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1976/10/21 HR11315 Foreign Sovereign Immunities Act of 1976
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The original documents are located in Box 69, folder "10/21/76 HR11315 Foreign Sovereign
Immunities Act of 1976" of the White House Records Office: Legislation Case Files at the
Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Exact duplicates within this folder were not digitized.
Digitized from Box 69 of the White House Records Office Legislation Case Files at the Gerald R. Ford Presidential Library
APPROVED
THE WHITE HOUSE
ACTION
WASHINGTON
Last Day: October 23
October 20, 1976
MEMORANDUM FOR THE PRESIDENT
10/20/76
FROM:
JIM CANNON Fallowern
SUBJECT:
H.R. 11315
Foreign Sovereign Immunities
sig
Act of 1976
10/01/16
1/05/76
S. 3553 - Foreign Sovereign Immunities
Act of 1976
Attached for your consideration are H.R. 11315, sponsored
by Representatives Rodino and Hutchinson, and S. 3553,
sponsored by Senators Hruska, Eastland and Scott (Pennsylvania).
The enrolled bills are identical.
The purposes of this legislation are to more clearly
define the jurisdiction of U.S. courts in suits against
foreign states, to more clearly define the scope of the
immunities enjoyed by foreign states and to authorize
the removal to Federal court suits brought against foreign
states in State courts.
Current U.S. law regarding sovereign immunity is incomplete
and our courts have experienced substantial difficulties
in cases involving foreign states. Because of the rapid
growth in trade between the United States and foreign
countries, it has become increasingly necessary to provide
precise statutory guidance to our courts to adjudicate
disputes between domestic commercial interests and foreign
states. This legislation, which is the product of a
joint endeavor between the Departments of State and Justice,
provides such guidance and brings U.S. practice into
conformity with that of most other nations in resolving
sovereign immunity questions.
A detailed discussion of the provisions of the enrolled
bill is provided in OMB's enrolled bill report at Tab A.
Agency Recommendations
In its haste to adjourn, the Congress passed identical
House and Senate bills. At the time the Senate passed H.R.
11315, it attempted to vacate its earlier passage of S. 3553
but was unable to do so because it had left the Senate's
2
jurisdiction. The House, unaware that the Senate had
passed the House bill, also passed the Senate bill. In
view of the fact that there is some question as to whether
S. 3553 has been properly enrolled, the Department of
State, the Department of Justice and the Office of Management
and Budget recommend that you approve H.R. 11315 and take
no action on (pocket veto) S. 3553).
Staff Recommendations
Max Friedersdorf, Counsel's Office (Kilberg), NSC and I
recommend approval of H.R. 11315 and disapproval of S. 3553.
Recommendation
That you sign H.R. 11315 at Tab B.
That you issue the signing statement at Tab C which has
been cleared by Doug Smith.
Approve ARM
Disapprove
and
That you veto S. 3553 and sign Memorandum of Disapproval
at Tab D which has been cleared by Doug Smith.
FORD
)
OFFICE PRESIDENT SIVIS a UNITED
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
OCT 18 1976
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bills
(1) H.R. 11315 - Foreign Sovereign Immunities
Act of 1976
Sponsor - Rep. Rodino (D) New Jersey and
Rep. Hutchinson (R) Michigan
(2) S. 3553 - Foreign Sovereign Immunities
Act of 1976
Sponsor - Sen. Hruska (R) Nebraska,
Sen. Eastland (D) Mississippi, and
Sen. Scott (R) Pennsylvania
Last Day for Action
October 23, 1976 - Saturday
Purpose
Defines the jurisdiction of United States courts in suits
against foreign states; defines the jurisdictional immunities
of a foreign state; and authorizes removal of suits brought
in State courts against foreign states.
Agency Recommendations
Office of Management and Budget
Approval of H.R. 11315
Disapproval of S. 3553
(Memorandum of disapproval
attached)
Department of State
Approval of H.R. 11315
(Signing statement
attached)
Department of Justice
Approval of H.R. 11315
Administrative Office of the
United States Courts
No objection to either bill
Department of Commerce
No objection to either bill,
but defers to Justice
Securities and Exchange Commission
No recommendation received
2
Discussion
The broad purposes of this legislation are to facilitate
litigation against foreign states and to minimize
irritations in foreign relations arising out of such
litigation.
Currently, the incompleteness of the law of sovereign
immunity in the United States has created a substantive
uncertainty for the courts in cases involving foreign
states. This, coupled with the growth in trade between
the United States and foreign countries, makes it increasingly
important to provide precise statutory guidance to American
courts to adjudicate disputes between private parties and
foreign states arising out of their commercial activities
and other activities which are of a private law nature.
Accordingly, the bills would establish exclusive standards
to be used in resolving questions of sovereign immunity
raised by foreign states before Federal and State
courts. The legislation is intended to preempt any other
Federal or State law, excluding applicable international
agreements, and to bring U.S. practice into conformity
with that of most other nations. It would accomplish this
purpose by leaving sovereign immunity decisions exclusively
to the courts, thereby discontinuing the current practice
of judicial deference to "suggestions of immunity" from
the Executive branch (i.e., when the Department of State
receives requests from foreign states for sovereign
immunity and determines whether to request the Department
of Justice to suggest the defense in Federal courts, it
adheres to the so-called "restrictive theory of immunity."
Under that theory, immunity is only granted in suits arising
out of a foreign state's governmental acts and is not
extended to suits arising out of its commercial or
proprietary acts, or other acts affecting private persons.)
This legislation is the product of a joint endeavor by the
Departments of State and Justice, which began almost a
decade ago to modernize the law of foreign state immunity
in the United States. It reflects several years of
consultation with the organized bar and the academic
community. The bill is substantially similar to legislation
submitted by the Departments of State and Justice to the
Congress.
FORD
STATE
3
In its haste to adjourn, the Congress passed identical
Senate and House bills. At the time the Senate passed
H.R. 11315, it attempted to vacate its earlier passage of
S. 3553 but was unable to do so because it had left the
Senate's jurisdiction. The House, unaware that the Senate
had passed the House bill, also passed the Senate bill.
Summary of H.R. 11315 and S. 3553
The legislation consists of three principal parts:
(1) definition of the jurisdiction of the United States
courts in actions against foreign states; (2) codification
with judicial standards of the so-called "restrictive
theory of sovereign immunity", i.e., the jurisdictional
immunities of foreign states; and (3) removal of suits
brought in State courts against foreign states to Federal
courts.
Original Jurisdiction of Federal Courts in Actions Against
Foreign States
Original jurisdiction, both subject matter and personal,
would be established in the U.S. District Court in any
claim, without regard to the amount in controversy, against
any foreign state or its entity when either that foreign
state has waived immunity in the case or the case is based
on its commercial or property transactions in the U.S.
Jurisdiction could not be established when it would contra-
vene existing treaties or other international agreements
preserving immunity.
Jurisdictional Immunities of Foreign States
-- Codification of the restrictive theory of sovereign immunity.
The so-called "restrictive theory of sovereign immunity"--
that the sovereign immunity of foreign states should be
limited to cases involving acts of a foreign state which
are governmental in nature, as opposed to acts which are
either commercial in nature or those acts which private
persons normally perform--would be refined and codified.
As law it would be applicable to the foreign state, a
political subdivision of the state, or an agency or
instrumentality of the foreign state having status as a
TORD
4
legal entity or separate person (e.g., a trading corporation,
shipping line, export associations, etc.). Consequently,
the engagement of foreign governments in a non-governmental
activity, which is either commercial or private in nature,
would constitute an implied waiver of sovereign immunity
with respect to that activity and it would be subject to
suit in a Federal court.
In this regard, specific categories of exceptions to
jurisdictional immunity would be established.
1. Waiver
A foreign state may waive immunity, either explicitly
by renouncing its immunity by treaty, implicitly by
agreeing to arbitration of a case under the laws of
another country, or by filing a responsive pleading
in a suit. However, mere appearance by the foreign
state in another action unrelated would not confer
personal jurisdiction or constitute a waiver of
immunity. In transactions in which a foreign state
has agreed to waiver of sovereign immunity, that
waiver could only be withdrawn in a manner consistent
with the expression of waiver in the original agreement.
2. Commercial Activity
"Commercial activity" includes the broad spectrum of
activity from a singular commercial transaction to the
regular conduct of a commercial enterprise. Under this
definition, the fact that goods or services are to be
procured via contract for public purposes would be
irrelevant; the commercial nature of the transaction
itself establishes the basis for the court's
jurisdiction. In the final analysis, the court would make
the determination whether or not an activity of a foreign
state is commercial or public, thereby requiring the
foreign state to plead sovereign immunity as an
affirmative defense, if the case does not relate to
either a treaty or other international agreement
maintaining the immunity of that foreign state or
to debt obligations incurred for general public
purposes.
5
3. Ownership or Expropriation of Property
Immunity would be denied in cases involving a foreign
government's ownership of real or "immovable" property
located in the U.S. or when property owned by an
entity of the U.S. and located in the foreign country
has been seized or nationalized without compensation
as required by international law.
4. Non-commercial Torts
Immunity would be denied a foreign state in all tort
claims for monetary damages caused by the tortious
acts or omissions of a foreign state or its officials
or employees acting within the scope of their
authority and occurring within U.S. jurisdiction,
unless specifically excepted in statute or treaty.
Immunity of foreign diplomats or consular representa-
tives, themselves, would be unaffected.
5. Maritime Liens
Immunity would be denied to foreign states in cases
where a suit in admiralty is brought to enforce
a maritime lien based upon a commercial activity of
that foreign state or its vessels.
Thus, the liability of a foreign state or its entity in
cases where immunity is denied would be identical to that
of a private individual defendant. The only exception
would be that the foreign state cannot be held liable for
interest on the monetary value of the claim prior to
judgment or for punitive damages.
-- Extent of liability.
If a foreign state, political subdivision, agency, or
instrumentality is not entitled to immunity from jurisdiction,
it would be subject to the same liability as a private party
under like circumstances. However, the tort liability of the
foreign state or its political subdivision would not extend
to punitive damages.
FORD
6
-- Counterclaims
Foreign states would be denied immunity in certain instances
when a counterclaim is brought against the foreign state
which has brought an action or intervened in an action
in a Federal or State court.
-- Service of Process
A hierarchy of procedures for service of process would be
established by the bill. Sequentially, these methods for
service of process are:
1. A special agreement between plaintiff and defendant
foreign state would be made on the preferred procedure
for service of process.
2. If no special arrangement exists, service would be
accomplished: (a) in accordance with an applicable
international convention on service of judical documents;
(b) by the provision of a letter rogatory (letter from
the U.S. Court to the court of the foreign state requesting
the foreign court to assist the U.S. court) or request
for ultimate service in a foreign country as directed
by the authority of that state (this is a preliminary
administrative step leading to service of process in a
foreign country) ; or (c) by registered mail to the foreign
minister or official in charge of the foreign affairs
of the foreign state.
3. If 30 days have passed without proof that service was
made by any of the preceding methods, service would be
made through diplomatic channels as a last resort.
Service on foreign agencies or instrumentalities (e.g.,
foreign companies, trading associations, etc.) would be made
in a manner similar to the hierarchy of methods outlined
above, except diplomatic channels would not be used. In
addition, service could also be made in accordance with the
law and procedures of the foreign state.
No judgment of default could be entered against a foreign
state or its entities unless sixty days have elapsed and
the court determines that the claimant has substantially
proved the validity of the claim with evidence.
7
-- Attachment and Execution of Property
The legislation would affirm that the property of a foreign
state is generally immune from attachment and execution.
However, in addition to explicit or implied waiver, other
exceptions to immunity would be established when property
is: (1) used for commercial purposes in the U.S. and upon
which the claim is based; (2) taken in violation of inter-
national law; (3) acquired by succession or gift; (4) immovable;
or (5) under a contractual obligation.
-- Property of International Organizations, Central Bank
Funds and Military Property
Property held by international organizations, which have been
designated by the President pursuant to the International
Organizations Immunities Act, would not be subject to attach-
ment and execution, e.g., the International Monetary Fund
and the World Bank. In addition, funds of a foreign central
bank deposited in the U.S. for that bank's "own account"
and military property would also be similarly immune.
- Venue
Venue would be established in the judicial district:
(1) where the cause of action substantially occurred;
(2) for suits in admiralty to enforce a maritime lien
against a vessel or cargo of a foreign state where the
vessel is located; (3) where the agency or instrumentality
is licensed to do business or doing business; and (4) for
the District of Columbia.
Removal of Cases from State Courts
Suits in State courts with a party foreign state would be
removed to the U.S. District Court at the discretion of
the foreign state, even when there are multiple defendants
of which one or more may be a citizen of the State in which
the action was brought. This provision responds to the
potential sensitivity of actions against foreign states
by ensuring for them the opportunity to litigate their
casesin the U.S. District Court. Consequently, a foreign
state has the option of litigating under Federal law
rather than being subjected to the differing laws and
judicial procedures of the States.
Finally, the legislation would take effect 90 days after
enactment.
8
Recommendation
In its attached views letter, the Department of Justice
advises that "in view of the Senate's action vacating
its passage of S. 3553, there is most serious doubt that
S. 3553 has been properly enrolled, and we recommend that
no action be taken on S. 3553." We concur and recommend
that you approve H.R. 11315 and take no action on S. 3553.
A proposed signing statement is enclosed with the State
views letter for your consideration. We have also
prepared for your consideration a brief memorandum of
disapproval which explains why no action is being taken on
S. 3553.
Paul H. O'Neill Chein
Acting Director
Enclosures
FORD LIBRARY
B
ADMINISTRATIVE OFFICE OF THE
UNITED STATES COURTS
SUPREME COURT BUILDING
WASHINGTON, D.C. 20544
ROWLAND F. KIRKS
DIRECTOR
October 7, 1976
WILLIAM E. FOLEY
DEPUTY DIRECTOR
Mr. James M. Frey
Assistant Director
for Legislative Reference
Office of Management and Budget
Washington, D. C.
Dear Mr. Frey:
This is in response to your enrolled bill
request of October 6, 1976, transmitting for views
and recommendations S. 3553, "To define the
jurisdiction of United States courts in suits against
foreign states, the circumstances in which foreign
states are immune from suit and in which execution
may not be levied on their property, and for other
purposes."
In considering this legislation the Judicial
Conference of the United States proposed a change in
the venue section which has not been incorporated,
but no objection is interposed to executive approval
of S. 3553.
Sincerely,
(in - William Deputy Director E. Foley
STATE FORD LIBRARY
DEPARTMENT OF COMMERCE
GENERAL COUNSEL OF THE
UNITED STATES DEPARTMENT OF COMMERCE
UNITED STATES OF AMERICA
Washington, D.C. 20230
OCT 8 1976
Honorable James T. Lynn
Director, Office of Management
and Budget
Washington, D. C. 20503
Attention: Assistant Director for Legislative Reference
Dear Mr. Lynn:
This is in reply to your request for the views of this Department
concerning S. 3553, an enrolled enactment
"To define the jurisdiction of United States courts in suits
against foreign states, the circumstances in which foreign
states are immune from suit and in which execution may
not be levied on their property, and for other purposes,"
to be cited as the "Foreign Sovereign Immunities Act of 1976".
The enrolled enactment would codify the "restrictive theory of
sovereign immunity" which provides that foreign states are not
immune from the jurisdiction of U.S. courts insofar as their com-
mercial activities are concerned and that their commercial property
may be levied upon for the satisfaction of judgments rendered against
them arising out of their commercial activities. It would also specify
how foreign states or political subdivisions are to be served with
process in United States District Courts.
The Department of Commerce has no objection to approval by the
President of S. 3553.
Enactment of this legislation would require no expenditure of
funds by this Department.
25 minth
REVOLUTION
AMERICAN
BICENTENNIAL
1776-1976
©
THE WHITE HOUSE
WASHINGTON
October 12, 1976
MEMO FOR ROBERT LINDER
FROM: TOM JONES
The Senate Parliamentarian, Murray Zweben, called
my office this morning to leave word with me that
he had held conversations with the House
Parliamentarian, William Brown, and that they had
jointly agreed to recommend the following:
2 bills were passed by Congress in the
final hours and they were both
identical - S. 3553 and H.R. 11315.
If the President decides to approve
one of them they both recommend that
he sign the House Bill, H.R. 11315,
since it was actually passed first,
and allow the Senate bill to be
pocket vetoed.
Tom
Tom Jones
p.s.
neither bill has reached the White House
as yet but they will be in the last batch
to come from Congress.
DEPARTMENT OF COMMERCE
GENERAL COUNSEL OF THE
UNITED STATES DEPARTMENT OF COMMERCE
UNITED STATES OF AMERICA
Washington, D.C. 20230
OCT 13 1976
Honorable James T. Lynn
Director, Office of Management
and Budget
Washington, D. C. 20503
Attention: Assistant Director for Legislative Reference
Dear Mr. Lynn:
This is in reply to your request for the views of this Department
concerning H.R. 11315, an enrolled enactment
"To define the jurisdiction of United States courts in
suits against foreign states, the circumstances in
which foreign states are immune from suit and in
which execution may not be levied on their property,
and for other purposes. 11
H. R. 11315 is for the same purpose as, and practically identical
to, S. 3553 which was also enrolled in the closing days of the Congress.
By letter of October 8, 1976, the Department stated that it would have
no objection to approval by the President of S. 3553. We further stated
that enactment of the legislation would require no expenditure of funds
by this Department.
We would also have no objection to approval by the President of
H.R. 11315. However, we would defer to the views of the Department
of Justice as to which of these two bills should be approved by the
President.
Noth
AMERICAN REVOLUTION INFORMATION
1776-1976
2
e
"ASSISTANT ATTORNEY GENERAL
LEGISLATIVE AFFAIRS
Department of Justice
Washington, D.C. 20530
October 13, 1976
Honorable James T. Lynn
Director, Office of Management
and Budget
Washington, D. C. 20503
Dear Mr. Lynn:
In compliance with your request, I have examined
a facsimile of the enrolled bill, H.R. 11315, "To define
the jurisdiction of United States courts in suits against
foreign states, the circumstances in which foreign states
are immune from suit and in which execution may not be
levied on their property, and for other purposes."
The bill is the product of a joint endeavor by the
Departments of State and Justice, which began almost a
decade ago, to modernize the law of foreign state immunity
in the United States. The bill represents several years'
consultation involving three Administrations, the
organized bar and the academic community. A precursor
of the bill was introduced in the Congress three years
ago (H.R. 3493 and S. 566, 93d Cong., 1st Sess.).
The bill codifies as a matter of Federal law the
so-called "restrictive theory of sovereign immunity"
(pursuant to which foreign states are subject to suit
with respect to their commercial and private law activi-
ties). The bill gives detailed guidance to the courts
on the standards to be employed in determining questions
of sovereign immunity. These are consistent with the
principles applied in other developed legal systems.
The task of determining whether a foreign state is
entitled to immunity will be transferred wholly to the
courts, and the Department of State will no longer
express itself on requests for immunity directed to it
by the courts or by foreign states. The means whereby
process may be served on foreign states is specified in
detail. Finally, foreign states will no longer be
accorded absolute immunity from execution on judgments
rendered against them, as is now the case, and their
immunity from execution will conform closely to the
restrictive theory of immunity from jurisdiction.
TORD
- 2 -
The central principle of the bill is to make the
question of a foreign state's entitlement to immunity
an issue justiciable by the courts, without partici-
pation by the Departments of State and Justice. At
present, the courts generally defer to the views of the
Department of State, which is formally made of record
in court by this Department. This method of determining
immunity puts the Executive Branch in the difficult
position of effectively determining whether the plaintiff
will have his day in court. While the Department of
State has attempted to provide internal procedures which
would give both the plaintiff and the defendant foreign
state a hearing, it is not satisfactory that an Executive
agency should determine whether a plaintiff will be
permitted to pursue his cause of action in the courts.
Questions of such moment are appropriate for resolution
by the courts, rather than by the Executive Branch. This
also is the universal method followed in other legal
systems.
A companion bill in the Senate, S. 3553, has also
been enrolled. S. 3553 was initially passed in the
Senate before that Chamber had received H.R. 11315 from
the House. After the House-passed version of the bill
reached the Senate, the Senate vacated its passage of
S. 3553 and passed H.R. 11315. In the closing hours of
the 94th Congress, the House of Representatives, being
unaware that the Senate had passed the House-version of
the bill, also passed the Senate-version of the bill.
In view of the Senate's action vacating its passage
of S. 3553, there is the most serious doubt that S. 3553
has been properly enrolled, and we recommend that no
action be taken on S. 3553.
I wish to note the following errors on the facsimile
of H.R. 11315 which I have examined:
-In Sec. 2 (b), in the heading for new
Sec. 1330, the first word should be "Actions",
instead of "Action".
- 3 -
-In Sec. 4 (a), in the new headings for
Chapter 97, after Sec. 1608, there should be
a semicolon between "time to answer" and
"default".
-In Sec. 4 (a), in new Sec. 1604, there
should be a comma on line two after "this
Act".
-In Sec. 4 (a), in new Sec. 1609, there
should be commas on line two after "this
Act", and on line four between the words
"attachment" and "arrest".
The Department of Justice recommends Executive
approval of H.R. 11315.
Sincerely,
Michael Ue Welenow
MICHAEL M. UHLMANN
Assistant Attorney General
DEPARTMENT OF STATE
Washington, D.C. 20520
OCT 15 1976
Re: H.R.11315 and S.3553 - Foreign
Sovereign Immunities Act of 1976
Dear Mr. Lynn:
The Department of State wholeheartedly recommends
that the President sign the enrolled bill, H.R. 11315.
This was an Administration proposal drafted by the
Departments of State and Justice. H.R.11315, as
passed by the Congress, is virtually identical to the
Administration's bill. Moreover, any variances have
been reviewed and fully concurred in by the Departments
of State and Justice.
Besides H.R. .11315, the Congress also passed the
Senate version of the bill, S.3553. The Senate bill
is identical to the House bill. Clearly, only one
of the bills should be signed, and we believe it more
appropriate to sign the House bill, H.R. 11315. The
House undertook the principal legislative effort: it
held the only hearings and its report was filed before
the Senate's report. Also, the Senate belatedly at-
tempted to suspend action on its bill in favor of
H.R.11315. See Cong. Rec., Oct. 1, 1976, page S 17721.
Thus, the Senate bill should be ignored and only
H.R. 11315 should be signed.
The legislation had no opposition in the Congress.
To the contrary, it had the support of the American
Bar Association, and of other bar groups, international
legal scholars and members of the business community.
The bill was the product of over ten years of work
involving three administrations, members of the academic
community, and many practicing lawyers.
The Honorable
James T. Lynn,
Director,
Office of Management and Budget.
FORD LIBRARY sivere
- 2 -
H.R.11315, if signed into law, would accomplish
the following objectives:
- It would codify modern international law (and
recent U.S. decisions) on when foreign states
and their state-owned enterprises are immune
from suit in United States courts (the basic
principle is that foreign states have immunity
for their public acts, but not for their
commercial or private acts).
- It would bring United States practice in this
area up-to-date with the practice in other
countries.
- It would reduce diplomatic irritants by leaving
sovereign immunity decisions exclusively to
the courts. Under current American practice,
a foreign government has the option of asking
the Department of State to decide questions of
sovereign immunity. If it exercises this option,
the foreign state can bring diplomatic influences
to bear, thereby converting an ordinary lawsuit
into a diplomatic irritant. By contrast, when
the United States is sued abroad, we cannot
refer sovereign immunity issues to a Ministry
of Foreign Affairs, but must litigate these issues
exclusively in foreign courts. Thus, H.R. 11315
will offer foreign states the same legal remedies
that are offered in other countries.
- It would for the first time, provide a statutory
procedure for making service of process on a
foreign state or its entities. Such procedures
have long existed in other countries.
- It would preclude the commencement of a lawsuit
by seizing foreign government property, a
practice which has caused diplomatic problems
in the past. But the bill does provide a
method whereby a private litigant can, under
court direction and as a last resort, satisfy
a final judgment by executing on commercial property
owned by a foreign state.
