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US Hedge Fund Freezes Argentina’s Embassy Assets in Belgium

By: PanAm Post Staff - May 7, 2015, 3:31 pm

EspañolA US hedge fund obtained a freeze order this week on Argentinean embassy bank accounts in Belgium as it goes after a US$1.3 billion debt default against the South American country, local media reported on Thursday.

“We have been informed of a preventive closure of one or more bank accounts held by the Argentine embassy,” Belgian foreign ministry spokesman Hendrik Van De Velde said. “We were informed of this order by a notary … acting for a foreign entity in connection with a foreign default.”

NML Capital, led by Paul Singer, succeeded in freezing the bank accounts and other assets, including the building, of Argentina’s embassy in Brussels. A New York court ruled that the Argentinean debt restructuring plan could not move forward unless payments to the holdout creditors were made in full. Buenos Aires, however, has refused to pay, and says the hedge funds lost their claim when they refused to accept the restructured deal when the country defaulted in 2001.

Argentinean Foreign Minister Héctor Timerman has led Argentina's strategy against US hedge funds.
Argentinean Foreign Minister Héctor Timerman has led Argentina’s strategy against US hedge funds. (Contraingjerencia)

The so-called vulture funds took similar action in 2012, but a court rejected the requested on the grounds that the 1961 Vienna Convention prohibits the seizure of diplomatic property.

“This is the usual request from a vulture fund that they have already tried in Belgium in 2009 and 2011,” an official of Argentina’s Foreign Ministry told La Nación. “Nothing is going to happen, and this won’t change our lives.”

However, officials of the Secretariat for International Coordination and Cooperation expressed fears that the measure could spread to other places in Europe, threatening Argentina’s diplomatic presence in Europe.

Sources: Infobae, La Nación.