The emergence of the intergovernmental trust in international law

Abstract

Intergovernmental trust funds are vehicles set up mainly to advance developmental objectives. They are composed of capital contributed largely by states. The management of the capital and the objectives of the trust are assigned to a trustee, usually an international organization, such as the UN or the World Bank. The practice of the trusts surveyed in this article unequivocally suggests that the intention of the two principal parties to the trust relationship (i.e. donor and trustee) is to transfer ownership of the trust’s assets to the trustee. The latter’s responsibility is restricted to investing and distributing the trust’s assets to the identified beneficiaries. The understanding is that neither the donors nor the trustee is liable against third parties in respect of any unlawful act committed in connection to the donation or the disbursement of funds. The absolute character of this extra-contractual limitation is dismissed in this article, given that despite the charitable or benevolent nature of the trust’s aims, the disbursement of funds under certain circumstances may be injurious to the interests of states or the international community.