ATFA: "IMF Involvement in U.S. Legal Case Could Harm the Fund"

ATFA: "IMF Involvement in U.S. Legal Case Could Harm the Fund"

WASHINGTON, July 19, 2013 – Following news of the IMF's preliminary plans to file an amicus brief to support Argentina in its case before U.S. courts, ATFA Chair Robert Shapiro issued the following statement: "It has been reported that the IMF is considering filing an amicus brief before the U.S. Supreme Court in a case involving Argentina's refusal to honor its contract with bondholders under NY law.  Any court filing by the IMF in this matter seems very ill-advised.  The Court has not asked for the IMF's views – in fact, it has not even asked for the U.S. Government's views.  For that reason, the U.S. Government has determined not to get involved at this time.  In any event, this is a private lawsuit based on a contract dispute in which the only issue facing the Supreme Court is the interpretation of U.S. federal statutes.  There is no role for direct involvement by the IMF in this matter. "An intervention by the IMF favoring Argentina's request would also clearly violate the Fund's strict commitment to neutrality, which prohibits IMF involvement in disputes between its members and third parties. The Fund has faithfully adhered to this principle for decades.  Breaking this bedrock policy could only tarnish the Fund's reputation for impartiality. "It should also be noted that the party the IMF seeks to support – the Argentine Government – has said it will not obey the U.S. Supreme Court if it upholds the rulings of the U.S. District Court and the U.S. Court of Appeals in favor of Argentina's bondholders.  This is an astonishing assertion, given that in its bond contract Argentina pledged to abide by New York law, to submit itself to the jurisdiction of U.S. courts, and to irrevocably waive its sovereign immunity.   For the IMF now to unilaterally step into this U.S. judicial proceeding, on behalf of a nation that has explicitly said it will not respect an adverse finding by the highest court of the United States – the most important member and largest funder of the IMF –would set a troubling precedent that could only harm the IMF."