LIBRARY
- 3 -
The legislation will not increase budgetary costs
within the Executive Branch. Indeed, by transferring
immunity decisions to the courts, H.R. 11315 will save
man-hours now spent by the Departments of State and
Justice on sovereign immunity cases. And a court
already familiar with a lawsuit can more efficiently
decide a sovereign immunity defense raised in that
lawsuit.
Attached for your consideration, is a proposed
signing statement for the President. Since this legis-
lation marks a significant step in the longstanding
commitment of the United States to international order
under law, we believe that a signing statement would
be appropriate.
Sincerely,
Kempen B. Junk
Kempton B
Acting Assistant Secretary
for Congressional Relations
Attachment:
Proposed Signing Statement
ADMINISTRATIVE OFFICE OF THE
UNITED STATES COURTS
SUPREME COURT BUILDING
WASHINGTON, D.C. 20544
ROWLAND F. KIRKS
DIRECTOR
October 15, 1976
WILLIAM E. FOLEY
DEPUTY DIRECTOR
Mr. James M. Frey
Assistant Director for
Legislative Reference
Office of Management and Budget
Washington, D. C. 20503
Dear Mr. Frey:
This is in response to your enrolled bill
request of October 14, 1976 transmitting for views
and recommendations H.R. 11315, "To define the juris-
diction of United States courts in suits against
foreign states, the circumstances in which foreign
states are immune from suit and in which execution
may not be levied on their property, and for other
purposes."
In considering this legislation the Judicial
Conference of the United States proposed a change in
the venue section which has not been incorporated
but no objection is interposed to executive approval
of H.R. 11315.
Sincerely,
William Deputy Director E. E. Foley
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
10
Date: October 19
Time:
200pm
FOR ACTION: NSC on
CC (for information): Jack Marsh
Max Friedersdorf
Ed Schmults
Bobbie Kilberg agreeu/OMB agree
Dick Parsons
Steve McConahey def
Robert Hartmann
on
FROM THE STAFF SECRETARY
DUE: Date: October 20
Time: 1000mm
SUBJECT:
H.R.11315-Foreign Soverign Immunities Act of 1976
S.3553-Foreign Sovereigh Immunities Act of 1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X For Your Comments
Draft Remarks
REMARKS:
pleaee return to judd öbhaston, ground floor west wing
TOTAL
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
K. R. COLE, JR.
telephone the Staff Secretary immediately.
For the President
10/19/76 - 3:30 pm
n
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
10
Date: October 19
Time:
200pm
FOR ACTION: NSC
cc (for information): Jack Marsh
Max Friedersdorf
Ed Schmults
Bobbie Kilberg
Steve McConahey
Dick Parsons
Robert Hartmann
FROM THE STAFF SECRETARY
DUE: Date: October 20
Time: 1000am
SUBJECT:
H.R.11315-Foreign Soverign Immunities Act of 1976
S.3553-Foreign Sovereign Immunities Act of 1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
10/19/76 - Copy sent for researching. nm
10/20/76 - Recearched copy returned. nm
House bill
STATE R. FORD CIBRARY
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
tyor use President
James M. Cannoms
SIGNING STATEMENT
H.R. 11315
It is with great satisfaction that I announce today
the signing of the Foreign Sovereign Immunities Act of
1976. This legislation, proposed by my Administration,
continues the longstanding commitment of the United
States to seek a stable international order under law.
It has often been said that the development of an
international legal order occurs only through small but
carefully considered steps. The Foreign Sovereign Im-
munities Act of 1976X which I sign today is such a step.
This legislation will enable American citizens and
foreign governments alike to ascertain when a foreign state
can be sued in our courts. In this modern world where
private citizens increasingly come into contact with
foreign government activities, it is important to know
when the courts are available to redress legal grievances.
This statute will also make it easier for our citizens
and foreign governments to turn to the courts to resolve
ordinary legal disputes. In this respect, the Foreign
Sovereign Immunities Act carries forward a modern and en-
lightened trend in international law. And it makes this
development in the law available to all American citizens.
MEMORANDUM OF DISAPPROVAL
I am withholding my approval from S. 3553, the Foreign
Sovereign Immunities Act of 1976, for technical reasons.
In its haste to adjourn, the Congress passed identical
Senate and House bills on this subject. At the time the
Senate passed the House bill, H.R. 11315, it attempted
to vacate its earlier passage of S. 3553 but was unable
to do so because it had left the Senate's jurisdiction.
The House, unaware that the Senate had passed the House
bill, also passed the Senate bill.
In view of the Senate's action in attempting to vacate
its passage of S. 3553, there is doubt that S. 3553 has
been properly enrolled, and therefore I am separately
approving H.R. 11315 and must withhold my approval from
S. 3553.
other
THE WHITE HOUSE
October , 1976
10/19/76 - 3:30 pm
n
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
10
Date: October 19
Time:
200pm
FOR ACTION: NSC
cc (for information): Jack Marsh
Max Friedersdorf
Ed Schmults
Bobbie Kilberg
Q20
Steve McConahey
Dick Parsons
Robert Hartmann
to 10/20 Res
9:25
GAn
to DUS 10/20 smokfine
to
FROM THE STAFF SECRETARY
DUE: Date: October 20
Time: 1000am
SUBJECT:
H.R.11315-Foreign Soverign Immunities Act of 1976
S.3553-Foreign Sovereign Immunities Act of 1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
For the President
James M. Cannom
"
06/jme
SIGNING STATEMENT
H.R. 11315
It is with great satisfaction oh that I announce today
the signing of the Foreign Sovereign Immunities Act of
1976. This legislation, proposed by my Administration,
continues the longstanding commitment of the United
States to seek a stable international order under law.
It has often been said that the development of an
international legal order occurs only through small but
carefully considered steps. The Foreign Sovereign Im-
munities Act of 1976, which I sign today, is such a step.
of
This legislation will enable American citizens and
foreign governments alike to ascertain when a foreign state
can be sued in our courts. In this modern world where
private citizens increasingly come into contact with
foreign government activities, it is important to know
when the courts are available to redress legal grievances.
This statute will also make it easier for our citizens
and foreign governments to turn to the courts to resolve
ordinary legal disputes. In this respect, the Foreign
Sovereign Immunities Act carries forward a modern and en-
lightened trend in international law. And it makes this
development in the law available to all American citizens.
MEMORANDUM OF DISAPPROVAL
ok
I am withholding my approval from S. 3553, the Foreign
Oh
Sovereign Immunities Act of 1976, for technical reasons.
In its haste to adjourn, the Congress passed identical
Senate and House bills on this subject. At the time the
Senate passed the House bill, H.R. 11315, it attempted
to vacate its earlier passage of S. 3553 but was unable
to do so because it had left the Senate's jurisdiction.
The House, unaware that the Senate had passed the House
bill, also passed the Senate bill.
In view of the Senate's action in attempting to vacate
its passage of S. 3553, there is doubt that S. 3553 has
been properly enrolled, and therefore I am separately
approving H.R. 11315 and must withhold my approval from
S. 3553. Ob
THE WHITE HOUSE
October , 1976
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
106
10
Date:
Time:
October 19
200pm
FOR ACTION: NSC
cc (for information): Jack Marsh
Max Friedersdorf
Ed Schmults
Bobbie Kilberg
Steve McConahey
Dick Parsons
Robert Hartmann
FROM THE STAFF SECRETARY
DUE: Date: October 20
Time: 1000am
SUBJECT:
H.R.11315-Foreign Soverign Immunities Act of 1976
S.3553-Foreign Sovereign Immunities Act of 1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
Concur in OMB's recommendation.
Ken Lazarus 10/19/76
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
for the President
James M. Cannows:
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
10
Date: October 19
Time:
200pm
FOR ACTION: NSC
cc (for information): Jack Marsh
Max Friedersdorf
Ed Schmults
Bobbie Kilberg
Steve McConahey
Dick Parsons
Robert Hartmann
FROM THE STAFF SECRETARY
DUE: Date: October 20
Time: 1000am
SUBJECT:
H.R.11315-Foreign Soverign Immunities Act of 1976
S.3553-Foreign Sovereign Immunities Act of 1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X For Your Comments
Draft Remarks
REMARKS: Approve H.R.11315; pocket veto S.3553.
please return to judy johnston, ground floor west wing
Rt
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
tyor the President
James M. Cannors:
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
10
0660
Date: October 19
Time:
200pm
18b
FOR ACTION: NSC
CC (for information): Jack Marsh
Max Friedersdorf
Ed Schmults
Bobbie Kilberg
Steve McConahey
Dick Parsons
Robert Hartmann
FROM THE STAFF SECRETARY
DUE: Date: October 20
Time: 1000am
SUBJECT:
H.R.11315-Foreign Soverign Immunities Act of 1976
S.3553-Foreign Sovereign Immunities Act of 1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
Rummand approval of
/d.R. 11315, disappravar
M S.3553.
Bup
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
For the President
James M. Cannows:
MEMORANDUM
#5825
NATIONAL SECURITY COUNCIL
October 20, 1976
MEMORANDUM FOR:
JAMES M. CANNON
FROM:
Jeanne W. Davis WH
for
SUBJECT:
Enrolled Bills
H.R. 11315 and S. 3553
The NSC staff concurs in the proposed enrolled bill
H.R. 11315-Foreign Sovereign Immunities Act of 1976,
and concurs in OMB's disapproval of S. 3553-Foreign
Sovereign Immunities Act of 1976.
STATEMENT BY THE PRESIDENT
It is with great satisfaction that I announce today
the signing of H.R. 11315, the Foreign Sovereign Immunities
Act of 1976. This legislation, proposed by my Administration,
continues the longstanding commitment of the United States
to seek a stable international order under the law.
It has often been said that the development of an
international legal order occurs only through small but
carefully considered steps. The Foreign Sovereign
Immunities Act of 1976 which I sign today is such a step.
This legislation will enable American citizens and
foreign governments alike to ascertain when a foreign state
can be sued in our courts. In this modern world where
private citizens increasingly come into contact with foreign
government activities, it is important to know when the
courts are available to redress legal grievances.
This statute will also make it easier for our citizens
and foreign governments to turn to the courts to resolve
ordinary legal disputes. In this respect, the Foreign
Sovereign Immunities Act carries forward a modern and
enlightened trend in international law. And it makes this
development in the law available to all American citizens.
SIGNING STATEMENT
H.R. 11315
It is with great satisfaction that I announce today
the signing of the Foreign Sovereign Immunities Act of
1976. This legislation, proposed by my Administration,
continues the longstanding commitment of the United
States to seek a stable international order under law.
It has often been said that the development of an
international legal order occurs only through small but
carefully considered steps. The Foreign Sovereign Im-
munities Act of 1976, which I sign today, is such a step.
This legislation will enable American citizens and
foreign governments alike to ascertain when a foreign state
can be sued in our courts. In this modern world where
private citizens increasingly come into contact with
foreign government activities, it is important to know
when the courts are available to redress legal grievances.
This statute will also make it easier for our citizens
and foreign governments to turn to the courts to resolve
ordinary legal disputes. In this respect, the Foreign
Sovereign Immunities Act carries forward a modern and en-
lightened trend in international law. And it makes this
development in the law available to all American citizens.
SIGNING STATEMENT
H.R. 11315
It is with great satisfaction that I announce today
the signing of the Foreign Sovereign Immunities Act of
1976. This legislation, proposed by my Administration,
continues the longstanding commitment of the United
States to seek a stable international order under law.
It has often been said that the development of an
international legal order occurs only through small but
carefully considered steps. The Foreign Sovereign Im-
munities Act of 1976X which I sign today, is such a step.
This legislation will enable American citizens and
foreign governments alike to ascertain when a foreign state
can be sued in our courts. In this modern world where
private citizens increasingly come into contact with
foreign government activities, it is important to know
when the courts are available to redress legal grievances.
This statute will also make it easier for our citizens
and foreign governments to turn to the courts to resolve
ordinary legal disputes. In this respect, the Foreign
Sovereign Immunities Act carries forward a modern and en-
lightened trend in international law. And it makes this
development in the law available to all American citizens.
STATEMENT BY THE PRESIDENT
It is with great satisfaction that I announce today
H.R. 11315,
the signing of the Foreign Sovereign Immunities Act of
1976. This legislation, proposed by my Administration,
continues the longstanding commitment of the United States
to seek a stable international order under law.
It has often been said that the development of an
international legal order occurs only through small but
carefully considered steps. The Foreign Sovereign
Immunities Act of 1976 which I sign today is such a step.
This legislation will enable American citizens and
foreign governments alike to ascertain when a foreign state
can be sued in our courts. In this modern world where
private citizens increasingly come into contact with foreign
government activities, it is important to know when the
courts are available to redress legal grievances.
This statute will also make it easier for our citizens
and foreign governments to turn to the courts to resolve
ordinary legal disputes. In this respect, the Foreign
Sovereign Immunities Act carries forward a modern and
enlightened trend in international law. And it makes this
development in the law available to all American citizens.
FORD LIBRARY
94TH CONGRESS
}
HOUSE OF REPRESENTATIVES
REPORT
2d Session
No. 94-1487
JURISDICTION OF UNITED STATES COURTS IN SUITS
AGAINST FOREIGN STATES
SEPTEMBER 9, 1976.-Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
Mr. FLOWERS, from the Committee on the Judiciary,
submitted the following
REPORT
[Including cost estimate of the Congressional Budget Office]
[To accompany H.R. 11315]
The Committee on the Judiciary, to whom was referred the bill
(H.R. 11315) to define the jurisdiction of United States courts in
suits against foreign states, the circumstances in which foreign states
are immune from suit and in which execution may not be levied on
their property, and for other purposes, having considered the same,
report favorably thereon with amendments and recommend that the
bill do pass.
The amendments are as follows:
Page 1, line 4 : Strike "1975" and insert "1976".
Page 2, lines 11 and 12 Strike "of process."
Page 3, following line 13 : Strike "1606. Claims involving the public
debt. and insert "1606. Extent of liability.", and strike "1608. Service
of process; time to answer; default." and insert "1608. Service; time to
answer; default."
Page 4, line 16 : Strike "and" and insert "or."
Page 4, lines 12 and 13: Strike "sections 1606 and" and insert
"section".
Page 5, line 19 Strike "and future."
Page 5, line 20 : After "party" insert "at the time of enactment of
this Act".
Page 8, line 5 : Strike "service" and insert "delivery."
Page 8, line 9 : Strike "served," and insert "delivered,".
Page 8, line 10 : Strike "served" and insert "delivered."
Page 8, line 15 : Strike "service" and insert "delivery."
Page 8, line 18 After "days" insert "either."
Page 8, line 18: Strike "service of process" and insert "delivery of
notice."
Page 8, line 19 After "section" insert "or, in the case of a party who
was unaware that the vessel or cargo of a foreign state was involved,
2
3
of the date such party determined the existence of the foreign state's
'(B) by sending a copy of the summons and of the
interest."
complaint, together with a translation into the official lan-
Page 8, line 20 Strike "served" and insert "delivered."
guage of the foreign state, by any form of mail requiring
Page 9, after line 3: Insert 1606. Extent of Liability."
a signed receipt to be addressed and dispatched by the
Page 9, line 4: Strike (c)".
clerk of the court to the official in charge of the foreign
Page 9, lines 5 and 6: Strike "this section or under section 1606" and
affairs of the foreign state which is, or whose political
insert "section 1605".
subdivision is, named in the complaint; or
Page 9, lines 9 and 10 Strike "itself, as distinguished from a politi-
(3) if proof of service is not made within sixty days after
cal subdivision thereof or from" and insert "except for."
service has been initiated under paragraph (1) or (2) of this
Page 9, line 10: After "instrumentality" insert "thereof."
subsection, and if-
Page 9, lines 10, 11, and 12 Strike "of a foreign state, shall not be
(A) the claim for relief arises out of an activity or
liable in tort for interest prior to judgment or" and insert "shall not
act in the United States of a diplomatic or consular rep-
be liable."
resentative of the foreign state for which the foreign state
Page 9, lines 20 through 25 and page 10 lines 1 through 12 Strike
is not immune from jurisdiction under section 1605 of
this title, or
"§ 1606. Claims involving the public debt
(B) the foreign state uses diplomatic channels for
"(a) For purposes of this section, a 'foreign state' shall not include
service upon the United States or any other foreign
a political subdivision of a foreign state or an agency or instrumental-
state, or
ity of a foreign state.
"(C) the foreign state has not notified the Secretary
(b) Notwithstanding the provisions of section 1605 of this chapter,
of State prior to the institution of the proceeding in ques-
a foreign state shall be immune from the jurisdiction of the courts of
tion that it prefers that service not be made through
the United States and of the States in any case relating to debt obliga-
diplomatic channels,
tions incurred for general governmental purposes unless-
by sending two copies of the summons and of the complaint,
"(1) the foreign state has waived its immunity explicitly, not-
together with a translation into the official language of the
withstanding any withdrawal of the waiver which the foreign
foreign state, by any form of mail requiring a signed receipt
state may purport to effect except in accordance with the terms of
to be addressed and dispatched by the clerk of the court, to
the waiver; or
the Secretary of State at Washington, District of Columbia,
(2) the case arises under provisions codified as section 77a
to the attention of the Director of Special Consular Services,
through 80b-21 of title 15, United States Code, as amended, or
and the Secretary shall send one copy through diplomatic
any other statute which may hereafter be administered by the
channels to the foreign state and shall send a certified copy of
United States Securities and Exchange Commission.
the diplomatic note to the clerk of the court in which the
Page 10, line 19 Strike "sections 1605 and 1606" and insert "section
action is pending. The Secretary shall maintain and publish
1605".
in the Federal Register a list of foreign states upon which
Page 11, line 3: Strike "of process".
service may be made under subparagraphs (B) and (C) of
Page 11, lines 4 through 25; page 12, lines 1 through 25; page 13,
this paragraph, and such list shall be conclusive for purposes
lines 1 through 25 page 14, lines 1 through 24; page 15, lines 1 through
of subparagraphs (B) and (C)
24; page 16, lines 1 through 9; strike:
(b) service in the courts of the United States and of the States
"Subject to existing and future international agreements to which
shall be made upon an agency or instrumentality of a foreign
the United States is a party-
state:
"(a) service in the courts of the United States and of the States
"(1) by delivering a copy of the summons and of the com-
shall be made upon a foreign state or political subdivision of a
plaint in accordance with any special arrangement for service
foreign state:
between the plaintiff and the agency or instrumentality or
"(1) by delivering a copy of the summons and of the com-
"(2) if no special arrangement exists, by delivering a copy
plaint in accordance with any special arrangement for service
of the summons and of the complaint to an officer, a manag-
between the plaintiff and the foreign state or political subdi-
ing or general agent or to any other agent authorized by ap-
vision; or
pointment or by law to receive service of process in the United
(2) if no special arrangement exists, and if service is
States; or
reasonably calculated to give actual notice-
" (3) if service cannot be made under paragraph (1) or (2)
"(A) by service of a copy of the summons and of the
of this subsection, and if service is reasonably calculated to
complaint, together with a translation into the official
give actual notice-
language of the foreign state, as directed by an authority
"(A) by service of a copy of the summons and of the
of the foreign state or of the political subdivision in re-
complaint, together with a translation into the official
sponse to a letter rogatory or request, or
language of the foreign state, as directed by an authority
4
5
of the foreign state or of a political subdivision in re-
(3) if service cannot be made under paragraphs (1)
sponse to a letter rogatory or request, or
or (2), by sending a copy of the summons and complaint
"(B) by sending a copy of the summons and of the
and a notice of suit, together with a translation of each
complaint, together with a translation into the official
into the official language of the foreign state, by any form
language of the foreign state, by any form of mail re-
of mail requiring a signed receipt, to be addressed and
quiring a signed receipt, to be addressed and dispatched
dispatched by the clerk of the court to the head of the
by the clerk of the court to the agency or instrumentality
ministry of foreign affairs of the foreign state concerned,
to be served, or
or
"(C) as directed by order of the court consistent with
(4) if service cannot be made within 30 days under
the law of the place where service is to be made;
paragraph (3), by sending two copies of the summons
(c) for the purposes of this section, service of process shall be
and complaint and a notice of suit, together with a trans-
deemed to have been made-
lation of each into the official language of the foreign
"(1) in the case of subsections (a) (1) and (b) (1), when
state, by any form of mail requiring a signed receipt, to
ment; delivered in accordance with the terms of the special arrange-
be addressed and dispatched by the clerk of the court to
the Secretary of State in Washington, District of Colum-
(2) in the case of subsections (a) (2) (A) and (b) (3) (A),
bia, to the attention of the Director of Special Consular
when delivered as directed by an authority of the foreign
Services-and the Secretary shall transmit one copy of
state or political subdivision;
the papers through diplomatic channels to the foreign
(3) in the case of subsections (a) (2) (B) and (b) (3) (B),
state and shall send to the clerk of the court a certified
when received abroad by mail, as evidenced by the returned,
copy of the diplomatic note indicating when the papers
signed receipt;
were transmitted.
(4) in the case of subsection (b) (2), when delivered to
As used in this subsection, a 'notice of suit' shall mean a notice
an officer, managing or general agent or appointed agent in
addressed to a foreign state and in a form prescribed by the
the United States;
Secretary of State by regulation.
(5) in the case of subsection (a) (3), when sent through
(b) Service in the courts of the United States and of the
diplomatic channels, as evidenced by a certified copy of the
States shall be made upon an agency or instrumentality of a
diplomatic note of transmittal;
foreign state:
" (6) in the case of subsection (b) (3) (C), when served as
(1) by delivery of a copy of the summons and com-
directed by order of the court;
plaint in accordance with any special arrangement for
'(d) in any action brought in a court of the United States or
service between the plaintiff and the agency or instru-
of a State, a foreign state, a political subdivision thereof, or an
mentality; or
agency or instrumentality of a foreign state shall serve an answer
(2) if no special arrangement exists, by delivery of a
or other responsive pleading to the complaint or to a cross-claim,
copy of the summons and complaint either to an officer,
or a reply to a counterclaim, within sixty days after the service of
a managing or general agent or to any other agent author-
the pleading in which a claim is asserted; and
ized by appointment or by law to receive service of
(e) no judgment by default shall be entered by a court of the
process in the United States; or in accordance with an
United States or of a State against a foreign state, a political sub-
applicable international convention on service of judicial
division thereof, or an agency or instrumentality of a foreign
documents; or
state, unless the claimant establishes his claim or right to relief
(3) if service cannot be made under paragraphs (1)
by evidence satisfactory to the court. A copy of any such default
or (2), and if reasonably calculated to give actual notice,
judgment shall be sent to the foreign state or political subdivi-
by delivery of a copy of the summons and complaint,
sion in the manner prescribed for service of process in this section."
together with a translation of each into the official lan-
and insert:
guage of the foreign state-
(a) Service in the courts of the United States and of the
(A) as directed by an authority of the foreign
States shall be made upon a foreign state or political sub-
state or political subdivision in response to a letter
division of a foreign state:
rogatory or request, or
(1) by delivery of a copy of the summons and com-
(B) by any form of mail requiring a signed re-
plaint in accordance with any special arrangement for
ceipt, to be addressed and dispatched by the clerk
service between the plaintiff and the foreign state or
of the court to the agency or instrumentality to be
political subdivision; or
served, or
(2) if no special arrangement exists, by delivery of a
(C) as directed by order of the court consistent
copy of the summons and complaint in accordance with
with the law of the place where service is to be
an applicable international convention on service of judi-
made.
cial documents; or
6
7
(c) Service shall be deemed to have been made-
foreign state trading company, and disputes may arise concerning the
(1) in the case of service under subsection (a) (4), as
purchase price. Another is when an American property owner agrees
of the date of transmittal indicated in the certified copy
to sell land to a real estate investor that turns out to be a foreign gov-
of the diplomatic note; and
ernment entity and conditions in the contract of sale may become a sub-
(2) in any other case under this section, as of the date
ject of contention. Still another example occurs when a citizen crossing
of receipt indicated in the certification, signed and re-
the street may be struck by an automobile owned by a foreign embassy.
turned postal receipt, or other proof of service applicable
At present, there are no comprehensive provisions in our law avail-
to the method of service employed.
able to inform parties when they can have recourse to the courts to
(d) In any action brought in a court of the United States
assert a legal claim against a foreign state. Unlike other legal systems,
or of a State, a foreign state, a political subdivision thereof,
U.S. law does not afford plaintiffs and their counsel with a means to
or an agency or instrumentality of a foreign state shall serve
commence a suit that is specifically addressed to foreign state defend-
an answer or other responsive pleading to the complaint
ants. It does not provide firm standards as to when a foreign state may
within sixty days after service has been made under this
validly assert the defense of sovereign immunity; and, in the event a
section.
plaintiff should obtain a final judgment against a foreign state or one
(e) No judgment by default shall be entered by a court of
of its trading companies, our law does not provide the plaintiff with
the United States or of a State against a foreign state, a
any means to obtain satisfaction of that judgment through execution
political subdivision thereof, or an agency or instrumentality
against ordinary commercial assets.
of a foreign state, unless the claimant establishes his claim or
In a modern world where foreign state enterprises are every day
right to relief by evidence satisfactory to the court. A copy
participants in commercial activities, H.R. 11315 is urgently needed
of any such default judgment shall be sent to the foreign
legislation. The bill, which has been drafted over many years and
state or political subdivision in the manner prescribed for
which has involved extensive consultations within the administra-
service in this section.
tion, among bar associations and in the academic community, would
Page 16, line 12: Strike "and future".
accomplish four objectives:
Page 16, line 13: After "party" insert "at the time of enact-
First, the bill would codify the so-called "restrictive" principle of
ment of this Act".
sovereign immunity, as presently recognized in international law.
