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UNCTAD Principles on Responsible Sovereign Lending & Borrowing: A Comparative Legal Survey

The following is a guest post by Professor Juan Pablo Bohoslavsky, currently UNCTAD Sovereign Debt Expert, who has previously contributed to the International Law Observer on the topic of “Past and Present of Corporate Complicity for Financing Human Rights Abuses: The Relevance of the Cassese report“, the unveiling of the UNCTAD principles to guide responsible sovereign lending and borrowing and the UNCTAD conference on the Principles on Responsible Sovereign Borrowing and Lending. For a short biography of Professor Bohoslavsky, please see here.

In 2009, UNCTAD initiated a project under the broad heading of “Principles on Responsible Sovereign Lending and Borrowing” (PRSLB).  No universally agreed principles currently exist in this area. Building consensus around a set of well grounded principles could lead to the establishment of criteria to assess whether the contracting of sovereign debt has been performed in accordance with internationally accepted principles (more).

UNCTAD established an Expert Group in 2009, composed of experts in law and economics, private investors and NGOs. Senior representatives from the IMF, the WB and Paris Club participate as observers of this group. After several formal meetings and idea exchanges, the first draft of the PRSLB emerged in May 2011.

During 2011 and 2012 five consultative meetings took place in Buenos Aires, Bangkok Luanda, Geneva and Jeddah in order to get governmental feedback from UN Member States on the design and the possible implementation process. Around 60 countries provided their views. After a series of bilateral and high level regional governmental consultations and subsequent refinements introduced by the Expert Group, on the occasion of UNCTAD XIII to be held Doha in April 2012, the consolidated version of the PRSLB will be launched for endorsement and implementation (available here).

A key academic research assessing whether legal domestic orders confirm the existence of the PRSLB was recently released (see here). This document analyzes whether and to what extent there is a homogeneous understanding among fifteen selected jurisdictions of principles relating to responsible sovereign lending and borrowing across different jurisdictions. The conclusion is that while most of the Principles can be already regarded as general principles of law, the rest can be categorized as guiding, emerging or structural principles.

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