A measure to prevent the Isle of Man being used by so-called vulture funds that exploit the debts of some of the world’s poorest countries has passed into law.

The Heavily Indebted Poor Countries (Limitation on Debt Recovery) Act 2012 prevents vulture funds from buying up poor nations’ debts for a fraction of their original amount and then using the courts to sue for the full value, plus interest and penalty charges.

The UK offshore dependency's new law, equivalent to the UK Debt Relief (Developing Countries) Act 2010, supports an international initiative to provide debt relief to heavily indebted low-income countries.

The IMF and World Bank estimate that vulture funds are seeking total claims of $1.47 billion from countries including Cameroon, Ethiopia, Sudan, Uganda and the Democratic Republic of Congo.