Page 16, line 15: Strike "and from" and insert "arrest and".
Under this principle, the immunity of a foreign state is "restricted" to
Page 20, line 1: Strike "impending" and insert "impeding".
suits involving a foreign state's public acts (jure imperii) and does
not extend to suits based on its commercial or private acts (jure ges-
PURPOSE
tionis). This principle was adopted by the Department of State in
1952 and has been followed by the courts and by the executive branch
The purpose of the proposed legislation, as amended, is to provide
ever since. Moreover, it is regularly applied against the United States
when and how parties can maintain a lawsuit against a foreign state
in suits against the U.S. Government in foreign courts.
or its entities in the courts of the United States and to provide when
Second, the bill would insure that this restrictive principle of im-
a foreign state is entitled to sovereign immunity.
munity is applied in litigation before U.S. courts. At present, this is
not always the case. Today, when a foreign state wishes to assert im-
STATEMENT
munity, it will often request the Department of State to make a for-
mal suggestion of immunity to the court. Although the State Depart-
The bill H.R. 11315 was introduced in accordance with the recom-
ment espouses the restrictive principle of immunity, the foreign state
mendations of an executive communication transmitted to the Con-
may attempt to bring diplomatic influences to bear upon the State De-
gress by the Departments of State and Justice, and both Departments
partment's determination. A principal purpose of this bill is to trans-
recommend its enactment with the amendments recommended in this
fer the determination of sovereign immunity from the executive
report. The bill was the subject of hearings on June 2, 1976 and June
branch to the judicial branch, thereby reducing the foreign policy im-
4, 1976 before this Committee's Subcommittee on Administrative Law
plications of immunity determinations and assuring litigants that
and Governmental Relations. The amendments recommended to the
these often crucial decisions are made on purely legal grounds and
bill are the result of matters discussed at those hearings and further
under procedures that insure due process. The Department of State
developed in consultation with representatives of the Departments of
would be freed from pressures from foreign governments to recog-
State and Justice.
nize their immunity from suit and from any adverse consequences
At the hearings on the bill it was pointed out that American citizens
resulting from an unwillingness of the Department to support that
are increasingly coming into contact with foreign states and entities
immunity. As was brought out in the hearings on the bill, U.S. im-
owned by foreign states. These interactions arise in a variety of cir-
munity practice would conform to the practice in virtually every
cumstances, and they call into question whether our citizens will have
other country-where sovereign immunity decisions are made exclu-
access to the courts in order to resolve ordinary legal disputes. In-
sively by the courts and not by a foreign affairs agency.
stances of such contact occur when U.S. businessmen sell goods to a
8
9
Third, this bill would for the first time in U.S. law, provide a stat-
From the standpoint of the private litigant, considerable uncer-
utory procedure for making service upon, and obtaining in personam
tainty results. A private party who deals with a foreign government
jurisdiction over, a foreign state. This would render unnecessary the
entity cannot be certain that his legal dispute with a foreign state
practice of seizing and attaching the property of a foreign govern-
will not be decided on the basis of nonlegal considerations through the
ment for the purpose of obtaining jurisdiction.
foreign government's intercession with the Department of State.
Fourth, the bill would remedy, in part, the present predicament of
a plaintiff who has obtained a judgment against a foreign state. Under
THE UNITED STATES IN FOREIGN COURTS
existing law, a foreign state in our courts enjoys absolute immunity
from execution, even in ordinary commercial litigation where com-
Since World War II, the United States has increasingly become
mercial assets are available for the satisfaction of a judgment. H.R.
involved in litigation in foreign courts. This litigation has involved
11315 seeks to restrict this broad immunity from execution. It would
such diverse activities as the purchase of goods and services by our
conform the execution immunity rules more closely to the jurisdic-
embassies, employment of local personnel by our military bases, the
tion immunity rules. It would provide the judgment creditor some
construction or lease of buildings for our foreign missions, and traffic
remedy if, after a reasonable period, a foreign state or its enterprise
accidents involving U.S. Government-owned vehicles.
failed to satisfy a final judgment.
In the mid-1950's, when the United States first became involved
in foreign suits on a large scale, foreign counsel retained by the De-
BACKGROUND
partment of Justice were instructed to plead sovereign immunity in
almost every instance. However, the executive branch learned that
Sovereign immunity is a doctrine of international law under which
almost every country in Western Europe followed the restrictive
domestic courts, in appropriate cases, relinquish jurisdiction over a
principle of sovereign immunity and the Government's pleas of im-
foreign state. It differs from diplomatic immunity (which is drawn
munity were routinely denied in tort and contract cases where the
into issue when an individual diplomat is sued). H.R. 11315 deals
necessary contacts with the forum were present. Thus, in the 1960's,
solely with sovereign immunity.
it became the practice of the Department of Justice to avoid claiming
Sovereign immunity as a doctrine of international law was first
immunity when the United States was sued in countries that had
recognized in our courts in the landmark case of The Schooner Ex-
adopted the restrictive principle of immunity, but to invoke immunity
change V. M'Faddon, 7 Cranch 116 (1812). There, Chief Justice Mar-
in those remaining countries that still held to the absolute immunity
shall upheld a plea of immunity, supported by an executive branch
doctrine. Beginning in the early 1970's, it became the consistent prac-
suggestion, by noting that a recognition of immunity was supported
tice of the Department of Justice not to plead sovereign immunity
by the law and practice of nations. In the early part of this century,
abroad in instances where, under the Tate letter standards, the De-
the Supreme Court began to place less emphasis on whether immunity
partment would not recognize a foreign state's immunity in this
was supported by the law and practice of nations, and relied instead
country.
on the practices and policies of the State Department. This trend
In virtually every country, the United States has found that sov-
reached its culmination in Ex Parte Peru, 318 U.S. 578 (1943) and
ereign immunity is a question of international law to be determined
Mexico V. Hoffman, 324 U.S. 30 (1945).
by the courts. The United States cannot take recourse to a foreign
Partly in response to these decisions and partly in response to de-
affairs agency abroad as other states have done in this country when
velopments in international law, the Department of State adopted the
they seek a suggestion of immunity from the Department of State.
restrictive principle of sovereign immunity in its "Tate Letter" of
1952, 26 Department of State Bulletin 984. Thus, under the Tate
HISTORY OF THE BILL
letter, the Department undertook, in future sovereign immunity de-
terminations, to recognize immunity in cases based on a foreign state's
H.R. 11315 is the product of many years of work by the Depart-
public acts, but not in cases based on commercial or private acts. The
ments of State and Justice, in consultation with members of the bar
Tate letter, however, has posed a number of difficulties. From a legal
and the academic community. Study of possible legislation began in
standpoint, if the Department applies the restrictive principle in a
the mid-1960's. In the early 1970's, a number of draft bills were pre-
given case, it is in the awkward position of a political institution
pared and submitted for comment to many authorities and practi-
trying to apply a legal standard to litigation already before the courts.
tioners in the international law field. On January 31, 1973, a bill
Moreover, it does not have the machinery to take evidence, to hear
(H.R. 3493) was introduced in the 93d Congress, and referred to the
witnesses, or to afford appellate review.
Committee on the Judiciary. The bill H.R. 3493 was the subject
From a foreign relations standpoint, the initiative is left to the
of a subcommittee hearing on June 7, 1973. Although extensive advice
foreign state. The foreign state chooses which sovereign immunity de-
had already been obtained from the private sector, in the course of
terminations it will leave to the courts, and which it will take to the
the subcommittee's consideration it became apparent that a few seg-
State Department. The foreign state also decides when it will attempt
ments of the private bar had not been fully consulted. It was pointed
to exert diplomatic influences, thereby making it more difficult for the
out that the 93d Congress bill contained some technical deficiencies
State Department to apply the Tate letter criteria.
which could be remedied-particularly with respect to maritime cases
and the jurisdictional provisions. The American Bar Association at
H. Rept. 94-1487 2
11
10
the August 1976 meeting of its House of Delegates adopted a resolu-
4. Section 1608 has been substantially revised, with the principal
tion urging approval of H.R. 11315. The letter of that association
revisions being in subsection (a). A number of bar association studies
indicating its support is set out at the end of this report.
which otherwise expressed full support for the bill, pointed out that
The current bill, H.R. 11315, contains revised language. It is essen-
subsection (a), as previously drafted, created a significant gap in its
tially the same bill as was introduced in 1973, except for the technical
provisions concerning service upon a foreign state through diplomatic
improvements that have been made in the interim.
channels. The Departments of Justice and State have reconsidered
this provision and have indicated their preference for the revised
COMMITTEE AMENDMENTS
language in the committee amendment. The committee has revised
subsection (a) to fill the prior gap, and, at the same time, to minimize
The committee, after careful consideration of the bill, made the
potential irritants to relations with foreign states. Subsection (a),
following amendments:
as revised, would provide that service of a summons and complaint
1. In sections 1604 and 1609 of the bill, the committee has preserved
also be accompanied by a new document, called a notice of suit. The
the reference to "existing international agreements" but has deleted
notice of suit is designed to provide a foreign state with an introduc-
the language that would make this bill subject to "future" agreements.
tory explanation of the lawsuit, together with an explanation of the
Mention of future agreements was found to be unnecessary and mis-
legal significance of the summons, complaint, and service.
leading. The purpose for including the reference was to take into
The revised paragraphs (a) (2) and (b) (2) of section 1608 give
account the possibility that sovereign immunity might become the
emphasis to service under an "applicable international convention on
subject of an international convention. Such a convention would,
service of judicial documents." At present, there is such an applicable
under article VI of the Constitution, take precedence, whether or not
international convention-the Hague Convention on Service Abroad
the bill was made expressly subject to a future international agree-
of Judicial and Extrajudicial Documents, TIAS 6638, 20 UST 361-
ment. Moreover, it was thought best to eliminate any possible question
to which the Senate gave its advice and consent to ratification, and
that this language might be construed to authorize a future interna-
which entered into force for the United States in 1969. At present
tional agreement. However, the reference to existing international
18 nations are parties to this convention. In the committee's view, if
agreements is essential to make it clear that this bill would not
a country has entered into such an international convention, priority
supersede the special procedures provided in existing international
should be given to this method for service.
agreements, such as the North Atlantic Treaty-Status of Forces
Subsection (d) has been revised to delete the references to cross-
Agreement.
claims and counterclaims. The existence of a counterclaim against
2. Section 1606, relating to public debt obligations, has been deleted
a foreign state indicates that the foreign state has already entered
and the former section 1605 (c) has been renumbered as section 1606.
an appearance in the lawsuit; thus, there is no necessity for affording
The public debt provision was, at best, very limited. It applied only
the foreign state with a special time period in which to respond to a
to debt obligations incurred "for general governmental purposes." It
counterclaim. When a cross-claim is filed against a foreign state, rules
did not apply to debts incurred either for specific government projects
19 and 20, of the Federal Rules of Civil Procedure, require that
(such as the building of a dam) or to further a commercial activity.
original service be made. Under rules the bill, this would mean service
In practice, the provision would have had virtually no effect because
under section 1608 (a) or (b).
U.S. underwriters of foreign government bonds and U.S. banks lend-
5. Finally, your committee has made a few perfecting amendments
ing to foreign governments would invariably include an express waiver
in the bill's provisions involving maritime jurisdiction. These include
of immunity in the debt instrument. Moreover, both a sale of bonds to
changes in section 1605 (b) to make it clear that the delivery of notice
the public and a direct loan from a U.S. commercial bank to a foreign
to a master of a vessel under paragraph (1) does not itself constitute
government are activities which are of a commercial nature and should
"service"; and to make clear, in cases where the plaintiff is unaware
be treated like other similar commercial transactions. Such commer-
that he has arrested a foreign state-owned vessel, that the 10-day
cial activities would not otherwise give rise to immunity and would
period in paragraph (2) does not begin to run until the plaintiff has
be subject to U.S. regulation, such as that provided by the securities
determined that a foreign state owns the vessel. Section 1609 has been
laws. Thus, on reconsideration of all of the factors, the committee
amended to make it clear that it applies to arrests of a vessel, as well
has concluded that a public debt provision would serve no significant
as to attachment and execution.
purpose and would be inappropriate.
3. Former section 1605 (c), renumbered as section 1606, has also been
CONCLUSION
revised in two other respects. First, it makes clear that the exception
for punitive damages applies to political subdivisions of foreign states,
On the basis of the facts outlined in the executive communication
as well as to the foreign state itself. This accords with current inter-
and the testimony at the hearings on the bill, the committee finds that
national practice. Second, it would eliminate the exception for interest
there is a clearly defined need for the enactment of these provisions
prior to judgment. Such an exception is not supported by international
into law. It is recommended that the amended bill be approved.
practice. If a foreign state is not immune from suit, it should be liable
for interest to the same extent as a private party.
12
13
SECTION-BY-SECTION ANALYSIS
provides a comprehensive jurisdictional scheme in cases involving
This bill, entitled the "Foreign Sovereign Immunities Act of 1976,"
foreign states. Such broad jurisdiction in the Federal courts should
sets forth the sole and exclusive standards to be used in resolving ques-
be conducive to uniformity in decision, which is desirable since a dis-
tions of sovereign immunity raised by foreign states before Federal and
parate treatment of cases involving foreign governments may have
State courts in the United States. It is intended to preempt any other
adverse foreign relations consequences. Plaintiffs, however, will have
State or Federal law (excluding applicable international agreements)
an election whether to proceed in Federal court or in a court of a
for according immunity to foreign sovereigns, their political subdi-
State, subject to the removal provisions of section 6 of the bill.
visions, their agencies, and their instrumentalities. It is also designed
(a) Subject Matter Jurisdiction.-Section 1330(a) gives Federal
to bring U.S. practice into conformity with that of most other nations
district courts original jurisdiction in personam against foreign states
by leaving sovereign immunity decisions exclusively to the courts,
(defined as including political subdivisions, agencies, and instrumen-
thereby discontinuing the practice of judicial deference to "suggestions
talities of foreign states). The jurisdiction extends to any claim with
of immunity" from the executive branch. (See Ex Parte Peru, 318
respect to which the foreign state is not entitled to immunity under
U.S. 578, 588-589 (1943).)
sections 1605-1607 proposed in the bill, or under any applicable inter-
The bill is not intended to affect the substantive law of liability.
national agreement of the type contemplated by the proposed section
Nor is it intended to affect either diplomatic or consular immunity, or
1604.
the attribution of responsibility between or among entities of a for-
As in suits against the U.S. Government, jury trials are excluded.
eign state; for example, whether the proper entity of a foreign state
See 28 U.S.C. 2402, Actions tried by a court without jury will tend to
has been sued, or whether an entity sued is liable in whole or in part
promote a uniformity in decision where foreign governments are
involved.
for the claimed wrong.
Aside from setting forth comprehensive rules governing sovereign
In addition, the jurisdiction of district courts in cases against for-
immunity, the bill prescribes: the jurisdiction of U.S. district courts
eign states is to be without regard to amount in controversy. This is
in cases involving foreign states, procedures for commencing a law-
intended to encourage the bringing of actions against foreign states in
suit against foreign states in both Federal and State courts, and cir-
Federal courts. Under existing law, the district courts have diversity
cumstances under which attachment and execution may be obtained
jurisdiction in actions in which foreign states are parties, but only
against the property of foreign states to satisfy a judgment against
where the amount in controversy exceeds $10,000. 28 U.S.C. (2)
and (3). (See analysis of sec. 3 of the bill, below.)
foreign states in both Federal and State courts.
Constitutional authority for enacting such legislation derives from
A judgment dismissing an action for lack of jurisdiction because
the constitutional power of the Congress to prescribe the jurisdiction
the foreign state is entitled to sovereign immunity would be determina-
of Federal courts (art. I, sec. 8, cl. 9; art. III, sec. 1) ; to define offenses
tive of the question of sovereign immunity. Thus, a private party,
who lost on the question of jurisdiction, could not bring the same
against the "Law of Nations" (art. I, sec. 8, cl. 10) ; to regulate com-
merce with foreign nations (art. I, sec. 8, cl. 3) ; and "to make all
case in a State court claiming that the Federal court's decision ex-
Laws which shall be necessary and proper for carrying into Execu-
tended only to the question of Federal jurisdiction and not to sover-
tion * * all * * F wers vested * * * in the Government of the
eign immunity.
United States," including the judicial power of the United States
(b) Personal Jurisdiction.-Section 1330(b) provides, in effect, a
over controversies between "a State, or the Citizens thereof, and for-
Federal long-arm statute over foreign states (including political sub-
divisions, agencies, and instrumentalities of foreign states). It is pat-
eign States * * *." (art. I, sec. 8, cl. 18; art. III, sec. 2, cl. 1). See
terned after the long-arm statute Congress enacted for the District of
National Bank V. Republic of China, 348 U.S. 356, 370-71 (1955)
Columbia. Public Law 91-358, sec. 132 (a), title I, 84 Stat. 549. The re-
(Reed J., dissenting) ; of. Banco Nacional de Cuba V. Sabbatino, 376
quirements of minimum jurisdictional contacts and adequate notice are
U.S. 398, 425 (1964).
The committee wishes to emphasize that this section-by-section
embodied in the provision. Cf. International Shoe Co. V. Washington,
326 U.S. 310 (1945), and McGee V. International Life Insurance Co.,
analysis supersedes the section-by-section analysis that accompanied
355 U.S. 220, 223 (1957). For personal jurisdiction to exist under sec-
the earlier version of the bill in the 93rd Congress (that is, S. 566 and
tion 1330 (b), the claim must first of all be one over which the district
H.R. 3493, 93d Cong., 1st sess.) ; the prior analysis should not be con-
courts have original jurisdiction under section 1330(a), meaning a
sulted in interpreting the current bill and its provisions, and no in-
claim for which the foreign state is not entitled to immunity. Signifi-
ferences should be drawn from differences between the two.
cantly, each of the immunity provisions in the bill, sections 1605-1607,
requires some connection between the lawsuit and the United States,
SEC. 2. JURISDICTION IN ACTIONS AGAINST FOREIGN STATES
or an express or implied waiver by the foreign state of its immunity
Section 2 of the bill adds a new section 1330 to title 28 of the
from jurisdiction. These immunity provisions, therefore, prescribe
United States Code, and provides for subject matter and personal
the necessary contacts which must exist before our courts can exercise
jurisdiction of U.S. district courts over foreign states and their
personal jurisdiction. Besides incorporating these jurisdictional con-
political subdivisions, agencies, and instrumentalities. Section 1330
tacts by reference, section 1330(b) also satisfies the due process re-
quirement of adequate notice by prescribing that proper service be
14
15
made under section 1608 of the bill. Thus, sections 1330 (b), 1608, and
Section 1603. Definitions
1605-1607 are all carefully interconnected.
Section 1603 defines five terms that are used in the bill:
(c) Effect of an Appearance.Section 1330(c) states that a mere
(a) Foreign state.Subsection (a) defines the term foreign state as
apperance by a foreign state in an action does not confer personal
used in all provisions of chapter 97, except section 1608. In section
jurisdiction with respect to claims which could not be brought as an
1608, the term "foreign state" refers only to the sovereign state itself.
independent action under this bill. The purpose is to make it clear
As the definition indicates, the term "foreign state" as used in every
that a foreign state does not subject itself to claims unrelated to the
other section of chapter 97 includes not only the foreign state but also
action solely by virtue of an appearance before a U.S. court. While
political subdivisions, agencies and instrumentalities of the foreign
the plaintiff is free to amend his complaint, he is not permitted to add
state. The term "political subdivisions" includes all governmental
claims for relief not based on transactions or occurrences listed in the
units beneath the central government, including local governments.
bill. The term "transaction or occurrence" includes each basis set forth
(b) Agency or instrumentality of a foreign state.Subsection (b)
in sections 1605-1607 for not granting immunity, including waivers.
defines an "agency or instrumentality of a foreign state" as any entity
(1) which is a separate legal person, (2) which is an organ of a for-
SEC. 3. DIVERSITY JURISDICTION AS TO FOREIGN STATES
eign state or of a political subdivision of a foreign state, or a majority
Section 3 of the bill amends those provisions of 28 U.S.C. 1332 which
of whose shares or other ownership interest is owned by a foreign
state or by a foreign state's political subdivision, and (3) which is nei-
relate to diversity jurisdiction of U.S. district courts over foreign
ther a citizen of a State of the United States as defined in 28 U.S.C.
states. Since jurisdiction in actions against foreign states is compre-
1332 and (d) nor created under the laws of any third country.
hensively treated by the new section 1330, a similar jurisdictional
The first criterion, that the entity be a separate legal person, is in-
basis under section 1332 becomes superfluous. The amendment deletes
tended to include a corporation, association, foundation, or any other
references to "foreign states" now found in paragraphs (2) and (3)
entity which, under the law of the foreign state where it was created,
of 28 U.S.C. 1332 (a), and adds a new paragraph (4) to provide for
can sue or be sued in its own name, contract in its own name or hold
diversity jurisdiction in actions brought by a foreign state as plaintiff.
property in its own name.
These changes would not affect the applicability of section 1332 to
The second criterion requires that the entity be either an organ of a
entities that are both owned by a foreign state and are also citizens
foreign state (or of a foreign state's political subdivision), or that a
of a state of the United States as defined in 28 U.S.C. 1332 (c) and
majority of the entity's shares or other ownership interest be owned
(d). See analysis to section (b).
by a foreign state (or by a foreign state's political subdivision). If such
entities are entirely owned by a foreign state, they would of course be
SEC. 4. NEW CHAPTER 97 : SOVEREIGN IMMUNITY PROVISIONS
included within the definition. Where ownership is divided between a
Section 4 of the bill adds a new chapter 97 to title 28, United States
foreign state and private interests, the entity will be deemed to be an
Code, which sets forth the legal standards under which Federal and
agency or instrumentality of a foreign state only if a majority of the
State courts would henceforth determine all claims of sovereign im-
ownership interests (shares of stock or otherwise) is owned by a for-
munity raised by foreign states and their political subdivisions, agen-
eign state or by a foreign state's political subdivision.
