Cambodia’s “Dirty Debts” to the US — Redux
In the 1970s, the US allowed Cambodia to finance the importation of rice and other agricultural commodities. The debt remains unpaid. One version of this story is that successor Cambodian governments have refused to pay these “dirty” debts. In this telling, the US used the loans to prop up a friendly but illegitimate Cambodian regime. Although the US shipped food, loan proceeds mostly financed the Cambodian military, which the US used as a proxy in the fight against the North Vietnamese and Khmer Rouge. Meanwhile, the US was bombing the Cambodian countryside, destroying domestic food production and contributing to a humanitarian crisis. To make matters worse, it turns out most of the food was sent to countries other than Cambodia. To some observers, the US bears a significant share of responsibility for the Khmer Rouge’s ultimate rise to power. Decades later, after indescribable suffering (caused at least in part by US interference) the US wants money back. The contours of this story are largely true, but the real story of the PL-480 “Food for Peace” program is more complicated. Today’s episode is about what we have found so far and the questions that still remain open.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5561161
Producer: Leanna Doty
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Cambodia’s “Dirty Debts” to the US — Redux
In the 1970s, the US allowed Cambodia to finance the importation of rice and other agricultural commodities. The debt remains unpaid. One version of this story is that successor Cambodian governments have refused to pay these “dirty” debts. In this telling, the US used the loans to prop up a friendly but illegitimate Cambodian regime. Although the US shipped food, loan proceeds mostly financed the Cambodian military, which the US used as a proxy in the fight against the North Vietnamese and Khmer Rouge. Meanwhile, the US was bombing the Cambodian countryside, destroying domestic food production and contributing to a humanitarian crisis. To make matters worse, it turns out most of the food was sent to countries other than Cambodia. To some observers, the US bears a significant share of responsibility for the Khmer Rouge’s ultimate rise to power. Decades later, after indescribable suffering (caused at least in part by US interference) the US wants money back. The contours of this story are largely true, but the real story of the PL-480 “Food for Peace” program is more complicated. Today’s episode is about what we have found so far and the questions that still remain open.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5561161
Producer: Leanna Doty
Ukraine's Expansive "Fiscal Laws" Clause
International sovereign bonds, and particularly those issued under English law, often include a clause providing that payments are subject to the applicable "fiscal and other laws." Usually, the clause makes clear this refers to fiscal laws in the “place of payment” (e.g., Luxembourg). Separately, international bonds also provide that, if the issuer imposes any taxes on bond payments, it must "gross up" payments to foreign investors, so the tax does not reduce their payments. Together, the two clauses usually immunize foreign investors from taxes imposed by the issuer but leave room for taxes imposed by the place of payment. Ukraine's bonds are different. They seem to leave room for Ukraine to impose its own "fiscal" law on payments. Arguably, they leave investors subject even to local laws that aren't fiscal in nature. Might this be a source of leverage for the country in its negotiations with GDP warrant holders, who have so far refused to make concessions in restructuring talks?
Producer: Leanna Doty
Clauses & Controversies
Cambodia’s “Dirty Debts” to the US — Redux
In the 1970s, the US allowed Cambodia to finance the importation of rice and other agricultural commodities. The debt remains unpaid. One version of this story is that successor Cambodian governments have refused to pay these “dirty” debts. In this telling, the US used the loans to prop up a friendly but illegitimate Cambodian regime. Although the US shipped food, loan proceeds mostly financed the Cambodian military, which the US used as a proxy in the fight against the North Vietnamese and Khmer Rouge. Meanwhile, the US was bombing the Cambodian countryside, destroying domestic food production and contributing to a humanitarian crisis. To make matters worse, it turns out most of the food was sent to countries other than Cambodia. To some observers, the US bears a significant share of responsibility for the Khmer Rouge’s ultimate rise to power. Decades later, after indescribable suffering (caused at least in part by US interference) the US wants money back. The contours of this story are largely true, but the real story of the PL-480 “Food for Peace” program is more complicated. Today’s episode is about what we have found so far and the questions that still remain open.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5561161
Producer: Leanna Doty
