Proposal for Debt Suspension Legislation

Abstract

This is a proposal for a statutory stay on recovering commercial debt repayments owed by low-income countries to free up resources to combat COVID-19. The proposal enhances the effect of the Debt Service Suspension Initiative committed to by the G20 and Paris Club official creditors and voluntary arrangements of private creditors.

The current proposal is time-bound, does not interfere with the underlying contractual rights of parties to the contract and is contingent on the country subject to such claims making a suspension request to the court.

Keywords: COVID-19; Sovereign Debt; DSSI

JEL Classification: K1; K2