The third criterion excludes entities which are citizens of a State
cies, and instrumentalities. The specific sections of chapter 97 are as
follows:
of the United States as defined in 28 U.S.C. 1332 (c) and ex-
ample a corporation organized and incorporated under the laws of the
Section 1602. Findings and declaration of purpose
State of New York but owned by a foreign state. (See Amtorg Trad-
Section 1602 sets forth the central premise of the bill: That deci-
ing Corp. V. United States, 71 F. 2d 524 (C.C.P.A. 1934).) Also ex-
sions on claims by foreign states to sovereign immunity are best made
cluded are entities which are created under the laws of third countries.
by the judiciary on the basis of a statutory regime which incorporates
The rationale behind these exclusions is that if a foreign state acquires
standards recognized under international law.
or establishes a company or other legal entity in a foreign country,
Although the general concept of sovereign immunity appears to be
such entity is presumptively engaging in activities that are either com-
recognized in international law, its specific content and application
mercial or private in nature.
have generally been left to the courts of individual nations. There is,
An entity which does not fall within the definitions of sections 1603
however, a wide acceptance of the so-called restrictive theory of SOV-
(a) or (b) would not be entitled to sovereign immunity in any case
ereign immunity; that is, that the sovereign immunity of foreign
before a Federal or State court. On the other hand, the fact that an
states should be "restricted" to cases involving acts of a foreign state
entity is an "agency or instrumentality of a foreign state" does not in
which are sovereign or governmental in nature, as opposed to acts
itself establish an entitlement to sovereign immunity. A court would
which are either commercial in nature or those which private persons
have to consider whether one of the sovereign immunity exceptions
normally perform. This restrictive theory has been adhered to by the
contained in the bill (see sections 1605-1607 and 1610-1611) was
Department of State since the "Tate Letter" of May 19, 1952. (26
applicable.
Dept. of State Bull. 984 (1952).)
As a general matter, entities which meet the definition of an "agency
or instrumentality of a foreign state" could assume a variety of forms,
16
17
including a state trading corporation, a mining enterprise, a transport
organization such as a shipping line or airline, a steel company, a cen-
(e) Commercial activity carried on in the United States by a foreign
tral bank, an export association, a governmental procurement agency
state.-As paragraph (d) of section 1603 indicates, a commercial activ-
or a department or ministry which acts and is suable in its own name.
ity carried on in the United States by a foreign state would include not
(c) United States.-Paragraph (c) of section 1603 defines "United
only a commercial transaction performed and executed in its entirety
States" as including all territory and waters subject to the jurisdiction
in the United States, but also a commercial transaction or act having
of the United States.
a "substantial contact" with the United States. This definition includes
(d) Commercial activity.-Paragraph (c) of section 1603 defines the
cases based on commercial transactions performed in whole or in part
term "commercial activity" as including a broad spectrum of endeavor,
in the United States, import-export transactions involving sales to, or
from an individual commercial transaction or act to a regular course
purchases from, concerns in the United States, business torts occurring
of commercial conduct. A "regular course of commercial conduct" in-
in the United States (cf. § 1605 (5)), and an indebtedness incurred
cludes the carrying on of a commercial enterprise such as a mineral
by a foreign state which negotiates or executes a loan agreement in the
extraction company, an airline or a state trading corporation. Cer-
United States, or which receives financing from a private or public
tainly, if an activity is customarily carried on for profit, its commer-
lending institution located in the United States-for example, loans,
cial nature could readily be assumed. At the other end of the spectrum,
guarantees or insurance provided by the Export-Import Bank of the
a single contract, if of the same character as a contract which might be
United States. It will be for the courts to determine whether a particu-
made by a private person, could constitute a "particular transaction or
lar commercial activity has been performed in whole or in part in the
act."
United States. This definition, however, is intended to reflect a degree
As the definition indicates, the fact that goods or services to be
of contact beyond that occasioned simply by U.S. citizenship or U.S.
residence of the plaintiff.
procured through a contract are to be used for a public purpose is
irrelevant; it is the essentially commercial nature of an activity or
Section 1604. Immunity of foreign states from jurisdiction
transaction that is critical. Thus, a contract by a foreign government
New chapter 97 of title 28, United States Code, starts from a premise
to buy provisions or equipment for its armed forces or to construct
of immunity and then creates exceptions to the general principle. The
a government building constitutes a commercial activity. The same
chapter is thus cast in a manner consistent with the way in which the
would be true of a contract to make repairs on an embassy building.
law of sovereign immunity has developed. Stating the basic principle
Such contracts should be considered to be commercial contracts, even
in terms of immunity may be of some advantage to foreign states in
if their ultimate object is to further a public function.
doubtful cases, but, since sovereign immunity is an affirmative defense
By contrast, a foreign state's mere participation in a foreign assist-
which must be specially pleaded, the burden will remain on the foreign
ance program administered by the Agency for International Develop-
state to produce evidence in support of its claim of immunity. Thus,
ment (AID) is an activity whose essential nature is public or govern-
evidence must be produced to establish that a foreign state or one of its
mental, and it would not itself constitute a commercial activity. By the
subdivisions, agencies or instrumentalities is the defendant in the suit
same token, a foreign state's activities in and "contacts" with the
and that the plaintiff's claim relates to a public act of the foreign
United States resulting from or necessitated by participation in such
state-that is, an act not within the exceptions in sections 1605-1607.
a program would not in themselves constitute a sufficient commercial
Once the foreign state has produced such prima facie evidence of im-
nexus with the United States SO as to give rise to jurisdiction (see
munity, the burden of going forward would shift to the plaintiff to
sec. 1330) or to assets which could be subjected to attachment or
produce evidence establishing that the foreign state is not entitled to
execution with respect to unrelated commercial transactions (see sec.
immunity. The ultimate burden of proving immunity would rest with
1610(b)). However, a transaction to obtain goods or services from
the foreign state.
private parties would not lose its otherwise commercial character be-
The immunity from jurisdiction provided in section 1604 appliès to
cause it was entered into in connection with an AID program. Also
proceedings in both Federal and State courts. Section 1604 would be
public or governmental and not commercial in nature, would be the
the only basis under which a foreign state could claim immunity from
employment of diplomatic, civil service, or military personnel, but
the jurisdiction of any Federal or State court in the United States.
not the employment of American citizens or third country nationals by
All immunity provisions in sections 1604 through 1607 are made
the foreign state in the United States.
subject to "existing" treaties and other international agreements to
The courts would have a great deal of latitude in determining what
which the United States is a party. In the event an international agree-
is a "commercial activity" for purposes of this bill. It has seemed un-
ment expressly conflicts with this bill, the international agreement
wise to attempt an excessively precise definition of this term, even if
would control. Thus, the bill would not alter the rights or duties of the
that were practicable. Activities such as a foreign government's sale of
United States under the NATO Status of Forces Agreement or similar
a service or a product, its leasing of property, its borrowing of money,
agreements with other countries; nor would it alter the provisions of
its employment or engagement of laborers, clerical staff or public re-
commercial contracts or agreements to which the United States is a
lations or marketing agents, or its investment in a security of an
party, calling for exclusive nonjudicial remedies through arbitration
American corporation, would be among those included within the
or other procedures for the settlement of disputes.
definition.
Treaties of friendship, commerce and navigation and bilateral air
transport agreements often contain provisions relating to the immunity
H. Rept. 94-1487 3
18
19
of foreign states. Many provisions in such agreements are consistent
eign state." This phrase is defined in section 1603 of the bill. See
with, but do not go as far as, the current bill. To the extent such inter-
the analysis to that section.
national agreements are silent on a question of immunity, the bill
The second situation, an "act performed in the United States in
a conflict was manifest.
would control; the international agreement would control only where
connection with a commercial activity of the foreign state elsewhere,"
looks to conduct of the foreign state in the United States which relates
Section 1605. General exceptions to the jurisdictional immunity of
either to a regular course of commercial conduct elsewhere or to a par-
foreign states
ticular commercial transaction concluded or carried out in part else-
Section 1605 sets forth the general circumstances in which a claim
where. Examples of this type of situation might include a representa-
of sovereign immunity by a foreign state, as defined in section 1603 (a),
tion in the United States by an agent of a foreign state that leads to an
action for restitution based on unjust enrichment; an act in the United
States. would not be recognized in a Federal or State court in the United
States that violates U.S. securities laws or regulations; the wrongful
(a) (1) Waivers.-Section 1605 (a) (1) treats explicit and implied
discharge in the United States of an employee of the foreign state who
waivers by foreign states of sovereign immunity. With respect to ex-
has been employed in connection with a commercial activity carried on
plicit waivers, a foreign state may renounce its immunity by treaty,
in some third country.
as has been done by the United States with respect to commercial and
Although some or all of these acts might also be considered to be a
other activities in a series of treaties of friendship, commerce, and
"commercial activity carried on in the United States," as broadly
navigation, or a foreign state may waive its immunity in a contract
defined in section 1603 (e), it has seemed advisable to provide expressly
with a private party. Since the sovereign immunity of a political sub-
for the case where a claim arises out of a specific act in the United
division, agency or instrumentality of a foreign state derives from the
States which is commercial or private in nature and which relates to a
foreign state itself, the foreign state may waive the immunity of its
commercial activity abroad. It should be noted that the acts (or omis-
political subdivisions, agencies or instrumentalities.
sions) encompassed in this category are limited to those which in and
of themselves are sufficient to form the basis of a cause of action.
With respect to implicit waivers, the courts have found such waivers
in cases where a foreign state has agreed to arbitration in another
The third situation-"an act outside the territory of the United
States in connection with a commercial activity of the foreign state
country or where a foreign state has agreed that the law of a par-
elsewhere and that act causes a direct effect in the United States"-
ticular country should govern a contract. An implicit waiver would
would embrace commercial conduct abroad having direct effects within
also include a situation where a foreign state has filed a responsive
the United States which would subject such conduct to the exercise of
pleading in an action without raising the defense of sovereign
immunity.
jurisdiction by the United States consistent with principles set forth
The language, "notwithstanding any withdrawal of the waiver
in section 18, Restatement of the Law, Second, Foreign Relations
which the foreign state may purport to effect except in accordance
Law of the United States (1965).
with the terms of the waiver," is designed to exclude a withdrawal of
Neither the term "direct effect" nor the concept of "substantial con-
the waiver both after and before a dispute arises except in accordance
tacts" embodied in section 1603 (e) is intended to alter the application
with the terms of the original waiver. In other words, if the foreign
of the Sherman Antitrust Act, 15 U.S.C. 1, et seq., to any defendant.
Thus, the bill does not affect the holdings in such cases as United
state agrees to a waiver of sovereign immmunity in a contract, that
States V. Pacific & Arctic Ry. & Nav. Co., 228 U.S. 87 (1913), or Pacific
waiver may subsequently be withdrawn only in a manner consistent
with the expression of the waiver in the contract. Some court decisions
Seafarers, Inc. V. Pacific Far East Line, Inc., 404 F. 2d 803 (D.C. Cir.
have allowed subsequent and unilateral rescissions of waivers by for-
1968), cert. denied, 393 U.S. 1093 (1969).
eign states. But the better view, and the one followed in this section,
(a) (3) Expropriation claims.-Section 1605 (a) (3) would, in two
is that a foreign state which has induced a private person into a
categories of cases, deny immunity where "rights in property taken in
contract by promising not to invoke its immunity cannot, when a
violation of international law are in issue." The first category involves
dispute arises, go back on its promise and seek to revoke the waiver
cases where the property in question or any property exchanged for
unilaterally.
such property is present in the United States, and where such
(a) (2) Commercial activities having a nexus with the United
presence is in connection with a commercial activity carried on in
States.-Section 1605 (a) (2) treats what is probably the most impor-
the United States by the foreign state, or political subdivision, agency
tant instance in which foreign states are denied immunity, that in
or instrumentality of the foreign state. The second category is where
which the foreign state engages in a commercial activity. The defini-
the property, or any property exchanged for such property, is (i)
tion of a "commercial activity" is set forth in section 1603 (d) of the
owned or operated by an agency or instrumentality of a foreign state
bill, and is discussed in the analysis to that section.
and (ii) that agency or instrumentality is engaged in a commercial
Section 1605 (a) (2) mentions three situations in which a foreign
activity in the United States. Under the second category, the property
state would not be entitled to immunity with respect to a claim based
need not be present in connection with a commercial activity of the
upon a commercial activity. The first of these situations is where the
agency or instrumentality.
The term "taken in violation of international law" would include the
"commercial activity [is] carried on in the United States by the for-
nationalization or expropriation of property without payment of the
20
21
prompt adequate and effective compensation required by international
as applying to all tort actions for money damages, not otherwise en-
law. It would also include takings which are arbitrary or discrimi-
compassed by section 1605 (a) (2) relating to commercial activities. It
natory in nature. Since, however, this section deals solely with issues
denies immunity as to claims for personal injury or death, or for
of immunity, it in no way affects existing law on the extent to which,
damage to or loss of property, caused by the tortious act or omission
if at all, the "act of state" doctrine may be applicable. See 22 U.S.C.
of a foreign state or its officials or employees, acting within the scope
2370 (2).1
of their authority; the tortious act or omission must occur within the
(a) (4) Immovable, inherited, and gift property.- Section 1605 (a)
jurisdiction of the United States, and must not come within one of the
(4) denies immunity in litigation relating to rights in real estate and
exceptions enumerated in the second paragraph of the subsection.
in inherited or gift property located in the United States. It is estab-
As used in section 1605 (a) (5), the phrase "tortious act or omission"
lished that, as set forth in the "Tate Letter" of 1952, sovereign immu-
is meant to include causes of action which are based on strict liability
nity should not be granted in actions with respect to real property,
as well as on negligence. The exceptions provided in subparagraphs
diplomatic and consular property excepted. 26 Department of State
(A) and (B) of section 1605 (a) (5) correspond to many of the claims
Bulletin 984 (1952). It does not matter whether a particular piece of
with respect to which the U.S. Government retains immunity under
property is used for commercial or public purposes.
the Federal Tort Claims Act, 28 U.S.C. 2680 (a) and (h).
It is maintainable that the exception mentioned in the "Tate Letter"
Like other provisions in the bill, section 1605 is subject to existing
with respect to diplomatic and consular property is limited to ques-
international agreements (see section 1604), including Status of Forces
tions of attachment and execution and does not apply to an adjudica-
Agreements; if a remedy is available under a Status of Forces Agree-
tion of rights in that property. Thus the Vienna Convention on
ment, the foreign state is immune from such tort claims as are encom-
Diplomatic Relations, concluded in 1961, 23UST 3227, TIAS 7502
passed in sections 1605 (a) (2) and 1605 (a) (5).
(1972), provides in article 22 that the "premises of the mission, their
Since the bill deals only with the immunity of foreign states and
furnishings and other property thereon and the means of transport
not its diplomatic or consular representatives, section 1605 (5)
of the mission shall be immune from search, requisition, attachment
would not govern suits against diplomatic or consular representatives
or execution." Actions short of attachment or execution seem to be
but only suits against the foreign state. It is noteworthy in this regard
permitted under the Convention, and a foreign state cannot deny to
that while article 43 of the Vienna Convention on Consular Relations
the local state the right to adjudicate questions of ownership, rent,
of 1963, 21 UST 77, TIAS 6820 (1970), expressly abolishes the im-
servitudes, and similar matters, as long as the foreign state's pos-
munity of consular officers with respect to civil actions brought by a
session of the premises is not disturbed.
third party for "damage arising from an accident in the receiving
There is general agreement that a foreign state may not claim im-
state caused by a vehicle, vessel or aircraft," there is no such provision
munity when the suit against it relates to rights in property, real or
in the Vienna Convention on Diplomatic Relations of 1961, supra.
personal, obtained by gift or inherited by the foreign state and situ-
Consequently, no case relating to a traffic accident can be brought
ated or administered in the country where the suit is brought. As
against a member of a diplomatic mission.
stated in the "Tate Letter," immunity should not be granted "with re-
The purpose of section 1605 (a) (5) is to permit the victim of a
spect to the disposition of the property of a deceased person even
traffic accident or other noncommercial tort to maintain an action
though a foreign sovereign is the beneficiary." The reason is that, in
against the foreign state to the extent otherwise provided by law.
claiming rights in a decedent's estate or obtained by gift, the foreign
See, however, section 1605 (c).
state claims the same right which is enjoyed by private persons.
(b) Maritime liens.-Section 1605 (b) denies immunity to a foreign
(a) (5) Noncommercial torts.Section 1605(a)'(5 is directed pri-
state in cases where (i) a suit in admiralty is brought to enforce a
marily at the problem of traffic accidents but is cast in general terms
maritime lien against a vessel or cargo of that foreign state, (ii) the
maritime lien is based upon a commercial activity of the foreign
1 The committee has been advised that in some cases, after the defense of sovereign
immunity has been denied or removed as an issue, the art of state doctrine may be
state, and (iii) the conditions in paragraphs (1) and (2) of section
improperly asserted in an effort to block litigation. Under the act of state doctrine.
United States Courts may refuse to adjudicate the validity of purely public acts of
1605 (b) have been-complied with.
foreign sovereigns, as distinguished from commercial acts. committed and effective within
The purpose of this subsection is the permit a plaintiff to bring suit
their own territory. For example, in the Supreme Court's recent decision in Dunhill V.
Republic of Cuba, 44 U.S.L.W. 4665. No. 73-1288 (May 24, 1976, the respondent having
in a U.S. district court arising out of a maritime lien involving a
brought suit (and thus clearly having waived the defense of sovereign immunity)
attempted to assert that a refusal to pay a commercial obligation was not reviewable
vessel or cargo of a foreign sovereign without arresting the vessel, by
because it was an "act of state".
instituting an in personam action against the foreign state in a man-
The committee has found it unnecessary to address the act of state doctrine in this
legislation since decisions such as that in the Dunhill case demonstrate that our courts
ner analogous to bringing such a suit against the United States. Cf.
already have considerable guidance enabling them to reject improper assertions of the
act of state doctrine. For example, it appears that the doctrine would not apply to the
46 U.S.C. 741, et seq. In view of section 1609 of the bill, section
cases covered by H.R. 11315, whose touchstone is a concept of "commercial activity"
1605 (b) is designed to avoid arrests of vessels or cargo of a foreign
involving significant jurisdictional contacts with this country. The conclusions of the
committee are in concurrence with the position of the government in its amicus brief to
state to commence a suit. Instead, as provided in paragraph (1), a
the Supreme Court in the Dunhill case where the Solicitor General stated:
"[U]nder the modern restrictive theory of sovereign immunity, a foreign state is not
copy of the summons and complaint must be delivered to the master
immune from suit on its commercial obligations. To elevate the foreign state's com-
or other person having possession of the vessel or cargo (such as the
mercial acts to the protected status of acts of state' would frustrate this modern
development by permitting sovereign immunity to reenter through the back door, under
second in command of the ship).
the guise of the act of state doctrine." (Amicus Brief of United States, p. 41.)
If, however, the vessel or its cargo is arrested or attached, the
plaintiff will lose his in personam remedy and the foreign state will
22
23
be entitled to immunity-except in the case where the plaintiff was
The bill does not attempt to deal with questions of discovery. Exist-
unaware that the vessel or cargo of a foreign state was involved.
ing law appears to be adequate in this area. For example, if a private
This would be a rare case because the flag of the vessel, the circum-
plaintiff sought the production of sensitive governmental documents
stances giving rise to the maritime lien, or the information contained
in ship registries kept in ports throughout the United States should
of a foreign state, concepts of governmental privilege would apply.2
Or if a plaintiff sought to depose a diplomat in the United States or
make known the ownership of the vessel in question, if not the cargo.
a high-ranking official of a foreign government, diplomatic and official
By contrast, evidence that a party had relied on a standard registry
immunity would apply. However, appropriate remedies would be
of ships, which did not reveal a foreign state's interest in a vessel,
would be prima facie evidence of the party's unawareness that a
available under Rule 37, F.R. Civ. P., for an unjustifiable failure to
make discovery.
vessel of a foreign state was involved. More generally, a party could
seek to establish its lack of awareness of the foreign state's owner-
Section 1607. Counterclaims
ship by submitting affidavits from itself and from its counsel. If,
Section 1607 applies to counterclaims against a foreign state which
however, the vessel or cargo is mistakenly arrested, such arrest or
brings an action or intervenes in an action in a Federal or State court.
attachment must, under section 1609, be immediately dissolved when
It would deny immunity in three situations. First, immunity would
the foreign state brings to the court's attention its interest in the
be denied as to any counterclaim for which the foreign state would
vessel or cargo and, hence, its right to immunity from arrest.
not be entitled to immunity under section 1605, if the counterclaim
Under paragraph (2), the plaintiff must also be able to prove that
had been brought as a direct claim in a separate action against the
the procedures for service under section 1608 (a) or (b) have com-
foreign state. This provision is based upon article I of the European
menced-for example, that the clerk of the court has mailed the
Convention on State Immunity 11 Int'l Legal Materials 470 (1972).
requisite copies of the summons and complaint. The plaintiff need
Second, even if a foreign state would otherwise be entitled to im-
not show that service has actually been made under section 1608 (c).
munity under sections 1604-1606, it would not be immune from a
The reason for this second requirement is to help make certain that
counterclaim "arising out of the transaction or occurrence that is the
the foreign state concerned receives prompt and actual notice of the
subject matter of the claim of the foreign state." This is the same
institution of a suit in admiralty in the United States, even if the
terminology as that used in rule 13(a) of the Federal Rules of Civil
copies served on the master of the vessel should fail to reach the
Procedure and is consistent with section 70(2) (b), Restatement of the
foreign state.
Law, Second, Foreign Relations Law of the United States (1965).
Section 1605 (b) would not preclude a suit in accordance with other
Certainly, if a foreign state brings or intervenes in an action based on
provisions of the bill-e.g., section 1605 (a) (2). Nor would it preclude
a particular transaction or occurrence, it should not obtain the bene-
a second action, otherwise permissible, to recover the amount by
fits of litigation before U.S. courts while avoiding any legal liabilities
which the value of the maritime lien exceeds the recovery in the first
claimed against it and arising from that same transaction or oc-
action.
currence. See, Alfred Dunhill of London, Inc., V. Cuba,
U.S.
Section 1606. Extent of liability
No. 73-1288, decided May 24, 1976).
Section 1606 makes clear that if the foreign state, political sub-
Third, notwithstanding that the foreign state may be immune
division, agency or instrumentality is not entitled to immunity from
under subsections (a) and (b), the foreign state nevertheless would
jurisdiction, liability exists as it would for a private party under
not be immune from a setoff. Subsection (c) codifies the rule enunciated
like circumstances. However, the tort liability of a foreign state itself,
in National Bank V. Republic of China, 348 U.S. 356 (1955).
and of its political subdivision (but not of an agency or instrumen-
Section 1608. Service; time to answer; default
tality of a foreign state) does not extend to punitive damages. Under
Section 1608 sets forth the exclusive procedures with respect to
current international practice, punitive damages are usually not
service on, the filing of an answer or other responsive pleading by,
assessed against foreign states. See 5 Hackwork, Digest of Inter-
and obtaining a default judgment against a foreign state or its po-
national Law, 723-26 (1943) ; Garcia-Amador, State Reesponsibility,
litical subdivisions, agencies or instrumentalities. These procedural
94 Hague Recueil des Cours 365, 476-81 (1958). Interest prior to
provisions are intended to fill a void in existing Federal and State
judgment and costs may be assessed against a foreign state just as
law, and to insure that private persons have adequate means for com-
against a private party Cf. 46 U.S.C. 743, 745.
mencing a suit against a foreign state to seek redress in the courts.
Consistent with this section, a court could, when circumstances
Provisions in section 1608 are closely interconnected with other parts
were clearly appropriate, order an injunction or specific performance.
of the bill-particularly the proposed section 1330 and sections 1605-
But this is not determinative of the power of the court to enforce
1607. If notice is served under section 1608 and if the jurisdictional
such an order. For example, a foreign diplomat or official could not
contacts embodied in sections 1605-1607 are satisfied, personal jur-
be imprisoned for contempt because of his government's violation of
isdiction over a foreign state would exist under section 1330(b). In
an injunction. See 22 U.S.C. 252. Also a fine for violation of an
addition to its integral role in the bill, section 1608 follows on the
injunction may be unenforceable if immunity exists under sections
1609-1610.
2 e.g. 5 U.S.C. 552 concerning public information.
