The turning point came when the US changed its legislation in the mid 1970s as loans began flowing into Latin America:
New norms allowed states to be sued under US jurisdiction through the so called Sovereign Immunities Act
Argentina, under its military dictatorship, was the first country to reform its laws to permit the transfer of jurisdiction to foreign courts
"From that moment on, virtually all Latin American countries began contracting loans and issuing bonds under conditions dictated by Washington", he states.
The IMF plays the central part in this scheme, Gaona highlights:
"The IMF has one critical feature: it can inflict damage on any country through its operations. It not only dictates economic policy and monitors state actions but also cannot be brought to court anywhere in the world."
The International Centre for Settlement of Investment Disputes (ICSID) also plays an important role in neocolonial processes, the expert adds:
ICSID is linked to the World Bank. Through bilateral investment agreements, investors can bring disputes against states to this arbitration body
Unlike ordinary courts, ICSID tribunals consist of three arbitrators whose decisions are final and cannot be appealed. Typically, they are lawyers representing the interests of large corporations
"The system is fully engineered," he adds.
The result of such actions is a deliberately constructed legal architecture designed to control economies and rule in favor of creditors in any conflict, Gaona concludes.