOR.—The term ‘‘vulture 
creditor’’ means any person who directly or indi-
rectly acquires defaulted sovereign debt at a dis-
VerDate Nov 24 2008 
04:41 Jun 19, 2009
Jkt 079200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H2932.IH
H2932
tjames on PRODPC75 with BILLS
count to the face value of the obligation so acquired, 
except that the term does not include the Govern-
ment of the United States or any agency of the Gov-
ernment of the United States, any foreign state, or 
any international financial institution (as defined in 
section 1701(c)(2) of the International Financial In-
stitutions Act). 
(2) SOVEREIGN
DEBT.—The term ‘‘sovereign 
debt’’ means a commercial obligation of a foreign 
state, whether evidenced by a claim, contract, note, 
negotiable instrument, award, or judgment. 
(3) DEFAULTED SOVEREIGN DEBT.—The term 
‘‘defaulted sovereign debt’’ means any sovereign debt 
for which payment has been refused by a foreign 
state, which is subject to an announced moratorium, 
upon which an award or judgement has been en-
tered, or upon which a payment of interest or prin-
cipal has not been paid according to the terms of the 
debt obligation. 
(4) SOVEREIGN
DEBT
PROFITEERING.—The 
term ‘‘sovereign debt profiteering’’ means any act by 
a vulture creditor seeking, directly or indirectly, the 
payment of part or all of defaulted sovereign debt of 
a qualified poor country, in an amount that exceeds 
the total amount paid by the vulture creditor to ac-
VerDate Nov 24 2008 
04:41 Jun 19, 2009
Jkt 079200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H2932.IH
H2932
tjames on PRODPC75 with BILLS
quire the interest of the vulture creditor in the de-
faulted sovereign debt (excluding any amount paid 
for attorneys’ fees or other fees and costs associated 
with collection), plus 6 percent simple interest per 
year on the total amount, calculated from the date 
the defaulted sovereign debt was so acquired, but 
the term does not include the purchase or sale of 
such a debt, or the acceptance of a payment in satis-
faction of the debt obligation, without threat of, or 
recourse to, litigation. 
(5) 
UNITED
STATES
PERSON.—The 
term 
‘‘United States person’’ means— 
(A) a national of the United States (as de-
fined in section 101(a)(22) of the Immigration 
and Nationality Act); and 
(B) a corporation, partnership, association, 
joint stock company, business trust, unincor-
porated organization, or sole proprietorship that 
is— 
(i) organized under the laws of the 
United States or of any political subdivi-
sion thereof; or 
(ii) owned or controlled by a citizen or 
resident of the United States. 
VerDate Nov 24 2008 
04:41 Jun 19, 2009
Jkt 079200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H2932.IH
H2932
tjames on PRODPC75 with BILLS
(6) FOREIGN STATE.—The term ‘‘foreign state’’ 
includes a political subdivision of a foreign state, or 
an agency or instrumentality of a foreign state (as 
defined in paragraph (7)). 
(7) AGENCY OR INSTRUMENTALITY OF A FOR-
EIGN STATE.—The term ‘‘agency or instrumentality 
of a foreign state’’ means an entity— 
(A) which is a separate legal person, cor-
porate or otherwise; 
(B) which is an organ of a foreign state or 
political subdivision thereof, or a majority of 
whose shares or other ownership interest is 
owned by a foreign state or political subdivision 
thereof; and 
(C) which is neither a citizen of a State of 
the United States (as defined in section 1332 
(c) and (e) of title 28, United States Code), nor 
created under the laws of any third country. 
(8) 
UNITED
STATES.—The 
term 
‘‘United 
States’’ includes all territory and waters, continental 
or insular, subject to the jurisdiction of the United 
States. 
(9) QUALIFIED
POOR
COUNTRY.—The term 
‘‘qualified poor country’’ means a foreign state iden-
VerDate Nov 24 2008 
04:41 Jun 19, 2009
Jkt 079200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H2932.IH
H2932
tjames on PRODPC75 with BILLS
tified on the list maintained by the Secretary of the 
Treasury under section 6(a)(2). 
SEC. 4. PROHIBITIONS ON SOVEREIGN DEBT PROFIT-
EERING; PENALTIES. 
(a) PROHIBITIONS.—It shall be unlawful for any 
United States person, directly or indirectly, to engage in 
sovereign debt profiteering, or for any person, directly or 
indirectly, to engage in sovereign debt profiteering in the 
United States. 
(b) PENALTIES.—Whoever willfully violates sub-
section (a) shall be fined an amount equal to the total 
amount sought by the person through the sovereign debt 
profiteering. 
(c) EFFECTIVE DATE.—This section shall take effect 
90 days after the date of the enactment of this Act. 
SEC. 5. PROHIBITION ON USE OF COURTS OF THE UNITED 
STATES 
TO 
FURTHER 
SOVEREIGN 
DEBT 
PROFITEERING. 
(a) IN GENERAL.—A court in or of the United States 
may not issue a summons, subpoena, writ, judgment, at-
tachment, or execution, in aid of a claim under any theory 
of law or equity a purpose of which would be furthering 
sovereign debt profiteering. 
(b) DISCLOSURES REQUIRED IN ACTIONS INVOLVING 
COLLECTION OF SOVEREIGN DEBT.—A court in or of the 
VerDate Nov 24 2008 
04:41 Jun 19, 2009
Jkt 079200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H2932.IH
H2932
tjames on PRODPC75 with BILLS
United States may not issue a summons, subpoena, writ, 
judgment, attachment, or execution against a foreign state 
or any debtor or creditor of a foreign state, with respect 
to collection of sovereign debt of the foreign state, unless 
the court has required each party seeking the summons, 
subpoena, writ, judgment, attachment, or execution to file 
with the court, and the court has received, affidavits, 
under oath, setting forth— 
(1) a statement that written notice of the claim 
against the foreign state has been provided to the 
Department of the Treasury; 
(2) a copy of the list of qualified poor countries 
maintained under section 6(a)(2), which is current 
as of the date of the affidavit; and 
(3) if the foreign state is identified on the list— 
(A) a statement of the names and address-
es of all persons who, directly or indirectly hold 
any interest in the claim against the foreign 
state; 
(B) a statement of the total amount paid 
by all persons, directly or indirectly holding an 
interest in the claim against the foreign state, 
to acquire the interest, including the date the 
interest was acquired and the identity of any 
person from whom the interest was acquired; 
VerDate Nov 24 2008 
04:41 Jun 19, 2009
Jkt 079200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H2932.IH
H2932
tjames on PRODPC75 with BILLS
(C) a statement containing a calculation of 
6 percent simple interest per year on the total 
amount so paid, for the period beginning with 
the date the interest was acquired, as of the 
date of each action sought from the court; 
(D) a statement that the claim against the 
foreign state has not been further assigned or 
encumbered by the party; 
(E) a statement that neither the holder of 
the debt, nor any owner, employee, or agent of 
the holder has given anything of value to a for-
eign state, or any officer or agent of a foreign 
state, in exchange for any action in connection 
with the acquisition or collection of the debt, or 
any information concerning the acquisition or 
collection of the debt; 
(F) a statement that each person against 
whom any legal process is sought in the case 
has been served with a copy of this Act, a copy 
of the complaint or initial process in which the 
claim is stated, and copies of the affidavits re-
quired by this subsection; and 
(G) a statement that copies of the affida-
vits required by this paragraph have been pro-
vided to the Department of the Treasury. 
VerDate Nov 24 2008 
04:41 Jun 19, 2009
Jkt 079200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H2932.IH
H2932
tjames on PRODPC75 with BILLS