24
25
precedents of other statutory service provisions in areas of unusual
steps are available under or required by U.S. law in order to defend
Federal interest. See, for example, 8 U.S.C. 1105a (3) and 15 U.S.C.
the action. In short, it would provide an introductory explanation to
21 (f) and 77v.
a foreign state that may be unfamiliar with U.S. law or procedures.
(a) Service on Foreign States and Political Subdivisions.-Subsec-
Service through diplomatic channels is widely used in international
tion (a) of section 1608 sets forth the exclusive procedures for service
practice. It is provided for in the European Convention on State Im-
on a foreign state, or political subdivision thereof, but not on an agency
munity, supra, which was negotiated by 18 European nations. It is
or instrumentality of a foreign state which is covered in subsection
accepted and indeed preferred by the United States in suits brought
(b). There is a hierarchy in the methods of service. Paragraph (1)
against the United States Government in foreign courts. See Depart-
provides for service in accordance with any special arrangement which
ment of State's circular instruction No. CA-10922, June 16, 1961, 56
may have been agreed upon between a plaintiff and the foreign state
Am. J. Int'l L. 523-33 (1962).
or political subdivision. If such an arrangement exists, service must
(b) Service on Agencies or Instrumentalities.-Subsection (b) of
be made under this method. The purpose of subsection (a) (1) is to
section 1608 provides the methods under which service shall be made
encourage potential plaintiffs and foreign states to agree to a proce-
upon an agency or instrumentality of a foreign state, as defined in
dure on service.
section (b). Again, service must always be made in accordance
If no special arrangement exists, paragraph (2) would permit serv-
with any special arrangement for service between a plaintiff and the
ice in accordance with an applicable international convention on serv-
agency or instrumentality. If no such arrangement exists, then serv-
ice of judicial documents. The only such convention to which the
ice must be made under subsection (b) (2) which provides for service
United States is at present a party is the Hague Convention on Serv-
upon officers, or managing, general or appointed agents in the United
ice Abroad of Judicial and Extrajudicial Documents, 20 UST 361,
States of the agency or instrumentality-or in the alternative, in ac-
TIAS 6638 (1969). In order for an international convention to be
cordance with an applicable international convention such as the Hague
"applicable", both the United States and the foreign state concerned
Convention on Service Abroad of Judicial and Extrajudicial
must be a party to the convention.
Documents, supra.
If neither an applicable international convention nor a special ar-
If there is no special arrangement and if the agency or instrumen-
rangement exists, paragraph (3) would provide for service by mail.
tality has no representative in the United States, service may be made
The clerk of the court would send a copy of a "notice of suit" as pre-
under one of the three methods provided in subsection (b) (3). The
scribed by the Secretary of State by regulation, together with a copy of
first two methods provide for service by letter rogatory or request or
the summons and complaint, by mail to the head of the foreign state's
by mail. The third method, subparagraph (C), authoizes a court to
ministry of foreign affairs or its equivalent. This procedure is based
fashion a method of service, for example under rule 83, F.R. Civ. P.,
on rule 4(i) (1) (D), F.R. Civ. P.
provided the method is "consistent with the law of the place where
Finally, as a method of last resort, paragraph (4) would provide for
service is to be made." This latter language takes into account the
service through diplomatic channels if service could not be made by
fact that the laws of foreign countries may prohibit the service in
mail within 30 days. The clerk of the court would send two copies
their country of judicial documents by process servers from the United
of the notice of suit, summons and complaint to the Secretary of State
States. It is contemplated that no court will direct service upon a
for transmittal through diplomatic channels. Transmittal through dip-
foreign state by appointing someone to make a physical attempt at
lomatic channels would mean that the Office of Special Consular Serv-
service abroad, unless it is clearly consistent with the law of the foreign
ices in the Department of State will pouch a copy of these papers to
jurisdiction where service is to be attempted. It is also contemplated
the U.S. Embassy in the foreign state in question. The U.S.
that the courts will not direct service in the United States upon dip-
Embassy, in turn, would prepare a diplomatic note of transmittal
lomatic representatives, Hellenic Lines Ltd. V. Moore, 345 F. 2d 978
and deliver the diplomatic note with the other papers to the appro-
(D.C. Cir. 1965), or upon consular representatives, Oster V. Dominion
priate official in the ministry of foreign affairs of the foreign state.
of Canada, 144 F. Supp. 746 (N.D.N.Y. 1956), aff' 238 F. 2d 400
Use of diplomatic channels could also include transmittal of the papers
(2d Cir. 1956).
by the Department of State to the foreign state's embassy in Wash-
(c) When Service Is Made.-Subsection (c) of section 1608 estab-
ington, D.C. "Transmittal" of the notice of suit, summons and com-
lishes the time when service shall be deemed to have been made under
plaint does not require that the foreign state formally accept these
each of the methods provided in subsections (a) and (b).
papers. It only requires that these papers be transmitted in such a way
(d) Time To Answer or Reply.-Subsection (d) of section 1608
that the foreign state has actual notice of the suit. All papers to be
gives each foreign state, political subdivision thereof or agency or
served would be accompanied by translations into an official language
instrumentality of a foreign state or political subdivision up to 60 days
of the foreign state. Finally, the Secretary of State would be required
from the time service is deemed to have been made in which to answer
to send back to the court the diplomatic note used in transmitting the
or file a responsive pleading. This corresponds to similar provisions
papers to the foreign state.
applicable in suits against the United States or its officers or agencies.
A "notice of suit" as used in this section would advise a foreign
Rule 12(a), F.R. Civ. P.
state of the legal proceeding, it would explain the legal significance
(e) Default Judgments.-Subdivision (e) of section 1608 provides
of the summons, complaint and service, and it would indicate what
that no default judgment may be entered against a foreign state, or
26
27
its political subdivisions, agencies or instrumentalities, "unless the
Such attachments can also give rise to serious friction in United
claimant establishes his claim or right to relief by evidence satisfactory
States' foreign relations. In some cases, plaintiffs obtain numerous at-
to the court." This is the same requirement applicable to default judg-
tachments over a variety of foreign government assets found in various
ments against the U.S. Government under rule 55 (e), F.R. Civ. P.
parts of the United States. This shotgun approach has caused sig-
In determining whether the claimant has established his claim or right
nificant irritation to many foreign governments.
to relief, it is expected that courts will take into account the extent
At the same time, one of the fundamental purposes of this bill is
to which the plaintiff's case depends on appropriate discovery against
to provide a long-arm statute that makes attachment for jurisdictional
the foreign state.3 Once the default judgment is entered, notice of such
purposes unnecessary in cases where there is a nexus between the claim
judgment must be sent in the manner prescribed for service in sections
and the United States. Claimants will clearly benefit from the ex-
1608(a) or (b).
panded methods under the bill for service on a foreign state (sec.
Special note should be made of two means which are currently in
1608), as well as from the certainty that section 1330(b) of the bill
use in attempting to commence litigation against a foreign state. First,
confers personal jurisdiction over a foreign state in Federal and State
the current practice of attempting to commence a suit by attachment
courts as to every claim for which the foreign state is not entitled to
of a foreign state's property would be prohibited under section 1609 in
immunity. The elimination of attachment as a vehicle for commenc-
the bill, because of foreign relations considerations and because such
ing a lawsuit will ease the conduct of foreign relations by the United
attachments are rendered unnecessary by the liberal service and juris-
States and help eliminate the necessity for determinations of claims
dictional provisions of the bill. See the analysis to section 1609.
of sovereign immunity by the State Department.
A second means, of questionable validity, involves the mailing of a
copy of the summons and complaint to a diplomatic mission of the
Section 1610. Exceptions to Immunity from Attachment or Execution
foreign state. Section 1608 precludes this method so as to avoid ques-
Section 1610 sets forth circumstances under which the property of a
tions of inconsistency with section 1 of article 22 of the Vienna Con-
foreign state is not immune from attachment or execution to satisfy
vention on Diplomatic Relations, 23 UST 3227, TIAS 7502 (1972),
a judgment. Though the enforcement or judgments against foreign
which entered into force in the United States on December 13, 1972.
state property remains a somewhat controversial subject in interna-
Service on an embassy by mail would be precluded under this bill. See
tional law, there is a marked trend toward limiting the immunity from
execution.
71 Dept. of State Bull. 458-59 (1974).
A number of treaties of friendship, commerce and navigation con-
Section 1609. Immunity from Attachment and Execution of Property
cluded by the United States permit execution of judgments against
of a Foreign State
foreign publicly owned or controlled enterprises (for example, Treaty
As in the case of section 1604 of the bill with respect to jurisdiction,
with Japan, April 2, 1953, art. 18(2), 4 UST 2063, TIAS 2863). The
section 1609 states a general proposition that the property of a foreign
widely ratified Brussels Convention for the Unification of Certain
state, as defined in section 1603 is immune from attachment and
Rules relating to the Immunity of State-Owned Vessels, April 10, 1926,
from execution, and then exceptions to this proposition are carved out
196 L.N.T.S. 199, allows execution of judgments against public vessels
in sections 1610 and 1611. Here, it should be pointed out-that neither
engaged in commercial services in the same way as against privately
section 1610 nor 1611 would permit an attachment for the purpose of
owned vessels. Although not a party to this treaty, the United States
obtaining jurisdiction over a foreign state or its property. For this
follows a policy of not claiming immunity for its publicly-owned
reason, section 1609 has the effect of precluding attachments as a means
merchant vessels, both domestically, 46 U.S.C. 742, 781, and abroad, 46
for commencing a lawsuit.
U.S.C. 747; 2 Hackworth, Digest of International Law, 438-39 (1941).
Attachment of foreign government property for jurisdictional pur-
Articles 20 and 21 of the Geneva Convention on the Territorial Sea
poses has been recognized "where under international law a foreign
and the Contiguous Zone, April 29, 1958, 15 UST 1606, TIAS 5639,
government is not immune from suit", and where the property in the
to which the United States is a party, recognize the liability to execu-
United States is commercial in nature. Weilamann V. Chase Manhattan
tion under appropriate circumstances of state-owned vessels used in
Bank, 21 Misc. 2d 1086, 192 N.Y.S. 2d 469 (Sup. Ct. N.Y. 1959). Even
commercial service.
in such cases, however, it has been recognized that property attached
However, the traditional view in the United States concerning exe-
for jurisdictional purposes cannot be retained to satisfy a judgment
cution has been that the property of foreign states is absolutely im-
because, under current practice, the property of a foreign sovereign is
mune from execution. Dexter and Carpenter, Inc. V. Kunglig Jarnvags-
immune from execution.
styrelsen, 43 F. 2d 705 (2d Cir. 1930). Even after the "Tate Letter" of
Attachments for jurisdictional purposes have been criticized as in-
1952, this continued to be the position of the Department of State
volving U.S. courts in litigation not involving any significant U.S.
and of the courts. See, Weilamann V. Chase Manhattan Bank, 21 Misc.
interest or jurisdictional contacts, apart from the fortuitous presence
2d 1086, 192 N.Y.S. 2d 469, 473 (Sup. Ct. N.Y. 1959). Sections 1610(a)
of property in the jurisdiction. Such cases frequently require the
and (b) are intended to modify this rule by partially lowering the
application of foreign law to events which occur entirely abroad.
barrier of immunity from execution, SO as to make this immunity con-
form more closely with the provisions on jurisdictional immunity in
3 Cf. Statement in the analysis of section 1606 noting that appropriate remedies would
the bill.
be available under Rule 37, F.R. Civ. P., for an unjustifiable failure to make discovery.
28
29
(a) Execution Against Property of Foreign States. Section 1610(a)
Paragraph (4) would deny immunity from execution against prop-
relates to execution against property of a foreign state, including a
erty of a foreign state which is used for a commercial activity in the
political subdivision, agency, or instrumentality of a foreign state.
United States and is either acquired by succession or gift or is immov-
The term "attachment in aid of execution" is intended to include at-
able. Specifically exempted are diplomatic and consular missions and
tachments, garnishments, and supplemental proceedings available
the residences of the chiefs of such missions. This exemption applies
under applicable Federal or State law to obtain satisfaction of a judg-
to all of the situations encompassed by sections 1610 (a) and (b)
ment. See rule 69, F.R. Civ. P. The property in question must be used
embassies and related buildings could not be deemed to be property
for a commercial activity in the United States. If so, attachment in
used for a "commercial" activity as required by section 1610(a) also,
aid of execution, and execution, upon judgments entered by Federal
since such buildings are those of the foreign state itself, they could
or State courts against the foreign state would be permitted in any
not be property of an agency or instrumentality engaged in a com-
of the circumstances set forth in paragraphs (1)-(5) of section
mercial activity in the United States within the meaning of section
1610(a).
1610(b).
Paragraph (1) relates to explicit and implied waivers, and is gov-
Paragraph (5) of section 1610(a) would deny immunity with re-
erned by the same principles that apply to waivers of immunity from
spect to obligations owed to a foreign state under a policy of liability
jurisdiction under section 1605(a) (1) of the bill. A foreign state
insurance. Such obligations would after judgment be treated as prop-
may have waived its immunity from execution, inter alia, by the pro-
erty of the foreign state subject to garnishment or related remedies in
visions of a treaty, a contract, an official statement, or certain steps
aid or in place of execution. The availability of such remedies would,
taken by. the foreign state in the proceedings leading to judgment
of course, be governed by applicable State or Federal law. Paragraph
or to execution. As in section 1605(a) (1), a waiver on behalf of an
(5) is intended to facilitate recovery by individuals who may be in-
agency or instrumentality of a foreign state may be made either by
jured in accidents, including those involving vehicles operated by a
the agency or instrumentality or by the foreign state itself.
foreign state or by its officials, or employees acting within the scope
Paragraph (2) of section 1610(a) denies immunity from execution
of their authority.
against property used by a foreign state for a commercial activity
(b) Additional Execution Against Agencies and Instrumentalities
in the United States, provided that the commercial activity gave rise
Engaged in Commercial Activity in the United States.-Section 1610
to the claim upon which the judgment is based. Included would be
(b) provides for execution against the property of agencies or instru-
commercial activities encompassed by section 1605(a) (2). The pro-
mentalities of a foreign state in circumstances additional to those
vision also includes a commercial activity giving rise to a claim with
provided in section 1610(a). However, the agency or instrumentality
respect to which the foreign state has waived immunity under section
must be engaged in a commercial activity in the United States. If so,
1605 (a) (1). In addition, it includes a commercial activity which
the plaintiff may obtain an attachment in aid of execution or execu-
gave rise to a maritime lien with respect to which an admiralty suit
was brought under section 1605(b). One could, of course, execute
tion against any property. commercial and noncommercial, of the
against commercial property other than a vessel or cargo which is
agency or instrumentality, but only in the circumstances set forth in
the subject of a suit under section 1605(b), provided that the prop-
paragraphs (1) and (2).
erty was used in the same commercial activity upon which the maritime
Paragraph (1) denies immunity from execution against any prop-
lien was based.
erty of an agency or instrumentality engaged in a commercial activity
The language "is or was used" in paragraph (2) contemplates a
in the United States, where the agency or instrumentality has waived
situation where property may be transferred from the commercial
its immunity from execution. See the analysis to paragraph (1) of
activity which is the subject of the suit in an effort to avoid the proc-
section 1610(a).
ess of the court. This language, however, does not bear on the question
Paragraph (2) of section 1610(b) denies immunity from execution
of whether particular property is to be deemed property of the entity
against any property of an agency or instrumentality engaged in a
against which the judgment was obtained. The courts will have to
commercial activity in the United States in order to satisfy a judg-
determine whether property "in the custody of" an agency or instru-
ment relating to a claim for which the agency or instrumentality is not
mentality is property "of" the agency or instrumentality, whether
immune by virtue of section 1605(a) (2), (3) or (5), or 1605(b).
property held by one agency should be deemed to be property of
Property will be subject to execution irrespective of whether the
another, whether property held by an agency is property of the for-
property was used for the same commercial or other activity upon
eign state. See Prelude Corp. V. Owners of F/V Atlantic, 1971, A.M.C.
which the claim giving rise to the judgment was based.
2651 (N.D. Calif.) ; American Hawaiian Ventures v. M.V.J. Latuhar-
Section 1610(b) will not permit execution against the property of
hary, 257 F. Supp. 622, 626 (D.N.J. 1966).
one agency or instrumentality to satisfy a judgment against another,
Paragraph (3) would deny immunity from execution against prop-
unrelated agency or instrumentality. See Prelude Corp. V. Owners of
erty of a foreign state which is used for a commercial activity in the
F/V Atlantic. 1971 A.M.C. 2651 (N.D. Calif.). There are compelling
United States and which has been taken in violation of international
reasons for this. If U.S. law did not respect the separate juridical
law or has been exchanged for property taken in violation of interna-
identities of different agencies or instrumentalities, it might encourage
tional law. See the analysis to section 1605 (a) (3).
foreign jurisdictions to disregard the juridical divisions between differ-
30
31
ent U.S. corporations or between a U.S. corporation and its independ-
inter alia, the International Monetary Fund and the World Bank. The
ent subsidiary. However, a court might find that property held by one
reference to "international organizations" in this subsection is not in-
agency is really the property of another. See the analysis to section
tended to restrict any immunity accorded to such international orga-
1610(a) (2).
nizations under any other law or international agreement.
(c) Necessity of court order following reasonable notice.-Section
(b) Central bank funds and military property.-Section 1611 (b) (1)
1610(c) prohibits attachment or execution under sections
provides for the immunity of central bank funds from attachment or
and (b) unless the court has issued an order for such attachment and
execution. It applies to funds of a foreign central bank or monetary
execution. In some jurisdictions in the United States, attachment and
authority which are deposited in the United States and "held" for the
execution to satisfy a judgment may be had simply by applying to a
bank's or authority's "own account"-i.e., funds used or held in con-
clerk or to a local sheriff. This would not afford sufficient protection to
nection with central banking activities, as distinguished from funds
a foreign state. This subsection contemplates that the courts will
used solely to finance the commercial transactions of other entities or
exercise their discretion in permitting execution. Prior to ordering
of foreign states. If execution could be levied on such funds without
attachment and execution, the court must determine that a reasonable
an explicit waiver, deposit of foreign funds in the United States
period of time has elapsed following the entry of judgment, or in cases
might be discouraged. Moreover, execution against the reserves of
of a default judgment, since notice of the judgment was given to the
foreign states could cause significant foreign relations problems.
foreign state under section 1608(e). In determining whether the
Section 1611 (b) (2) provides immunity from attachment and execu-
period has been reasonable, the courts should take into account pro-
tion for property which is, or is intended to be, used in connection with
cedures, including legislation, that may be necessary for payment of a
a military activity and which fulfills either of two conditions: the
judgment by a foreign state, which may take several months; repre-
property is either (A) of a military character or (B) under the con-
sentations by the foreign state of steps being taken to satisfy the judg-
trol of a military authority or defense agency. Under the first condi-
ment; or any steps being taken to satisfy the judgment; or evidence
tion, property is of a military character if it consists of equipment in
that the foreign state is about to remove assets from the jurisdiction to
the broad sense-such as weapons, ammunition, military transport,
frustrate satisfaction of the judgment.
warships, tanks, communications equipment. Both the character and
(d) Attachments upon explicit waiver to secure satisfaction of a
the function of the property must be military. The purpose of this
judgment.-Section 1610(d) relates to attachment against the prop-
condition is to avoid frustration of United States foreign policy in
erty of a foreign state, or of a political subdivision, agency or instru-
connection with purchases of military equipment and supplies in the
mentality of a foreign state, prior to the entry of judgment or prior
United States by foreign governments.
to the lapse of the "reasonable period of time" required under section
The second condition is intended to protect other military property,
1610 Immunity from attachment will be denied only if the foreign
such as food, clothing, fuel and office equipment which, although not of
state, political subdivision, agency or instrumentality has explicitly
a military character, is essential to military operations. "Control" is
waived its immunity from attachment prior to judgment, and only if
intended to include authority over disposition and use in addition to
the purpose of the attachment is to secure satisfaction of a judgment
physical control, and a "defense agency" is intended to include civilian
that has been or may ultimately be entered against the foreign state
defense organizations comparable to the Defense Supply Agency in the
and not to secure jurisdiction. This subsection provides, in cases where
United States. Each condition is subject to the overall condition that
there has been an explicit waiver, a provisional remedy, for example
property will be immune only if its present or future use is military
to prevent assets from being dissipated or removed from the jurisdic-
(e.g., surplus military equipment withdrawn from military use would
tion in order to frustrate satisfaction of a judgment.
not be immune). Both conditions will avoid the possibility that a for-
Section 1611. Certain types of property immune from execution
eign state might permit execution on military property of the United
Section 1611 exempts certain types of property from the immunity
States abroad under a reciprocal application of the act.
provisions of section 1610 relating to attachment and exectuion.
SEC. 5. VENUE
(a) Property held by international organizations.-Section 1611
(a) precludes attachment and execution against funds and other
This section amends 28 U.S.C. § 1391, which deals with venue gen-
property of certain international organizations. The purpose of this
erally. Under the new subsection (f), there are four express provisions
subsection is to permit international organizations designated by the
for venue in civil actions brought against foreign states, political sub-
President pursuant to the International Organizations Immunities
divisions or their agencies or instrumentalities.
Act, 22 U.S.C. 288, et seq., to carry out their functions from their offices
(1) The action may be brought in the judicial district wherein a
located in the United States without hindrance by private claimants
substantial part of the events or omissions giving rise to the claim
seeking to attach the payment of funds to a foreign state; such at-
occurred." This provision is analogous to 28 U.S.C. § 1391 (e), which
tachments would also violate the immunities accorded to such interna-
allows an action against the United States to be brought, inter alia, in
tional institutions. See also article 9, section 3 of the Articles of Agree-
any judicial district in which "the cause of action arose." The test
ment of the International Monetary Fund, TIAS 1501, 60 Stat. 1401.
adopted, however, is the newer test recommended by the American Law
International organizations covered by this provision would include,
Institute and incorporated in S. 1876, 92d Congress, 1st session, which
32
33
does not imply that there is only one such district applicable in each
case. In cases under section 1605 (a) (2), involving a commercial activ-
Upon removal, the action would be heard and tried by the appropri-
ity abroad that causes a direct effect in the United States, venue would
ate district court sitting without a jury. (Cf. 28 U.S.C. 2402, preclud-
exist wherever the direct effect generated "a substantial part of the
ing jury trials in suits against the United States.) Thus, one effect
events" giving rise to the claim.
of removing an action under the new section 1441(d) will be to ex-
In cases where property or rights in property are involved, the action
tinguish a demand for a jury trial made in the state court. (Cf. rule
may be brought in the judicial district in which "a substantial part of
81 (c), F.R. Civ. P.) Because the judicial power of the United States
the property that is the subject of the action is situated." No hardship
specifically encompasses actions "between a State, or the Citizens
will be caused to the foreign state if it is subject to suit where it has
thereof, and foreign States" (U.S. Constitution, art. III, sec. 2, cl. 1),
chosen to place the property that gives rise to the dispute.
this premption of State court procedures in cases involving foreign
(2) If the action is a suit in admiralty to enforce a maritime lien
sovereigns is clearly constitutional.
This section, again, would not apply to entities owned by a foreign
against a vessel or cargo of a foreign state, and if the action is brought
state which are citizens of a State of the United States as defined in
under the new section 1605(b) in this bill, the action may be brought
in the judicial district in which the vessel or cargo is situated at the
28 U.S.C. 1332 (c) and (d), or created under the laws of a third
country.
time notice is delivered pursuant to section 1605 (b) (1).
SEC. 7. SEVERABILITY OF PROVISIONS
(3) If the action is brought against an agency or instrumentality of
a foreign state, as defined in the new section 1603 (b) in the bill, it may
This action provides that if a portion of the act or any application
be brought in the judicial district where the agency or instrumentality
of the act should be found invalid for any reason, such invalidity
is licensed to do business or is doing business. This provision is based on
would not affect any other provision or application of the act.
