Animation of two vultures towering over the Earth, representing vulture funds. Photo: Luba Lukova.Â
By Alejandra Garcia – Jan 31, 2023
In the 2000s, a vulture fund succeeded in driving Argentina out of the international markets, preventing it from accessing them for 12 years. The case transcended as Argentina versus Elliott Management Corporation, a group of investors that won a lawsuit against Buenos Aires in 2002 and, in 2012, even seized the Libertad frigate, the flagship of the Argentinian Navy.
The creator of the vulture fund, US American Paul Singer, refused to restructure the Latin American nation’s debt and got the Argentinian State to pay him US$1.3 billion for bonds that he bought for US$40 million during the crisis. This, of course, is perfectly legal and in line with the blood-sucking neoliberal policies promoted by the North.
Today, a new vulture fund is seeking to achieve the same results from Cuba amid the island’s economic crisis, aggravated by the impact of the pandemic and Washington’s hostile measures. On January 23, the High Court of England and Wales accepted a lawsuit filed by the vulture fund CRF1 Ltd against the government and Cuba’s Central Bank.
In an official statement, the first one released since the process became known at the end of last year, the Superintendent of the Central Bank of Cuba (BCC) indicated that the vulture fund, formed in 2009 in the Cayman Islands, claims the payment of a debt of more than US$78 million.
CRF1 Ltd demands the sum for two loans and their interest, originally granted to the island country by European banks in the 1980s, three decades ago. According to the local press, the commercial loan was issued in German marks (a currency that no longer exists) to the Commander-in-Chief Fidel Castro Ruz’s government.
The lawsuit was filed by the company at the time when the National Bank (BNC) had central bank functions, before its dissolution in the late 1990s and replacement by the current Central Bank of Cuba (BCC).
“Cuba and its National Bank have never disowned their debts and have always maintained an interest in negotiating with their legitimate creditors. However, the island does not recognize CRF1 as a creditor of the BNC or Cuba. It never has been,” the BCC stated.
In a press release, the bank’s directors described CRF as a “vulture fund,” a company that purchases second-hand assets considered hard to recover at low or auction prices.
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Experts on vulture funds are claiming that if Cuba loses, it could cost the island billions in overdue payments to other entities and, in the worst case, lead to the seizure of government-owned assets, such as oil tankers and incoming wire transfers.
According to Cuba, the claim will not proceed because the BNC does not have the power to act on behalf of the Cuban government –which issues the public debt– nor act without the prior consent of the Ministry of Finance and the Council of Ministers. Nor is it able to authorize the operation of the guarantees.
The ongoing trial in London adds one more pressure on the island, which already is fighting the impact of the neoliberal whims as it tries to rise from the crisis with its usual determination to achieve the impossible.
