Anita Ramasastry, Odious Debt or Odious Payments - Using Anti-Corruption Measures to Prevent Odious Debt, 32 N.C. J. Int'l L. 819 (2006), https://digitalcommons.law.uw.edu/faculty-articles/738
odious payments, anti-corruption, odious debt doctrine, sovereign debt
This article focuses on ways to stem the tide of odious payments and to stop such payments, when made, from moving offshore into foreign bank accounts. To the extent that such payments leave a country, fewer funds are available to repay sovereign debts in the event of a regime change, or to feed and shelter the population. This article focuses on emerging anti-corruption mechanisms as a means of dealing with odious payments and odious debt. It also focuses on the role of financial institutions (banks) as gatekeepers. Part I of this article focuses on the way in which banks are involved in odious payments: lending or extending credit, advising corrupt regimes, and helping hide the assets of political elites. Part II examines the use of a "publish what you lend" framework to provide for transparency in sovereign lending. Part III focuses on the use of anti-corruption measures to deal with capital flight. The use of procedures, such as heightened scrutiny for politically exposed persons, may be an important step in stopping capital flight when odious debt payments are being concealed by financial institutions. Also, the criminalization of illicit enrichment or inexplicable wealth may prove a valuable tool for prosecuting corrupt leaders.