28 U.S.C. § 1391 (c).
(4) If the action is brought against a foreign state or political sub-
SEC. 8. EFFECTIVE DATE
division, it may be brought in the U.S. District Court for the District
of Columbia. It is in the District of Columbia that foreign states have
This section establishes that the effective date of the act shall be 90
diplomatic representatives and where it may be easiest for them to
days after it becomes law. A 90-day period is deemed necessary in
defend. New subsection (f) would, of course, not apply to entities that
order to give adequate notice of the act and its detailed provisions to
are owned by a foreign state and are also citizens of a state of the
all foreign states.
United States as defined in 28 U.S.C. 1332 (c) and (d). For purposes
of this bill, such entities are not agencies or instrumentalities of a
STATEMENTS UNDER CLAUSE 2(1) (2) (B), CLAUSE (1) (3) AND
foreign state. (See the analysis to sec. 1603 (b).)
CLAUSE (1) (4) OF RULE XI AND CLAUSE (a) (1) OF RULE XIII
As with other provisions in 28 U.S.C. 1391, venue in any court
OF THE HOUSE OF REPRESENTATIVES
could be waived by a foreign state, such as by failing to object to
improper venue in a timely manner. (See rule 12(h), F.R. Civ. P.)
COMMITTEE VOTE
SEC. 6. REMOVAL OF CASES FROM STATE COURTS
(Rule XI 2(1) (2) (B))
The bill adds a new provision to 28 U.S.C. 1441 to provide for re-
On September 9, 1976, the Full Committee on the Judiciary approved
moval to a Federal district court of civil actions brought in the courts
the bill H.R. 11315 by voice vote.
of the States against a foreign state or a political subdivision, agency
COST
or instrumentality of a foreign state. In view of the potential sensi-
tivity of actions against foreign states and the importance of de-
(Rule XIII (a) (1))
veloping a uniform body of law in this area, it is important to give
foreign states clear authority to remove to a Federal forum actions
The enactment of this bill will not require any new or additional
brought against them in the State courts. New subsection (d) of sec-
authorization or appropriation of funds. Indeed, the enactment of the
tion 1441 permits the removal of any such action at the discretion of
bill will result in a net saving, in an undetermined amount, in that the
the foreign state, even if there are multiple defendants and some of
Department of State will no longer have to undertake a consideration
these defendants desire not to remove the action or are citizens of the
of diplomatic requests for sovereign immunity, and the Department
State in which the action has been brought.
of Justice will not be required to appear in the courts in support of the
As with other removal provisions, a petition for removal must be
suggestions of immunity that are filed pursuant to the Department of
filed with the appropriate district court in a timely manner. (28
State's sovereign immunity determinations.
U.S.C. 1446.) However, in view of the 60-day period provided in
section 1608 (c) in the bill and in view of the bill's preference that
OVERSIGHT STATEMENT
actions involving foreign states be tried in federal courts, the time
limitations for filing a petition of removal under 28 U.S.C. 1446 may
(Rule XI 2(1) (3) (A))
be extended "at any time" for good cause shown.
The Subcommittee on Administrative Law and Governmental Re-
lations of this committee exercises the committee's oversight responsi-
34
35
bility with reference matters involving the immunity of foreign states,
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
in accordance with Rule VI(b) of the Rules of the Committee on the
Judiciary. The favorable consideration of this bill was recommended
[The amendment to chapter 85 of title 28, United States Code, add
by that subcommittee and the committee has determined that legisla-
a new sec. 1330 and amend sec. 1331 (a) (2) and (3).
tion should be enacted as set forth in this bill.
The bill adds a new chapter 97 to title 28, United States Code,
comprised of sec. 1602 through 1611.
BUDGET STATEMENT
(Secs. 1391 and 1441 of title 28, United States Code, are amended to
include new provisions relating to suits against foreign states.]
(Rule XI 2(1) (3) (B))
In compliance with paragraph 2 of clause 3 of rule XIII of the Rules
of the House of Representatives, changes in existing law made by the
As has been indicated in the committee statement as to cost made
bill are shown as follows (existing law proposed to be omitted is
pursuant to Rule XIII (7) (a) (1), the bill will not require any new
enclosed in black brackets, new matter is printed in italic, existing
or additional authorization or appropriation of funds. The bill does
law in which no change is proposed is shown in roman) :
not involve new budget authority nor does it require new or increased
tax expenditures as contemplated by Clause 2(1) (3) (B) of Rule XI.
TITLE 28-JUDICIARY AND JUDICIAL PROCEDURE
ESTIMATE OF THE CONGRESSIONAL BUDGET OFFICE
(Rule XI 2(1) (3) (C))
PART IV-JURISDICTION AND VENUE
Chap.
The estimate received from the Director of the Congressional
Sec.
Budget Office is as follows:
81. Supreme Court
1251
83. Courts of Appeals
1291
CONGRESS OF THE UNITED STATES,
85. District Courts; Jurisdiction
1331
CONGRESSIONAL BUDGET OFFICE,
87. District Courts; Venue
1391
89. District Courts; Removal of Cases from State Courts
1441
Washington, D.C., July 6, 1976.
91. Court of Claims
1491
Hon. PETER W. RODINO, Jr.,
93. Court of Customs and Patent Appeals
1541
Chairman, Committee on the Judiciary, U.S. House of Representa-
95. Customs Court
1581
tives, Washington, D.C.
97. Jurisdictional Immunities of Foreign States
1602
DEAR MR. CHAIRMAN: In response to your letter of June 10, 1976
and pursuant to section 403 of the Congressional Budget Act, the Con-
gressional Budget Office has analyzed the costs associated with H.R.
CHAPTER 85.-DISTRICT COURTS JURISDICTION
11315, the "Foreign Sovereign Immunities Act of 1976." This legisla-
Sec.
tion is estimated to have no budgetary impact.
1330. Actions against foreign states.
1331. Federal question; amount in controversy ; costs.
Should the committee SO desire, we would be pleased to provide
1332. Diversity of citizenship; amount in controversy ; costs.
additional assistance on this and future legislation.
1333. Admiralty, maritime and prize cases.
Sincerely,
1334. Bankruptcy matters and proceedings.
ALICE M. RIVLIN,
1335. Interpleader.
1336. Interstate Commerce Commission's orders.
Director.
1337. Commerce and anti-trust regulations.
1338. Patents, copyrights, trade-marks and unfair competition.1
OVERSIGHT FINDINGS AND RECOMMENDATIONS OF THE COMMITTEE ON
1339. Postal matters.
1340. Internal revenue ; customs duties.
GOVERNMENT OPERATIONS
1341. Taxes by States.
1342. Rate orders of State agencies.
(Rule XI 2(1) (3) (D))
1343. Civil rights [and elective franchise.]1
1344. Election disputes.
No findings or recommendations of the Committee on Government
1345. United States as plaintiff.
Operations were received as referred to in subdivision (D) of clause
1346. United States as defendant.
2(1) (3) of House Rule XI.
1347. Partition action where United States is joint tenant.
1348. Banking association as party.
1349. Corporation organized under federal law as party.
INFLATIONARY IMPACT
1350. Alien's action for tort.
1351. Consuls and vice consuls as defendants.
(Rule XI 2(1) (3))
1352. Bonds executed under federal law.
1353. Indian allotments.
In compliance with clause 2(1) (4) of House Rule XI it is stated
that this legislation will have no inflationary impact on prices and
1 Section catchline amended without amending analysis.
costs in the operation of the national economy.
36
37
1354. Land grants from different states.
surer of a policy or contract of liability insurance, whether incorpo-
1355. Fine, penalty or forfeiture.
1356. Seizures not within admiralty and maritime jurisdiction.
rated or unincorporated, to which action the insured is not joined as
1357. Injuries under Federal laws.
a party-defendant, such insurer shall be deemed a citizen of the State
1358. Eminent domain.
of which the insured is a citizen, as well as of any State by which the
1359. Parties collusively joined or made.
insurer has been incorporated and of the State where it has its prin-
1360. State civil jurisdiction in actions to which Indians are parties.
1361. Action to compel an officer of the United States to perform his duty.
cipal place of business.
1362. Indian tribes.
(d) The word "States", as used in this section, includes the Terri-
1363. Construction of references to laws of the United States or Acts of Congress.
tories, the District of Columbia, and the Commonwealth of Puerto
Rico. (June 25, 1948, ch. 646, 62 Stat. 930; July 26, 1956, ch. 740, 70
§ 1330. Action against foreign states
Stat. 658; July 25, 1958, Pub. L. 85-554, § 2, 72 Stat. 415; Aug. 14,
1964, Pub. L. 88-439, § 1, 78 Stat. 445.)
(a) The district courts shall have original jurisdiction without re-
gard to amount in controversy of any nonjury civil action against a
foreign state as defined in section 1603 (a) of this title as to any claim
§ 1391. Venue generally.
for relief in personam with respect to which the foreign state is not
entitled to immunity either under sections 1605-1607 of this title or
(a) A civil action wherein jurisdiction is founded only on diversity
under any applicable international agreement.
of citizenship may, except as otherwise provided by law, be brought
(b) Personal jurisdiction over a foreign state shall exist as to every
only in the judicial district where all plaintiffs or all defendants
claim for relief over which the district courts have jurisdiction under
reside, or in which the claim arose.
subsection (a) where service has been made under section 1608 of this
(b) A civil action wherein jurisdiction is not founded solely on
title.
diversity of citizenship may be brought only in the judicial district
(c) For purposes of subsection (b), an appearance by a foreign
where all defendants reside, or in which the claim arose, except as
state does not confer personal jurisdiction with respect to any claim
otherwise provided by law.
for relief not arising out of any transaction or occurrence enumerated
(c) A corporation may be sued in any judicial district in which it is
in sections 1605-1607 of this title.
incorporated or licensed to do business or is doing business, and such
judicial district shall be regarded as the residence of such corporation
for venue purposes.
§ 1332. Diversity of citizenship; amount in controversy; costs
(d) An alien may be sued in any district.
(a) The district courts shall have original jurisdiction of all civil
(e) A civil action in which each defendant is an officer or employee
actions where the matter in controversy exceeds the sum or value of
of the United States or any agency thereof acting in his official
$10,000, exclusive of interest and costs, and is between-
capacity or under color of legal authority, or an agency of the United
(1) citizens of different States;
States, may, except as otherwise provided by law, be brought in any
[(2) citizens of a State, and foreign states or citizens or subjects
judicial district in which (1) a defendant in the action resides, or (2)
thereof; and
the cause of action arose, or (3) any real property involved in the
(3) citizens of different States and in which foreign states or citi-
action is situated, or (4) the plaintiff resides if no real property is
zens or subjects thereof are additional parties.
involved in the action.
(2) citizens of a State and citizens or subjects of a foreign state;
(f) A civil action against a foreign state as defined in section
(3) citizens of different States and in which citizens or subjects of
1603 (a) of this title may be brought-
a foreign state are additional parties; and
(1) in any judicial district in which a substantial part of the
(4) a foreign state, defined in section 1603 (a) of this title, as plain-
events or omissions giving rise to the claim occurred, or a sub-
tiff and citizens of a State or of different States.
stantial part of property that is the subject of the action is
(b) Except when express provision therefor is otherwise made in a
situated;
statute of the United States, where the plaintiff who files the case orig-
(2) in any judicial district in which the vessel or cargo of a
inally in the Federal courts is finally adjudged to be entitled to re-
foreign state is situated, if the claim is asserted under section
cover less than the sum or value of $10,000, computed without regard
1605 (b) of this title;
to any setoff or counterclaim to which the defendant may be adjudged
(3) in any judicial district in which the agency or instru-
to be entitled, and exclusive of interest and costs, the district court
mentality is licensed to do business or is doing business, if the
may deny costs to the plaintiff and, in addition, may impose costs on
action is brought against an agency or instrumentality of a
the plaintiff.
foreign state as defined in section 1603 (b) of this title; or
(c) For the purposes of this section and section 1441 of this title, a
(4) in the United States District Court for the District of
corporation shall be deemed a citizen of any State by which it has been
Columbia if the action is brought against a foreign state or po-
incorporated and of the State where it has its principal place of bus-
litical subdivision thereof.
iness: Provided further, That in any direct action against the in-
The summons and complaint in such an action shall be served as
provided by the Federal Rules of Civil Procedure except that the
38
39
delivery of the summons and complaint to the officer or agency as
rights of both foreign states and litigants in United States courts.
required by the rules may be made by certified mail beyond the
Under international law, states are not immune from the jurisdiction
territorial limits of the district in which the action is brought.
(June 25, 1948, ch. 646, 62 Stat. 935; Oct. 5, 1962, Pub. L. 87-748, § 2,
of foreign courts insofar as their commercial activities are concerned,
and their commercial property may be levied upon for the satisfaction
76 Stat. 744; Dec. 23, 1963, Pub. L. 88-234, 77 Stat. 473; Nov. 2, 1966,
Pub. L. 89-714, § § 1, 2, 80 Stat. 1111.)
of judgments rendered against them in connection with their com-
mercial activities. Claims of foreign states to immunity should hence-
forth be decided by courts of the United States and of the States in
§ 1441. Actions removable generally.
conformity with the principles set forth in this chapter.
(a) Except as otherwise expressly provided by Act of Congress,
§ 1603. Definitions
any civil action brought in a State court of which the district courts
For purposes of this chapter—
of the United States have original jurisdiction, may be removed by
(a) A "foreign state", except as used in section 1608 of this title,
the defendant or the defendants, to the district court of the United
includes a political subdivision of a foreign state or an agency or
States for the district and division embracing the place where such
instrumentality of a foreign state as defined in subsection (b).
action is pending.
(b) An "agency or instrumentality of a foreign state" means
(b) Any civil action of which the district courts have original
any entity-
jurisdiction founded on a claim or right arising under the Constitu-
(1) which is a separate legal person, corporate or other-
tion, treaties or laws of the United States shall be removable without
wise, and
regard to the citizenship or residence of the parties. Any other such
(2) which is an organ of a foreign state or political sub-
action shall be removable only if none of the parties in interest prop-
division thereof, or a majority of whose shares or other
erly joined and served as defendants is a citizen of the State in which
ownership interest is owned my a foreign state or political
such action is brought.
subdivision thereof, and
(c) Whenver a separate and independent claim or cause of action,
(3) which is neither a citizen of a State of the United
which would be removable if sued upon alone, is joined with one or
States as defined in section 1332 (c) and (d) of this title, nor
more otherwise non-removable claims or causes of action, the entire
created under the laws of any third country.
case may be removed and the district court may determine all issues
(c) The "United States" includes all territory and waters, con-
therein, or, in its discretion, may remand all matters not otherwise
tinental or insular, subject to the jurisdiction of the United States.
within its original jurisdiction.
(d) A "commercial activity" means either a regular course of
(d) Any civil action brought in a State court against a foreign
commercial conduct or a particular commercial transaction or act.
state as defined in section 1603(a) of this title may be removed by the
The commercial character of an activity shall be determined by
foreign state to the district court of the United States for the district
reference to the nature of the course of conduct or particular trans-
and division embracing the place where such action is pending. Upon
action or act, rather than by reference to its purpose.
removal the action shall be tried by the court without jury. Where
(e) A "commercial activity carried on in the United States
removal is based upon this subsection, the time limitations of section
by a foreign state" means commercial activity carried on by such
1446 (b) of this chapter may be enlarged at any time for cause shown.
state and having substantial contact with the United States.
§ 1604. Immunity of a foreign state from jurisdiction
Subject to existing of international agreements of which the United
CHAPTER 97-JURISDICTIONAL IMMUNITIES OF
States is a party at the time of enactment of this Act, a foreign state
FOREIGN STATES
shall be immune from the jurisdiction of the courts of the United
States and of the States except as provided in sections 1605 to 1607 of
1602. Findings and declaration of purpose.
1603. Definitions.
this chapter.
1604. Immunity of a foreign state from jurisdiction.
§ 1605. General exceptions to the jurisdictional immunity of a
1605. General exceptions to the jurisdictional immunity of a foreign state.
1606. Extent of liability.
foreign state
1607. Counterclaims.
(a) A foreign state shall not be immune from the jurisdiction of
1608. Service; time to answer; default.
courts of the United States or of the States in any case-
1609. Immunity from attachment and execution of property of a foreign state.
1610. Exceptions to the immunity from attachment or execution.
(1) in which the foreign state has waived its immunity either
1611. Certain types of property immune from execution.
explicitly or by implication, notwithstanding any withdrawal of
§ 1602. Findings and declaration of purpose
the waiver which the foreign state may purport to effect except in
accordance with the terms of the waiver;
The Congress finds that the determination by United States courts
(2) in which the action is based upon a commercial activity
of the claims of foreign states to immunity from the jurisdiction of
carried on in the United States by the foreign state; or upon an
such courts would serve the interests of justice and would protect the
act performed in the United States in connection with a com-
40
41
mercial activity of the foreign state elsewhere; or upon an act
sonam claim against the foreign state which at that time owns the
outside the territory of the United States in connection with a
vessel or cargo involved: Provided, That a court may not award
commercial activity of the foreign state elsewhere and that act
judgment against the foreign state in an amount greater than the
causes a direct effect in the United States;
value of the vessel or cargo upon which the maritime lien arose, such
(3) in which rights in property taken in violation of interna-
value to be determined as of the time notice is served under subsec-
tional law are in issue and that property or any property
tion (b) (1) of this section.
exchanged for such property is present in the United States in
§ 1606. Extent of liability
connection with a commercial activity carried on in the United
As to any claim for relief with respect to which a foreign state is
States by the foreign state; or that property or any property
not entitled to immunity under section 1605 or 1607 of this chapter, the
exchanged for such property is owned or operated by an agency
or instrumentality of the foreign state and that agency or instru-
foreign state shall be liable in the same manner and to the same extent
mentality is engaged in a commercial activity in the United
as a private individual under like circumstances; but a foreign state
States;
except for an agency or instrumentality thereof shall not be liable for
(4) in which rights in property in the United States acquired
punitive damages; if, however, in any case wherein death was caused,
by succession or gift or rights in immovable property situated in
the law of the place where the action or omission occurred provides,
the United States are in issue; or
or has been construed to provide, for damages only punitive in nature,
(5) not otherwise encompassed in paragraph (2) above, in
the foreign state shall be liable for actual or compensatory damages
which money damages are sought against a foreign state for
measured by the pecuniary injuries resulting from such death which
personal injury or death, or damage to or loss of property, occur-
were incurred by the persons for whose benefit the action was brought.
ring in the United States and caused by the tortious act or omis-
§ 1607. Counterclaims
sion of that foreign state or of any official or employee of that
In any action brought by a foreign state, or in which a foreign
foreign state while acting within the scope of his office or employ-
state intervenes, in a court of the United States or a State, the foreign
ment; except this paragraph shall not apply to-
state shall not be accorded immunity with respect to any counter-
(A) any claim based upon the exercise or performance or
claim-
the failure to exercise or perform a discretionary function
(a) for which a foreign state would not be entitled to immunity
regardless of whether the discretion be abused, or
under section 1605 of this chapter had such claim been brought
(B) any claim arising out of malicious prosecution, abuse
in a separate action against the foreign state; or
of process, libel, slander, misrepresentation, decent, or inter-
(b) arising out of the transaction or occurrence that is the sub-
ference with contract rights.
ject matter of the claim of the foreign state; or
(b) A foreign state shall not be immune from the jurisdiction of
(c) to the extent that the counterclaim does not seek relief
the courts of the United States in any case in which a suit in ad-
exceeding in amount or differing in kind from that sought by the
miralty is brought to enforce a maritime lien against a vessel or cargo
foreign state.
of the foreign state, which maritime lien is based upon a commercial
§ 1608. Service; time to answer; default
activity of the foreign state: Provided, That-
(1) notice of the suit is given by delivery of a copy of the
(a) Service in the courts of the United States and of the States
summons and of the complaint to the person, or his agent, having
shall be made upon a foreign state or political subdivision of a foreign
possession of the vessel or cargo against which the maritime
state:
lien is asserted; but such notice shall not be deemed to have been
(1) by delivery of a copy of the summons and complaint in
delivered nor may it thereafter be delivered, if the vessel or
accordance with any special arrangement for service between
cargo is arrested pursuant to process obtained on behalf of the
the plaintiff and the foreign state or political subdivision; or
party bringing the suit-unless the party was unaware that the
(2) if no special arrangement exists, by delivery of a copy
vessel or cargo of a foreign state was involved, in which event
of the summons and complaint in accordance with an applicable
the service of process of arrest shall be deemed to constitute valid
international convention on service of judicial documents; or
delivery of such notice; and
(3) if service cannot be made under paragraphs (1) or (2),
(2) notice to the foreign state of the commencement of suit
by sending a copy of the summons and complaint and a notice
as provided in section 1608 of this title is initiated within ten
of suit, together with a translation of each into the official lan-
days either of the delivery of notice as provided in subsection
guage of the foreign state, by any! form of mail requiring a
(b) (1) of this section, or, in the case of a party who was unaware
signed receipt, to be addressed and dispatched by the clerk of
that the vessel or cargo of a foreign state was involved, of the
the court to the head of the ministry of foreign affairs of the
date such party determined the existence of the foreign state's
foreign state concerned; or
interest.
(4) if service cannot be made within 30 days under paragraph
Whenever notice is delivered under subsection (b) (1) of this sec-
(3), by sending two copies of the summons and complaint and
tion, the maritime lien shall thereafter be deemed to be an in per-
a notice of suit, together with a translation of each into the
42
43
official language of the foreign state, by any form of mail re-
§ 1609. Immunity from attachment and execution of property of
quiring a signed receipt, to be addressed and dispatched by the
a foreign state
clerk of the court to the Secretary of State in Washington,
Subject to existing international agreements to which the United
District of Columbia, to the attention of the Director of Special
States is a party at the time of enactment of this Act, the property
Consular Services-and the Secretary shall transmit one copy
in the United States of a foreign state shall be immune from attach-
of the papers through diplomatic channels to the foreign state
ment, arrest and execution except as provided in sections 1610 and
and shall send to the clerk of the court a certified copy of the
1611 of this chapter.
diplomatic note indicating when the papers were transmitted.
As used in this subsection, a "notice of suit" shall mean a notice
§ 1610. Exceptions to the immunity from attachment or execution
addressed to a foreign state and in a form prescribed by the Secretary
(a) The property in the United States of a foreign state, as de-
of State by regulation.
fined in section 1603 (a) of this chapter, used for a commercial activ-
(b) Service in the courts of the United States and of the States
ity in the United States, shall not be immune from attachment in aid
shall be made upon an agency or instrumentality of a foreign state:
of execution, or from execution, upon a judgment entered by a court
(1) by delivery of a copy of the summons and complaint in
of the United States or of a State after the effective date of this Act,
accordance with any special arrangement for service between the
if-
plaintiff and the agency or instrumentality; or
(1) the foreign state has waived its immunity from attach-
(2) if no special arrangement exists, by delivery of a copy of
ment in aid of execution or from execution either explicitly or
the summons and complaint either to an officer, a managing or
by implication, notwithstanding any withdrawal of the waiver
general agent or to any other agent authorized by appointment
the foreign state may purport to effect except in accordance with
or by law to receive service of process in the United States; or in
the terms of the waiver, or
accordance with an applicable international convention on service
(2) the property is or was used for the commercial activity
of judicial documents; or
upon which the claim is based, or
(3) if service cannot be made under paragraphs (1) or (2),
(3) the execution relates to a judgment establishing rights in
and if reasonably calculated to give actual notice, by delivery of
property which has been taken in violation of international law
a copy of the summons and complaint, together with a translation
or which has been exchanged for property taken in violation of
of each into the official language of the foreign state-
international law, or
(A) as directed by an authority of the foreign state or
(4) the execution relates to a judgment establishing rights
political subdivision in response to a letter rogatory or re-
in property-
quest, or
(A) which is acquired by succession or gift, or
(B) by any form of mail requiring a signed receipt, to be
(B) which is immovable and situated in the United States:
addressed and dispatched by the clerk of the court to the
Provided, That such property is not used for purposes of
agency or instrumentality to be served, or
maintaining a diplomatic or consular mission or the residence
(C) as directed by order of the court consistent with the
of the Chief of such mission, or
law of the place where service is to be made.
