Tracking Down the Missing Financial Link in Transitional Justice

In: International Human Rights Law Review
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  • 1 1Sovereign Debt Expert, United Nations Conference on Trade and Development,

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This article argues that lenders providing financial assistance to authoritarian regimes should be held responsible for complicity if they knew or should have known that they would facilitate human rights abuses. Discussing the lenders’ role in a transitional justice context leads to a broadening of legal and institutional tools to channel this responsibility. This article starts by critically assessing the micro criteria traditionally used to understand the causal link between finance and human rights abuses, suggesting that a macro (i.e. holistic, interdisciplinary and casuistic) approach considering structures, processes and dynamics of sovereign financing should be applied when interpreting this link. It also explains how that traditional view is being challenged. A rational choice approach is taken to explain the most salient financial features of large-scale campaigns of gross human rights violations in order to understand the real relevance of funds in contexts of criminal regimes. The legal bases of responsibility for complicity are then discussed, separately presenting the arguments applied to private, multilateral and bilateral lenders. It also outlines how the missing financial link could be integrated into the domain of transitional justice, presenting, elaborating and assessing enforceability of concrete mechanisms to channel financial complicity in order to attain transitional goals. Finally, concluding remarks and challenges on the relationship between financial complicity and transitional justice are presented; and policy and economic considerations are made to better understand the real implications that incorporating the financial dimension into the transitional justice universe could have for a country.

  • 45)

    Khulumani complaint, 11 November 2002, para. 393 and following, available at:

  • 61)

    Ibid. at 1221.

  • 77)

    Cassese (1979), supra n. 41, at 261; S Michalowski, Unconstitutional Regimes and the Validity of Sovereign Debt: A Legal Perspective (Ashgate, 2007) 52, at 82.

  • 83)

    Cassese (1979), supra n. 41, at 257.

  • 88)

    Cassese (1978), supra n. 41, Vol. I, 3, at 18.

  • 158)

    Cassese (1978), supra n. 41. On the specific role of the IMF in Chile see M Elahi, ‘The Impact of Financial Institutions on the Realization of Human Rights: Case Study of the International Monetary Fund in Chile’, (1986) 6(2) Boston College Third World Law Journal 143-160. On the role of multinational private banks in this authoritarian regime, I Letelier & M Moffitt, Michael ‘Supporting Repression: Multinational Banks in Chile’, (1978) 20(2) Race & Class, 111-128.

  • 166)

    UN Doc A/56/10 (2001), supra n. 164, para. 3.

  • 171)

    EC Bulletin, 1977, No. 6, para. 2.2.59.

  • 174)

    Act of 31 May 1976, Pub. L. No. 94-302, S 211, 90, Stat. 591, 595; Act of 3 October 1977, Pub. L. No. 95-118, S 701, 91 Stat. 1067, 1069-71. The link between human rights and the role of IFIs was discussed in International Financial Institutions: Hearings on S.871 and S.872 before the Subcomm. on Foreign Assistance of the Senate Comm. on Foreign Relations, 95th Cong., 1st Sess. 37, 9-10 March 1977, 67-9. See S Collins, ‘The Carter Administration – An Appraisal: The Perspective from the Agency for International Development’ in Nanda, supra n. 169, at 26.

  • 189)

    Cassese (1978), supra n. 41.

  • 222)

    Cassese (1979), supra 41, at 261.

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