(5) the property consists of any contractual obligation or any
(c) Service shall be deemed to have been made-
(1) in the case of service under subsection (a) (4), as of the
proceeds from such a contractual obligation to indemnify or hold
date of transmittal indicated in the certified copy of the diplo-
harmless the foreign state or its employees under a policy of
automobile or other liability or casualty insurance covering the
matic note; and
(2) in any other case under this section, as of the date of receipt
claim which merged into the judgment.
indicated in the certification, signed and returned postal receipt,
(b) In addition to subsection (α), any property in the United
or other proof of service applicable to the method of service
States of an agency or instrumentality of a foreign state engaged in
employed.
commercial activity in the United States shall not be immune from
(d) In any action brought in a court of the United States or of a
attachment in aid of execution, or from execution, upon a judgment
State, a foreign state, a political subdivision thereof, or an agency or
entered by a court of the United States or of α State after the effec-
instrumentality of a foreign state shall serve an answer or other re-
tive date of this Act, if-
sponsive pleading to the complaint within sixty days after service has
(1) the agency or instrumentality has waived its immunity
been made under this section.
from attachment in aid of execution or from execution either
(e) No judgment by default shall be entered by a court of the United
explicitly or implicitly, notwithstanding any withdrawal of the
States or of a State against a foreign state, a political subdivision
waiver the agency or instrumentality may purport to effect ex-
thereof, or an agency or instrumentality of a foreign state, unless the
cept in accordance with the terms of the waiver, or
claimant establishes his claim or right to relief by evidence satisfac-
(2) the judgment relates to a claim for which the agency or
tory to the court. A copy of any such default judgment shall be sent
instrumentality is not immune by virtue of section 1605(a) (2),
to the foreign state or political subdivision in the manner prescribed
(3), or (5), or 1605(b) of this chapter, regardless of whether
for service in this section.
44
45
the property is or was used for the activity upon which the
enclosed draft bill, entitled "To define the circumstances in which
claim is based.
foreign states are immune from the jurisdiction of U.S. courts and in
(c) No attachment or execution referred to in subsections (a) and
which execution may not be levied on their assets, and for other pur-
(b) of this section shall be permitted until the court has ordered such
poses." This is a proposed revision of the draft bill which was sub-
attachment and execution after having determined that a reasonable
mitted in a letter (enclosed) to you dated January 16, 1973, and
period of time has elapsed following the entry of judgment and the
subsequently introduced by Chairman Peter W. Rodino, Jr., and
giving of any notice required under section 1608 (e) of this chapter.
Congressman Edward Hutchinson as H.R. 3493. A revised section-
(d) The property of a foreign state, as defined in section 1603
by-section analysis explaining the provisions of the bill in some detail
of this chapter, used for a commercial activity in the United States,
is also enclosed. A hearing was held on H.R. 3493 before the Sub-
shall not be immune from attachments prior to the entry of judgment
committee on Claims and Governmental Relations of the Committee
in any action brought in a court of the United States or of a State,
of the Judiciary in the House of Representatives in the 1st session of
or prior to the elapse of the period of time provided in subsection
the 93d Congress on June 7, 1973.
(c) of this section, if I-
The broad purposes of this legislation-to facilitate and depoliticize
(1) the foreign state has explicitly waived its immunity from
litigation against foreign states and to minimize irritations in foreign
attachment prior to judgment, notwithstanding any withdrawal
relations arising out of such litigation-remain the same. To this end
of the waiver the foreign state may purport to effect except in
the revised bill, like its predecessor, would entrust the resolution of
accordance with the terms of the waiver, and
questions of sovereign immunity to the judicial branch of Government.
(2). the purpose of the attachment is to secure satisfaction of
The statute would codify and refine the "restrictive theory" of
a judgment that has been or may ultimately be entered against
sovereign immunity which has guided United States practice with
the foreign state, and not to obtain jurisdiction.
respect to jurisdiction originally set forth in the letter of May 19,
1952, from the Acting Legal Adviser, Jack B. Tate, to the Acting
"§ 1611. Certain types of property immune from execution
Attorney General, Philip B. Perlman. It would also replace the
(a) Notwithstanding the provisions of section 1610 of this chap-
absolute immunity now accorded foreign states from execution of
ter, the property of those organizations designated by the President
judgment with an immunity from execution conforming more closely
as being entitled to enjoy the privileges, exemptions, and immunities
to the restrictive theory of immunity from jurisdiction. The measure
provided by the International Organizations Immunities Act shall
also includes provisions for service of process, venue, and jurisdiction
not be subject to attachment or any other judicial process impeding
in cases against foreign states which would make it unnecessary to
the disbursement of funds to, or on the order of, a foreign state as
attach the assets of foreign states for purposes of jurisdiction.
the result of an action brought in the courts of the United States or
Numerous technical changes have been made in the bill on the basis
of the States,
of the hearing in the House of Representatives, commentaries in a
(b) Notwithstanding the provisions of section 1610 (of this chapter
number of legal journals, and extensive discussions which have been
ter, the property of a foreign state shall be immune from attachment
held with members of the bar as well as the reports and recommenda-
and from execution, if-
tions of committees of several bar associations. A number of these
(1) the property is that of a foreign central bank or mone-
technical revisions are important, but none of them alters the basic
tary authority held for its own account, unless such bank or
concept of the legislation as originally submitted.
authority, or its parent foreign government, has explicity waived
The most important changes include (1) further definition of
its immunity from attachment in aid of execution, or from ex-
"commercial activity carried on in the United States by a foreign
ecution, not withstanding any withdrawal of the waiver which
state" and "public debt" in section 1603; (2) clarification of the
the bank authority or government may purport to effect except
limitations of immunity in tort actions (sec. 1605 in respect of
in accordance with the terms of the waiver; or
counterclaims (sec. 1607), and in case of execution of judgment (sec.
(3) the property is, or is intended to be, used in connection
1610) ; and (3) substantial revision of section 1608 relating to service
with a military activity and
of process to conform with article XXII of the Convention on Diplo-
(A) is of a military character, or
matic Relations, signed at Vienna April 18, 1961, and with the Federal
(B) is under the control of a military authority or de-
Rules of Civil Procedure.
fense agency.
In addition, important new provisions have been added to preserve
the jurisdiction of the courts of the United States in cases in which
a suit in admiralty is brought to enforce a maritime lien against a
[The executive communication from the Departments of State and
vessel or cargo of a foreign state (sec. 1605 (b)), and to avoid inter-
Justice is as follows:]
ference with disbursements to foreign states by certain international
DEPARTMENT OF STATE,
organizations located in the United States (sec. 1611 (a) These and
Washington, D.C., October 31, 1975.
Hon. CARL O. ALBERT,
other changes are discussed in the enclosed analysis.
The Departments of State and Justice believe that this revised draft
Speaker of the House of Representatives.
bill is worthy of and will receive the support of the bar and would
DEAR MR. SPEAKER: The Department of State and Department of
Justice submit for your consideration and appropriate reference the
46
47
welcome hearings before the appropriate committees of the House to
SEC. 4 (a) That title 28, United States Code, is amended by insert-
consider this measure as soon as possible.
The Office of Management and Budget has advised that there is
ing after chapter 95 the following new chapter:
no objection to the enactment of this legislation from the standpoint
"Chapter 97.-JURISDICTIONAL IMMUNITIES OF FOREIGN STATES
of the administration's program.
"Sec.
Sincerely,
"1602. Findings and declaration of purpose.
ROBERT S. INGERSOLL,
"1603. Definitions.
Deputy Secretary of State.
"1604. Immunity of a foreign state from jurisdiction.
"1605. General exceptions to the jurisdictional immunity of a foreign state.
HAROLD R. TYLER, Jr.,
"1606. Claims involving the public debt.
Deputy Attorney General.
"1607. Counterclaims.
Enclosures:
"1608. Service of process; time to answer; default.
1. Revised draft bill.
"1609. Immunity from attachment and execution of property of a foreign state.
2. Revised section-by-section analysis.
"1610. Exceptions to the immunity from attachment or execution.
"1611. Certain types of property immune from execution.
3. Letter to the President of the Senate, dated January 16, 1973.
4. Letter to the Speaker of the House, dated January 16, 1973.
"§ 1602. Findings and declaration of purpose
"The Congress finds that the determination by United States courts
A BILL To define the jurisdiction of United States courts in suits against for-
of the claims of foreign states to immunity from the jurisdiction of
eign states, the circumstances in which foreign states are immune from suit
such courts would serve the interests of justice and would protect
and in which execution may not be levied on their property, and for other
the rights of both foreign states and litigants in U.S. courts. Under
purposes
international law, states are not immune from the jurisdiction of
Be it enacted by the Senate and House of Representatives of the
foreign courts in SO far as their commercial activities are concerned,
United States of America in Congress assembled, That this Act may
and their commercial property may be levied upon for the satisfaction
be cited as the "Foreign Sovereign Immunities Act of 1975".
of judgments rendered against them in connection with their com-
SEC. 2 (a) That chapter 85 of title 28, United States Code, is
mercial activities. Claims of foreign states to immunity should hence-
amended by inserting immediately before section 1331 the following
forth be decided by courts of the United States and of the States in
new section:
conformity with the principles set forth in this chapter.
"§ 1330. Actions against foreign states
"§ 1603. Definitions
"(a) The district courts shall have original jurisdiction without
"For purposes of this chapter-
regard to amount in controversy of any nonjury civil action against
"(a) a 'foreign state', except as used in sections 1606 and 1608 of
a foreign state as defined in section 1603 (a) of this title as to any
this title, includes a political subdivision of a foreign state or an
claim for relief in personam with respect to which the foreign state
agency or instrumentality of a foreign state as defined in subsection
is not entitled to immunity either uuder sections 1605-1607 of this
(b).
title or under any applicable international agreement.
(b) an 'agency and instrumentality of a foreign state' means any
"(b) Personal jurisdiction over a foreign state shall exist as to
entity
every claim for relief over which the district courts have jurisdiction
"(1) which is a separate legal person, corporate or otherwise,
under subsection (a) where service of process has been made under
and
section 1608 of this title.
" (2) which is an organ of a foreign state or political subdivision
'(c) For purposes of subsection (b), an appearance by a foreign
thereof, or a majority of whose shares or other ownership inter-
state does not confer personal jurisdiction with respect to any claim
est is owned by a foreign state or political subdivision thereof,
for relief not arising out of any transaction or occurrence enumerated
and
in sections 1605-1607 of this title."; and
(3) which is neither a citizen of a State of the United States
(b) by inserting in the chapter analysis of that chapter before-
as defined in sections 1332 (c) and (d) of this title, nor created
"1331. Federal question amount in controversy costs."
under the laws of any third country.
the following new item
" (c) the 'United States' includes all territory and waters, con-
tinental or insular, subject to the jurisdiction of the United States.
"1330. Actions against foreign states."
(d) a 'commercial activity' means either a regular course of com-
SEC. 3. That section 1332 of title 28, United States Code, is amended
mercial conduct or a particular commercial transaction or act. The
by striking subsections (a) (2) and (3) and substituting in their place
commercial character of an activity shall be determined by reference
the following:
to the nature of the course of conduct or particular transaction or act,
" (2) citizens of a State and citizens or subjects of a foreign state;
rather than by reference to its purpose.
" (3) citizens of different States and in which citizens or subjects
"(e) a 'commercial activity carried on in the United States by a
of a foreign state are additional parties; and
foreign state' means commercial activity carried on by such state and
"(4) a foreign state, defined in section 1603(a) of this title, as
having substantial contact with the United States.
plaintiff and citizens of a State or of different States."
48
49
"§ 1604. Immunity of a foreign state from jurisdiction
session of the vessel or cargo against which the maritime lien
"Subject to existing and future international agreements to which
is asserted; but such notice shall not be deemed to have been
the United States is a party, a foreign state shall be immune from
served, nor may it thereafter be served, if the vessel or cargo is
the jurisdiction of the courts of the United States and of the States
arrested pursuant to process obtained on behalf of the party
except as provided in sections 1605-1607 of this chapter.
bringing the suit-unless the party was unaware that the vessel
or cargo of a foreign state was involved, in which event the
"§ 1605. General exceptions to the jurisdictional immunity of a
service of process of arrest shall be deemed to constitute valid
foreign state
service of such notice; and
"(a) A foreign state shall not be immune from the jurisdiction of
(2) notice to the foreign state of the commencement of suit
courts of the United States or of the States in any case-
as provided in section 1608 of this title is initiated within ten
(1) in which the foreign state has waived its immunity either
days of the service of process as provided in subsection (b) (1)
explicitly or by implication, notwithstanding any withdrawal of
of this section.
the waiver which the foreign state may purport to effect except
"Whenever notice is served under subsection (b) (1) of this section,
in accordance with the terms of the waiver;
the maritime lien shall thereafter be deemed to be an in personam
(2) in which the action is based upon a commercial activity
claim against the foreign state which at that time owns the vessel or
carried on in the United States by the foreign state: or upon an
cargo involved; provided that a court may not award judgment
act performed in the United States in connection with a com-
against the foreign state in an amount greater than the value of the
mercial activity of the foreign state elsewhere; or upon an act
vessel or cargo upon which the maritime lien arose, such value to be
outside the territory of the United States in connection with a
determined as of the time notice is served under subsection (b) (1) of
commercial activity of the foreign state elsewhere and that act
this section.
causes a direct effect in the United States;
(c) As to any claim for relief with respect to which a foreign state
(3) in which rights in property taken in violation of inter-
is not entitled to immunity under this section or under sections 1606
national law are in issue and that property or any property ex-
or 1607 of this chapter, the foreign state shall be liable in the same
changed for such property is present in the United States in con-
manner and to the same extent as a private individual under like cir-
nection with a commercial activity carried on in the United
cumstances; but a foreign state itself, as distinguished from a politi-
States by the foreign state; or that property or any property
cal subdivision thereof or from any agency or instrumentality of a
exchanged for such property is owned or operated by an agency
foreign state, shall not be liable in tort for interest prior to judgment
or instrumentality of the foreign state and that agency or instru-
or for punitive damages;
mentality is engaged in a commercial activity in the United
"If, however, in any case wherein death was caused, the law of the
States;
place where the action or omission occurred provides, or has been con-
"(4) in which rights in property in the United States acquired
strued to provide, for damages only punitive in nature, the foreign
by succession or gift or rights in immovable property situated
state shall be liable for actual or compensatory damages measured by
in the United States are in issue; or
the pecuniary injuries resulting from such death which were incurred
(5) not otherwise encompassed in paragraph (2) above, in
by the persons for whose benefit the action was brought.
which money damages are sought against a foreign state for
personal injury or death, or damage to or loss of property, occur-
"§ 1606. Claims involving the public debt
ring in the United States and caused by the tortious act or omis-
(a) For purposes of this section, a 'foreign state' shall not include
sion of that foreign state or of any official or employee of that
a political subdivision of a foreign state or an agency or instrumen-
foreign state while acting within the scope of his office or em-
tality of a foreign state.
ployment; except this paragraph shall not apply to
(b) Notwithstanding the provisions of section 1605 of this chapter,
"(A) any claim based upon the exercise or performance
a foreign state shall be immune from the jurisdiction of the courts of
or the failure to exercise or perform a discretionary function
the United States and of the States in any case relating to debt obliga-
regardless of whether the discretion be abused, or
tions incurred for general governmental purposes unless—
(B) any claim arising out of malicious prosecution,
'(1) the foreign state has waived its immunity explicitly,
abuse of process, libel, slander, misrepresentation, deceit, or
notwithstanding any withdrawal of the waiver which the foreign
interference with contract rights.
state may purport to effect except in accordance with the terms
(b) A foreign state shall not be immune from the jurisdiction of
of the waiver; or
the courts of the United States in any case in which a suit in ad-
"(2) the case arises under provisions as codified as sections 77a
miralty is brought to enforce a maritime lien against a vessel or cargo
through 80b-21 of title 15, United States Code, as amended, or
of the foreign state, which maritime lien is based upon a commercial
any other statute which may hereafter be administered by the
activity of the foreign state, provided that
United States Securities and Exchange Commission.
(1) notice of the suit is given by service of a copy of the sum-
"§ 1607. Counterclaims
mons and of the complaint to the person, or his agent, having pos-
"In any action brought by a foreign state, or in which a foreign
state intervenes, in a court of the United States or of a State, the
50
51
foreign state shall not be accorded immunity with respect to any
of the Director of Special Consular Services, and the Secretary
counterclaim
shall send one copy through diplomatic channels to the foreign
"(a) for which a foreign state would not be entitled to immunity
state and shall send a certified copy of the diplomatic note to the
under sections 1605 and 1606 of this chapter had such claim been
clerk of the court in which the action is pending. The Secretary
brought in a separate action against the foreign state; or
shall maintain and publish in the Federal Register a list of foreign
"(b) arising out of the transaction or occurrence that is the subject
states upon which service may be made under subparagraphs (B)
matter of the claim of the foreign state; or
and (C) of this paragraph, and such list shall be conclusive for
"(c) to the extent that the counterclaim does not seek relief exceed-
purposes of subparagraphs (B) and (C)
ing in amount or differing in kind from that sought by the foreign
(b) service in the courts of the United States and of the States
state.
shall be made upon an agency or instrumentality of a foreign state:
"§ 1608. Service of process; time to answer; default
"(1) by delivering a copy of the summons and of the com-
"Subject to existing and future international agreements to which
plaint in accordance with any special arrangement for service be-
the United States is a party-
tween the plaintiff and the agency or instrumentality; or
"(a) service in the courts of the United States and of the States
"(2) if no special arrangement exists, by delivering a copy of
shall be made upon a foreign state or political subdivision of a foreign
the summons and of the complaint to an officer, a managing or
state:
general agent or to any other agent authorized by appointment or
"(1) by delivering a copy of the summons and of the the com-
by law to receive service of process in the United States; or
"(3) if service cannot be made under paragraphs (1) or (2)
plaint in accordance with any special arrangement for service be-
of this subsection, and if service is reasonably calculated to give
tween the plaintiff and the foreign state or political subdivision
actual notice,
or
"(2) if no special arrangement exists, and if service is reason-
"(A) by service of a copy of the summons and of the com-
ably calculated to give actual notice,
plaint, together with a translation into the official language of
the foreign state, as directed by an authority of the foreign
(A) by service of a copy of the summons and of the com-
state or of a political subdivision in response to a letter roga-
plaint, together with a translation into the official language
tory or request, or
of the foreign state, as directed by an authority of the foreign
(B) by sending a copy of the summons and of the com-
state or of the political subdivision in response to a letter
plaint, together with a translation into the official language
rogatory or request, or
of the foreign state, by any form of mail requiring a signed
(B) by sending a copy of the summons and of the com-
receipt, to be addressed and dispatched by the clerk of the
plaint, together with a translation into the official language
court to the agency or instrumentality to be served, or
of the foreign state, by any form of mail requiring a signed
"(C) as directed by order of the court consistent with the
receipt, to be addressed and dispatched by the clerk of the
law of the place where service is to be made;
court to the official in charge of the foreign affairs of the
"(c) for the purposes of this section, service of process shall be
foreign state which is, or whose political subdivision is,
deemed to have been made—
named in the complaint; or
"(1) in the case of subsections (a) (1) and (b) (1), when de-
"(3) if proof of service is not made within 60 days after service
livered in accordance with the terms of the special arrangement;
has been initiated under paragraphs (1) or (2) of this subsection,
"(2) in the case of subsections (a) (2) (A) and (b) (3) (A),
and if
when delivered as directed by an authority of the foreign state or
"(A) the claim for relief arises out of an activity or act in
political subdivision;
the United States of a diplomatic or consular representative
"(3) in the case of subsections (a) (2) (B) and (b) (3) (B),
of the foreign state for which the foreign state is not immune
when received abroad by mail, as evidenced by the returned, signed
from jurisdiction under section 1605 of this title, or
receipt;
"(B) the foreign state uses diplomatic channels for service
"(4) in the case of subsection (b) (2), when delivered to an
upon the United States or any other foreign state, or
officer, managing or general agent or appointed agent in the
(C) the foreign state has not notified the Secretary of
United States;
State prior to the institution of the proceeding in question
'(5) in the case of subsection (a) (3), when sent through diplo-
that it prefers that service not be made through diplomatic
matic channels, as evidenced by a certified copy of the diplomatic
channels,
note of transmittal;
by sending two copies of the summons and of the complaint, to-
"(6) in the case of subsection (b) (3) (C), when served as di-
gether with a translation into the official language of the foreign
rected by order of the court.
state, by any form of mail requiring a signed receipt, to be ad-
"(d) in any action brought in a court of the United States or of a
dressed and dispatched by the clerk of the court, to the Secretary
State, a foreign state, a political subdivision thereof, or an agency or
of State at Washington, District of Columbia, to the attention
instrumentality of a foreign state shall serve an answer or other re-
52
53
sponsive pleading to the complaint or to a cross-claim, or a reply to a
entered by a court of the United States or of a State after the effective
counterclaim, within 60 days after the service of the pleading in which
date of this Act, if-
a claim is asserted; and
"(1) the agency or instrumentality has waived its immunity
(e) no judgment by default shall be entered by a court of the
from attachment in aid of execution or from execution either ex-
United States or of a State against a foreign state, a political sub-
plicity or implicitly, notwithstanding any withdrawal of the
division thereof, or an agency or instrumentality of a foreign state,
waiver the agency or instrumentality may purport to effect except
unless the claimant establishes his claim or right to relief by evidence
in accordance with the terms of the waiver, or
satisfactory to the court. A copy of any such default judgment shall
"(2) the judgment relates to a claim for which the agency or
be sent to the foreign state or political subdivision in the manner pre-
instrumentality is not immune by virtue of sections 1605 (a) (2),
scribed for service of process in this section.
(3) or (5), or 1605 (b) of this chapter, regardless of whether the
"§ 1609. Immunity from attachment and execution of property
property is or was used for the activity upon which the claim is
of a foreign state
based.
"Subject to existing and future international agreements to which
(c) No attachment or execution referred to in subsections (a) and
the United States is a party, the property in the United States of a
(b) of this section shall be permitted until the court has ordered such
attachment and execution after having determined that a reasonable
foreign state shall be immune from attachment and from execution
except as provided in sections 1610 and 1611 of this chapter.
period of time has elapsed following the entry of judgment and the
giving of any notice required under section 1608(e) of this chapter.
"§ 1610. Exceptions to the immunity from attachment or execution
"(d) The property of a foreign state, as defined in section 1603 (a)
"(a) The property in the United States of a foreign state, as defined
of this chapter, used for a commercial activity in the United States,
in section 1603 (a) of this chapter, used for a commercial activity in
shall not be immune from attachment prior to the entry of judgment
the United States, shall not be immune from attachment in aid of
in any action brought in a court of the United States or of a State, or
execution, or from execution, upon a judgment entered by a court
prior to the elapse of the period of time provided in subsection (c) of
of the United States or of a State after the effective date of this Act,
this section, if-
if-
"(1) the foreign state has explicitly waived its immunity from
"(1) the foreign state has waived its immunity from attachment
attachment prior to judgment, notwithstanding any withdrawal
in aid of execution or from execution either explicitly or by im-
of the waiver the foreign state may purport to effect except in ac-
plication, notwithstanding any withdrawal of the waiver the for-
cordance with the terms of the waiver, and
eign state may purport to effect except in accordance with the
"(2) the purpose of the attachment is to secure satisfaction of a
terms of the waiver, or
judgment that has been or may ultimately be entered against the
"(2) the property is or was used for the commercial activity
foreign state, and not to obtain jurisdiction.
upon which the claim is based, or
"§ 1611. Certain types of property immune from execution
"(3) the execution relates to a judgment establishing rights in
property which has been taken in violation of international law
"(a) Notwithstanding the provisions of section 1610 of this chapter,
the property of those organizations designated by the President as
or which has been exchanged for property taken in violation of
international law, or
being entitled to enjoy the priviliges, exemptions, and immunities pro-
"(4) the execution relates to a judgment establishing rights in
vided by the International Organizations Immunities Act shall not be
subject to attachment or any other judicial process impeding the dis-
property-
bursement of funds to, or on the order of, a foreign state as the result
(A) which is acquired by succession or gift, or
of an action brought in the courts of the United States or of the States.
(B) which is immovable and situated in the United States,
(b) Notwithstanding the provisions of section 1610 of this chapter,
provided such property is not used for purposes of maintain-
the property of a foreign state shall be immune from attachment and
ing a diplomatic or consular mission or the residence of the
from execution, if-
Chief of such mission, or
"(1) the property is that of a foreign central bank or monetary
"(5) the property consists of any contractual obligation or any
authority held for its own account, unless such bank or authority,
proceeds from such a contractual obligation to indemnify or hold
or its parent foreign government, has explicitly waived its im-
harmless the foreign state or its employees under a policy of auto-
munity from attachment in aid of execution, or from execution,
mobile or other liability or casualty insurance covering the claim
notwithstanding any withdrawal of the waiver which the bank,
which merged into the judgment.
authority or government may purport to effect except in accord-
(b) In addition to subsection (a), any property in the United
ance with the terms of the waiver; or
States of an agency or instrumentality of a foreign state engaged in
"(2) the property is, or is intended to be, used in connection with
commercial activity in the United States shall not be immune from at-
a military activity and
tachment in aid of execution, or from execution, upon a judgment
"(A) is of a military character, or
54
55
(B) is under the control of a military authority or defense
agency."; and
resolution was adopted upon recommendation of the Section of Inter-
national Law:
(b) That the analysis of "Part IV.-Jurisdiction and Venue" of
Title 28, United States Code, is amended by inserting after-
Be It Resolved, That the American Bar Association supports enact-
ment into law of H.R. 11315 (94th Congress, 1st Session) and S. 3553
"95. Customs Court.",
(94th Congress, 2nd Session) which would define the jurisdiction of
the following new item:
courts of the United States in suits against foreign states and the cir-
"97. Jurisdictional Immunities of Foreign States.".
cumstances in which foreign states are not immune from suit or execu-
SEC. 5. That section 1391 of title 28, United States Code, is amended
tion upon their property and
by adding at the end thereof the following new subsection:
Be it further resolved, That the American Bar Association urges
"(f) A civil action against a foreign state as defined in section
prompt Congressional hearings on and approval of H.R. 11315 and
S. 3553.
1603 (a) of this title may be brought-
This resolution is being transmitted for your information and what-
"(1) in any judicial district in which a substantial part of the
ever action you may deem appropriate.
events or omissions giving rise to the claim occurred, or a sub-
Please do not hesitate to let us know if you need any further in-
stantial part of property that is the subject of the action is
formation, have any questions or whether we can be of any assistance.
situated;
Sincerely yours,
(2) in any judicial district in which the vessel or cargo of a
HERBERT D. SLEDD,
foreign state is situated, if the claim is asserted under section
Secretary.
1605 (b) of this title;
"(3) in any judicial district in which the agency or instru-
mentality is licensed to do business or is doing business, if the
action is brought against an agency or instrumentality of a
foreign state as defined in section 1603 (b) of this title; or
"(4) in the United States District Court for the District of
Columbia if the action is brought against a foreign state or
political subdivision thereof.
SEC. 6. That section 1441 of title 28, United States Code, is amended
by adding at the end thereof the following new subsection:
"(d) Any civil action brought in a State court against a foreign
state as defined in section 1603(a) of this title may be removed by
the foreign state to the district court of the United States for the
district and division embracing the place where such action is pending.
Upon removal the action shall be tried by the court without jury.
Where removal is based upon this subsection, the time limitations of
section 1446 (b) of this chapter may be enlarged at any time for cause
shown."
SEC. 7. If any provision of this Act or the application thereof to
any foreign state is held invalid, the invalidity does not affect other
provisions or applications of the Act which can be given effect with-
out the invalid provision or application, and to this end the provisions
of this Act are severable.
SEC. 8. This Act shall take effect ninety days after the date of its
enactment.
[The action of the American Bar Association approving the bill
H.R. 11315 is described in the following letter:]
AMERICAN BAR ASSOCIATION,
Chicago, Ill., August 30, 1976.
Hon. PETER W. RODINO, Jr.,
Chairman, Committee on the Judiciary, U.S. House of Representa-
tives, Washington, D.C.
DEAR MR. CHAIRMAN: At the meeting of the House of Delegates of
the American Bar Association held August 9-11, 1976, the following
LIBRARY
H. R. 11315
UNITED
Rinety-fourth Congress of the United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Monday, the nineteenth day of January,
one thousand nine hundred and seventy-six
An Art
To define the jurisdiction of United States courts in suits against foreign states,
the circumstances in which foreign states are immune from suit and in which
execution may not be levied on their property, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That this Act may
be cited as the Foreign Sovereign Immunities Act of 1976".
SEC. 2. (a) That chapter 85 of title 28, United States Code, is
amended by inserting immediately before section 1331 the following
new section:
"§ 1330. Actions against foreign states
(a) The district courts shall have original jurisdiction without
regard to amount in controversy of any nonjury civil action against a
foreign state as defined in section 1603 (a) of this title as to any claim
for relief in personam with respect to which the foreign state is not
entitled to immunity either under sections 1605-1607 of this title or
under any applicable international agreement.
(b) Personal jurisdiction over a foreign state shall exist as to every
claim for relief over which the district courts have jurisdiction under
subsection (a) where service has been made under section 1608 of this
title.
" (c) For purposes of subsection (b), an appearance by a foreign
state does not confer personal jurisdiction with respect to any claim
for relief not arising out of any transaction or occurrence enumerated
in sections 1605-1607 of this title."
(b) By inserting in the chapter analysis of that chapter before-
"1331. Federal question ; amount in controversy costs."
the following new item
"1330. Action against foreign states.".
SEC. 3. That section 1332 of title 28, United States Code, is amended
by striking subsections (a) (2) and (3) and substituting in their place
the following:
(2) citizens of a State and citizens or subjects of a foreign
state;
(3) citizens of different States and in which citizens or sub-
jects of a foreign state are additional parties; and
" (4) a foreign state, defined in section 1603(a) of this title, as
plaintiff and citizens of a State or of different States.".
SEC. 4. (a) That title 28, United States Code, is amended by insert-
ing after chapter 95 the following new chapter:
"Chapter 97.-JURISDICTIONAL IMMUNITIES OF FOREIGN
STATES
"Sec.
"1602. Findings and declaration of purpose.
"1603. Definitions.
"1604. Immunity of a foreign state from jurisdiction.
"1605. General exceptions to the jurisdictional immunity of a foreign state.
"1606. Extent of liability.
H. R. 11315-2
"1607. Counterclaims.
"1608. Service; time to answer default.
"1609. Immunity from attachment and execution of property of a foreign state.
"1610. Exceptions to the immunity from attachment or execution.
"1611. Certain types of property immune from execution.
"§ 1602. Findings and declaration of purpose
"The Congress finds that the determination by United States courts
of the claims of foreign states to immunity from the jurisdiction of
such courts would serve the interests of justice and would protect the
rights of both foreign states and litigants in United States courts.
Under international law, states are not immune from the jurisdiction
of foreign courts insofar as their commercial activities are concerned,
and their commercial property may be levied upon for the satisfaction
of judgments rendered against them in connection with their commer-
cial activities. Claims of foreign states to immunity should henceforth
be decided by courts of the United States and of the States in con-
formity with the principles set forth in this chapter.
"§ 1603. Definitions
"For purposes of this chapter-
"(a) A 'foreign state', except as used in section 1608 of this title,
includes a political subdivision of a foreign state or an agency or
instrumentality of a foreign state as defined in subsection (b).
"(b) An 'agency or instrumentality of a foreign state' means
any entity--
"(1) which is a separate legal person, corporate or other-
wise, and
"(2) which is an organ of a foreign state or political
subdivision thereof, or a majority of whose shares or other
ownership interest is owned by a foreign state or political
subdivision thereof, and
"(3) which is neither a citizen of a State of the United
States as defined in section 1332 (c) and (d) of this title, nor
created under the laws of any third country.
" (c) The 'United States' includes all territory and waters, con-
tinental or insular, subject to the jurisdiction of the United States.
(d) A 'commercial activity' means either a regular course of
commercial conduct or a particular commercial transaction or act.
The commercial character of an activity shall be determined by
reference to the nature of the course of conduct or particular
transaction or act, rather than by reference to its purpose.
(e) A 'commercial activity carried on in the United States by
a foreign state' means commercial activity carried on by such state
and having substantial contact with the United States.
"§ 1604. Immunity of a foreign state from jurisdiction
"Subject to existing international agreements to which the United
States is a party at the time of enactment of this Act a foreign state
shall be immune from the jurisdiction of the courts of the United
States and of the States except as provided in sections 1605 to 1607 of
this chapter.
"§ 1605. General exceptions to the jurisdictional immunity of a
foreign state
"(a) A foreign state shall not be immune from the jurisdiction of
courts of the United States or of the States in any case-
"(1) in which the foreign state has waived its immunity either
explicitly or by implication, notwithstanding any withdrawal of
H. R. 11315-3
the waiver which the foreign state may purport to effect except
in accordance with the terms of the waiver;
(2) in which the action is based upon a commercial activity
carried on in the United States by the foreign state; or upon an
act performed in the United States in connection with a commer-
cial activity of the foreign state elsewhere; or upon an act outside
the territory of the United States in connection with a commercial
activity of the foreign state elsewhere and that act causes a direct
effect in the United States;
(3) in which rights in property taken in violation of inter-
national law are in issue and that property or any property
exchanged for such property is present in the United States in
connection with a commercial activity carried on in the United
States by the foreign state; or that property or any property
exchanged for such property is owned or operated by an agency or
instrumentality of the foreign state and that agency or instru-
mentality is engaged in a commercial activity in the United States;
"(4) in which rights in property in the United States acquired
by succession or gift or rights in immovable property situated in
the United States are in issue; or
((5) not otherwise encompassed in paragraph (2) above, in
which money damages are sought against a foreign state for
personal injury or death, or damage to or loss of property,
occurring in the United States and caused by the tortious act or
omission of that foreign state or of any official or employee of that
foreign state while acting within the scope of his office or employ-
ment; except this paragraph shall not apply to—
"(A) any claim based upon the exercise or performance or
the failure to exercise or perform a discretionary function
regardless of whether the discretion be abused, or
" (B) any claim arising out of malicious prosecution, abuse
of process, libel, slander, misrepresentation, deceit, or inter-
ference with contract rights.
(b) A foreign state shall not be immune from the jurisdiction of
the courts of the United States in any case in which a suit in admiralty
is brought to enforce a maritime lien against a vessel or cargo of the
foreign state, which maritime lien is based upon a commercial activity
of the foreign state: Provided, That-
"(1) notice of the suit is given by delivery of a copy of the
summons and of the complaint to the person, or his agent, having
possession of the vessel or cargo against which the maritime lien
is asserted; but such notice shall not be deemed to have been
delivered, nor may it thereafter be delivered, if the vessel or cargo
is arrested pursuant to process obtained on behalf of the party
bringing the suit-unless the party was unaware that the vessel or
cargo of a foreign state was involved, in which event the service
of process of arrest shall be deemed to constitute valid delivery of
such notice; and
"(2) notice to the foreign state of the commencement of suit
as provided in section 1608 of this title is initiated within ten days
either of the delivery of notice as provided in subsection (b) (1)
of this section or, in the case of a party who was unaware that the
vessel or cargo of a foreign state was involved, of the date such
party determined the existence of the foreign state's interest.
Whenever notice is delivered under subsection (b) (1) of this section,
the maritime lien shall thereafter be deemed to be an in personam
H. R. 11315-4
claim against the foreign state which at that time owns the vessel or
cargo involved: Provided, That a court may not award judgment
against the foreign state in an amount greater than the value of the
vessel or cargo upon which the maritime lien arose, such value to be
determined as of the time notice is served under subsection (b) (1) of
this section.
"§ 1606. Extent of liability
"As to any claim for relief with respect to which a foreign state is
not entitled to immunity under section 1605 or 1607 of this chapter,
the foreign state shall be liable in the same manner and to the same
extent as a private individual under like circumstances; but a foreign
state except for an agency or instrumentality thereof shall not be
liable for punitive damages; if, however, in any case wherein death
was caused, the law of the place where the action or omission occurred
provides, or has been construed to provide, for damages only punitive
in nature, the foreign state shall be liable for actual or compensatory
damages measured by the pecuniary injuries resulting from such death
which were incurred by the persons for whose benefit the action was
brought.
"§ 1607. Counterclaims
"In any action brought by a foreign state, or in which a foreign state
intervenes, in a court of the United States or of a State, the foreign
state shall not be accorded immunity with respect to any
counterclaim-
"(a) for which a foreign state would not be entitled to
immunity under section 1605 of this chapter had such claim been
brought in a separate action against the foreign state; or
"(b) arising out of the transaction or occurrence that is the
subject matter of the claim of the foreign state; or
"(c) to the extent that the counterclaim does not seek relief
exceeding in amount or differing in kind from that sought by the
foreign state.
"§ 1608. Service; time to answer; default
"(a) Service in the courts of the United States and of the States
shall be made upon a foreign state or political subdivision of a for-
eign state:
"(1) by delivery of a copy of the summons and complaint in
accordance with any special arrangement for service between the
plaintiff and the foreign state or political subdivision; or
"(2) if no special arrangement exists, by delivery of a copy
of the summons and complaint in accordance with an applicable
international convention on service of judicial documents; or
"(3) if service cannot be made under paragraphs (1) or (2),
by sending a copy of the summons and complaint and a notice of
suit, together with a translation of each into the official language
of the foreign state, by any form of mail requiring a signed
receipt, to be addressed and dispatched by the clerk of the court
to the head of the ministry of foreign affairs of the foreign state
concerned, or
"(4) if service cannot be made within 30 days under para-
graph (3), by sending two copies of the summons and complaint
and a notice of suit, together with a translation of each into the
official language of the foreign state, by any form of mail requir-
ing a signed receipt, to be addressed and dispatched by the clerk
of the court to the Secretary of State in Washington, District of
H. R. 11315-5
Columbia, to the attention of the Director of Special Consular
Services-and the Secretary shall transmit one copy of the papers
through diplomatic channels to the foreign state and shall send
to the clerk of the court a certified copy of the diplomatic note
indicating when the papers were transmitted.
As used in this subsection, a 'notice of suit' shall mean a notice
addressed to a foreign state and in a form prescribed by the Secretary
of State by regulation.
(b) Service in the courts of the United States and of the States
shall be made upon an agency or instrumentality of a foreign state:
" (1) by delivery of a copy of the summons and complaint in
accordance with any special arrangement for service between the
plaintiff and the agency or instrumentality or
'(2) if no special arrangement exists, by delivery of a copy
of the summons and complaint either to an officer, a managing or
general agent, or to any other agent authorized by appointment
or by law to receive service of process in the United States; or
in accordance with an applicable international convention on
service of judicial documents; or
"(3) if service cannot be made under paragraphs (1) or (2),
and if reasonably calculated to give actual notice, by delivery of
a copy of the summons and complaint, together with a translation
of each into the official language of the foreign state-
((A) as directed by an authority of the foreign state or
political subdivision in response to a letter rogatory or
request or
(B) by any form of mail requiring a signed receipt, to
be addressed and dispatched by the clerk of the court to the
agency or instrumentality to be served, or
(C) as directed by order of the court consistent with the
law of the place where service is to be made.
(c) Service shall be deemed to have been made—
"(1) in the case of service under subsection (a) (4), as of the
date of transmittal indicated in the certified copy of the diplo-
matic note; and
"(2) in any other case under this section, as of the date of
receipt indicated in the certification, signed and returned postal
receipt, or other proof of service applicable to the method of
service employed.
(d) In any action brought in a court of the United States or of
a State, a foreign state, a political subdivision thereof, or an agency
or instrumentality of a foreign state shall serve an answer or other
responsive pleading to the complaint within sixty days after service
has been made under this section.
"(e) No judgment by default shall be entered by a court of the
United States or of a State against a foreign state, a political sub-
division thereof, or an agency or instrumentality of a foreign state,
unless the claimant establishes his claim or right to relief by evidence
satisfactory to the court. A copy of any such default judgment shall
be sent to the foreign state or political subdivision in the manner
prescribed for service in this section.
"§ 1609. Immunity from attachment and execution of property of
a foreign state
"Subject to existing international agreements to which the United
States is a party at the time of enactment of this Act the property
H. R. 11315-6
in the United States of a foreign state shall be immune from attach-
ment arrest and execution except as provided in sections 1610 and
1611 of this chapter.
"§ 1610. Exceptions to the immunity from attachment or execution
(a) The property in the United States of a foreign state, as defined
in section 1603 (a) of this chapter, used for a commercial activity in
the United States, shall not be immune from attachment in aid of
execution, or from execution, upon a judgment entered by a court
of the United States or of a State after the effective date of this
Act, if-
(1) the foreign state has waived its immunity from attach-
ment in aid of execution or from execution either explicitly or
by implication, notwithstanding any withdrawal of the waiver
the foreign state may purport to effect except in accordance with
the terms of the waiver, or
" (2) the property is or was used for the commercial activity
upon which the claim is based, or
(3) the execution relates to a judgment establishing rights in
property which has been taken in violation of international law
or which has been exchanged for property taken in violation of
international law, or
(4) the execution relates to a judgment establishing rights in
property-
(A) which is acquired by succession or gift, or
'(B) which is immovable and situated in the United
States: Provided. That such property is not used for pur-
poses of maintaining a diplomatic or consular mission or
the residence of the Chief of such mission, or
"(5) the property consists of any contractual obligation or
any proceeds from such a contractual obligation to indemnify
or hold harmless the foreign state or its employees under a policy
of automobile or other liability or casualty insurance covering
the claim which merged into the judgment.
(b) In addition to subsection (a), any property in the United
States of an agency or instrumentality of a foreign state engaged in
commercial activity in the United States shall not be immune from
attachment in aid of execution, or from execution, upon a judgment
entered by a court of the United States or of a State after the effective
date of this Act, if-
"(1) the agency or instrumentality has waived its immunity
from attachment in aid of execution or from execution either
explicitly or implicitly, notwithstanding any withdrawal of the
waiver the agency or instrumentality may purport to effect except
in accordance with the terms of the waiver, or
(2) the judgment relates to a claim for which the agency or
instrumentality is not immune by virtue of section 1605 (a) (2),
(3), or (5), or 1605(b) of this chapter, regardless of whether
the property is or was used for the activity upon which the claim
is based.
(c) No attachment or execution referred to in subsections (a)
and (b) of this section shall be permitted until the court has ordered
such attachment and execution after having determined that a rea-
sonable period of time has elapsed following the entry of judgment
and the giving of any notice required under section 1608(e) of this
chapter.
H. R. 11315-7
"(d) The property of a foreign state, as defined in section 1603 (a)
of this chapter, used for a commercial activity in the United States,
shall not be immune from attachment prior to the entry of judgment
in any action brought in a court of the United States or of a State,
or prior to the elapse of the period of time provided in subsection (c)
of this section, if-
(1) the foreign state has explicitly waived its immunity from
attachment prior to judgment, notwithstanding any withdrawal
of the waiver the foreign state may purport to effect except in
accordance with the terms of the waiver, and
"(2) the purpose of the attachment is to secure satisfaction of
a judgment that has been or may ultimately be entered against
the foreign state, and not to obtain jurisdiction.
"§ 1611. Certain types of property immune from execution
"(a) Notwithstanding the provisions of section 1610 of this chapter,
the property of those organizations designated by the President as
being entitled to enjoy the privileges, exemptions, and immunities pro-
vided by the International Organizations Immunities Act shall not
be subject to attachment or any other judicial process impeding the
disbursement of funds to, or on the order of, a foreign state as the
result of an action brought in the courts of the United States or of
the States.
(b) Notwithstanding the provisions of section 1610 of this chap-
ter, the property of a foreign state shall be immune from attachment
and from execution, if-
"(1) the property is that of a foreign central bank or monetary
authority held for its own account, unless such bank or authority,
or its parent foreign government, has explicitly waived its
immunity from attachment in aid of execution, or from execution,
notwithstanding any withdrawal of the waiver which the bank,
authority or government may purport to effect except in accord-
ance with the terms of the waiver; or
"(2) the property is, or is intended to be, used in connection
with a military activity and
"(A) is of a military character, or
(B) is under the control of a military authority or
defense agency."
(b) That the analysis of "PART IV.-JURISDICTION AND VENUE" of title
28, United States Code, is amended by inserting after—
"95. Customs Court.",
the following new item:
"97. Jurisdictional Immunities of Foreign States.".
SEC. 5. That section 1391 of title 28, United States Code, is amended
by adding at the end thereof the following new subsection:
(f) A civil action against a foreign state as defined in section
1603 (a) of this title may be brought-
"(1) in any judicial district in which a substantial part of the
events or omissions giving rise to the claim occurred, or a sub-
stantial part of property that is the subject of the action is
situated;
"(2) in any judicial district in which the vessel or cargo of a
foreign state is situated, if the claim is asserted under section
1605 (b) of this title;
H. R. 11315-8
"(3) in any judicial district in which the agency or instru-
mentality is licensed to do business or is doing business, if the
action is brought against an agency or instrumentality of a foreign
state as defined in section 1603 (b) of this title; or
"(4) in the United States District Court for the District of
Columbia if the action is brought against a foreign state or politi-
cal subdivision thereof.".
SEC. 6. That section 1441 of title 28, United States Code, is amended
by adding at the end thereof the following new subsection
"(d) Any civil action brought in a State court against a foreign
state as defined in section 1603(a) of this title may be removed by
the foreign state to the district court of the United States for the dis-
trict and division embracing the place where such action is pending.
Upon removal the action shall be tried by the court without jury.
Where removal is based upon this subsection, the time limitations of
section 1446 (b) of this chapter may be enlarged at any time for cause
shown.".
SEC. 7. If any provision of this Act or the application thereof to any
foreign state is held invalid, the invalidity does not affect other pro-
visions or applications of the Act which can be given effect without
the invalid provision or application, and to this end the provisions of
this Act are severable.
SEC. 8. This Act shall take effect ninety days after the date of its
enactment.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.
FOR IMMEDIATE RELEASE
OCTOBER 22, 1976
Office of the White House Press Secretary
THE WHITE HOUSE
MEMORANDUM OF DISAPPROVAL
I am withholding my approval from S. 3553, the Foreign
Sovereign Immunities Act of 1976, for technical reasons.
In its haste to adjourn, the Congress passed identical
Senate and House bills on this subject. At the time the
Senate passed the House bill, H.R. 11315, it attempted to
vacate its earlier passage of S. 3553 but was unable to do
so because it had left the Senate's jurisdiction. The House,
unaware that the Senate had passed the House bill, also passed
the Senate bill.
In view of the Senate's action in attempting to vacate
its passage of S. 3553, there is doubt that S. 3553 has been
properly enrolled, and therefore I am separately approving
H.R. 11315 and must withhold my approval from S. 3553.
GERALD R. FORD
THE WHITE HOUSE,
October 21, 1976
####
FOR IMMEDIATE RELEASE
OCTOBER 22, 1976
Office of the White House Press Secretary
THE WHITE HOUSE
STATEMENT BY THE PRESIDENT
It is with great satisfaction that I announce that
. I have signed H.R. 11315, the Foreign Sovereign Immunities
Act of 1976. This legislation, proposed by my Administration,
continues the longstanding commitment of the United States
to seek a stable international order under the law.
It has often been said that the development of an
international legal order occurs only through small but
carefully considered steps. The Foreign Sovereign
Immunities Act of 1976 which I sign today is such a step.
This legislation will enable American citizens and
foreign governments alike to ascertain when a foreign state
can be sued in our courts. In this modern world where
private citizens increasingly come into contact with foreign
government activities, it is important to know when the
courts are available to redress legal grievances.
This statute will also make it easier for our citizens
and foreign governments to turn to the courts to resolve
ordinary legal disputes. In this respect, the Foreign
Sovereign Immunities Act carries forward a modern and
enlightened trend in international law. And it makes this
development in the law available to all American citizens.
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