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    "title": "1976/10/21 HR11315 Foreign Sovereign Immunities Act of 1976",
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    "ocrText": "The original documents are located in Box 69, folder \"10/21/76 HR11315 Foreign Sovereign\nImmunities Act of 1976\" of the White House Records Office: Legislation Case Files at the\nGerald R. Ford Presidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nExact duplicates within this folder were not digitized.\nDigitized from Box 69 of the White House Records Office Legislation Case Files at the Gerald R. Ford Presidential Library\nAPPROVED\nTHE WHITE HOUSE\nACTION\nWASHINGTON\nLast Day: October 23\nOctober 20, 1976\nMEMORANDUM FOR THE PRESIDENT\n10/20/76\nFROM:\nJIM CANNON Fallowern\nSUBJECT:\nH.R. 11315\nForeign Sovereign Immunities\nsig\nAct of 1976\n10/01/16\n1/05/76\nS. 3553 - Foreign Sovereign Immunities\nAct of 1976\nAttached for your consideration are H.R. 11315, sponsored\nby Representatives Rodino and Hutchinson, and S. 3553,\nsponsored by Senators Hruska, Eastland and Scott (Pennsylvania).\nThe enrolled bills are identical.\nThe purposes of this legislation are to more clearly\ndefine the jurisdiction of U.S. courts in suits against\nforeign states, to more clearly define the scope of the\nimmunities enjoyed by foreign states and to authorize\nthe removal to Federal court suits brought against foreign\nstates in State courts.\nCurrent U.S. law regarding sovereign immunity is incomplete\nand our courts have experienced substantial difficulties\nin cases involving foreign states. Because of the rapid\ngrowth in trade between the United States and foreign\ncountries, it has become increasingly necessary to provide\nprecise statutory guidance to our courts to adjudicate\ndisputes between domestic commercial interests and foreign\nstates. This legislation, which is the product of a\njoint endeavor between the Departments of State and Justice,\nprovides such guidance and brings U.S. practice into\nconformity with that of most other nations in resolving\nsovereign immunity questions.\nA detailed discussion of the provisions of the enrolled\nbill is provided in OMB's enrolled bill report at Tab A.\nAgency Recommendations\nIn its haste to adjourn, the Congress passed identical\nHouse and Senate bills. At the time the Senate passed H.R.\n11315, it attempted to vacate its earlier passage of S. 3553\nbut was unable to do so because it had left the Senate's\n2\njurisdiction. The House, unaware that the Senate had\npassed the House bill, also passed the Senate bill. In\nview of the fact that there is some question as to whether\nS. 3553 has been properly enrolled, the Department of\nState, the Department of Justice and the Office of Management\nand Budget recommend that you approve H.R. 11315 and take\nno action on (pocket veto) S. 3553).\nStaff Recommendations\nMax Friedersdorf, Counsel's Office (Kilberg), NSC and I\nrecommend approval of H.R. 11315 and disapproval of S. 3553.\nRecommendation\nThat you sign H.R. 11315 at Tab B.\nThat you issue the signing statement at Tab C which has\nbeen cleared by Doug Smith.\nApprove ARM\nDisapprove\nand\nThat you veto S. 3553 and sign Memorandum of Disapproval\nat Tab D which has been cleared by Doug Smith.\nFORD\n)\nOFFICE PRESIDENT SIVIS a UNITED\nEXECUTIVE OFFICE OF THE PRESIDENT\nOFFICE OF MANAGEMENT AND BUDGET\nWASHINGTON, D.C. 20503\nOCT 18 1976\nMEMORANDUM FOR THE PRESIDENT\nSubject: Enrolled Bills\n(1) H.R. 11315 - Foreign Sovereign Immunities\nAct of 1976\nSponsor - Rep. Rodino (D) New Jersey and\nRep. Hutchinson (R) Michigan\n(2) S. 3553 - Foreign Sovereign Immunities\nAct of 1976\nSponsor - Sen. Hruska (R) Nebraska,\nSen. Eastland (D) Mississippi, and\nSen. Scott (R) Pennsylvania\nLast Day for Action\nOctober 23, 1976 - Saturday\nPurpose\nDefines the jurisdiction of United States courts in suits\nagainst foreign states; defines the jurisdictional immunities\nof a foreign state; and authorizes removal of suits brought\nin State courts against foreign states.\nAgency Recommendations\nOffice of Management and Budget\nApproval of H.R. 11315\nDisapproval of S. 3553\n(Memorandum of disapproval\nattached)\nDepartment of State\nApproval of H.R. 11315\n(Signing statement\nattached)\nDepartment of Justice\nApproval of H.R. 11315\nAdministrative Office of the\nUnited States Courts\nNo objection to either bill\nDepartment of Commerce\nNo objection to either bill,\nbut defers to Justice\nSecurities and Exchange Commission\nNo recommendation received\n2\nDiscussion\nThe broad purposes of this legislation are to facilitate\nlitigation against foreign states and to minimize\nirritations in foreign relations arising out of such\nlitigation.\nCurrently, the incompleteness of the law of sovereign\nimmunity in the United States has created a substantive\nuncertainty for the courts in cases involving foreign\nstates. This, coupled with the growth in trade between\nthe United States and foreign countries, makes it increasingly\nimportant to provide precise statutory guidance to American\ncourts to adjudicate disputes between private parties and\nforeign states arising out of their commercial activities\nand other activities which are of a private law nature.\nAccordingly, the bills would establish exclusive standards\nto be used in resolving questions of sovereign immunity\nraised by foreign states before Federal and State\ncourts. The legislation is intended to preempt any other\nFederal or State law, excluding applicable international\nagreements, and to bring U.S. practice into conformity\nwith that of most other nations. It would accomplish this\npurpose by leaving sovereign immunity decisions exclusively\nto the courts, thereby discontinuing the current practice\nof judicial deference to \"suggestions of immunity\" from\nthe Executive branch (i.e., when the Department of State\nreceives requests from foreign states for sovereign\nimmunity and determines whether to request the Department\nof Justice to suggest the defense in Federal courts, it\nadheres to the so-called \"restrictive theory of immunity.\"\nUnder that theory, immunity is only granted in suits arising\nout of a foreign state's governmental acts and is not\nextended to suits arising out of its commercial or\nproprietary acts, or other acts affecting private persons.)\nThis legislation is the product of a joint endeavor by the\nDepartments of State and Justice, which began almost a\ndecade ago to modernize the law of foreign state immunity\nin the United States. It reflects several years of\nconsultation with the organized bar and the academic\ncommunity. The bill is substantially similar to legislation\nsubmitted by the Departments of State and Justice to the\nCongress.\nFORD\nSTATE\n3\nIn its haste to adjourn, the Congress passed identical\nSenate and House bills. At the time the Senate passed\nH.R. 11315, it attempted to vacate its earlier passage of\nS. 3553 but was unable to do so because it had left the\nSenate's jurisdiction. The House, unaware that the Senate\nhad passed the House bill, also passed the Senate bill.\nSummary of H.R. 11315 and S. 3553\nThe legislation consists of three principal parts:\n(1) definition of the jurisdiction of the United States\ncourts in actions against foreign states; (2) codification\nwith judicial standards of the so-called \"restrictive\ntheory of sovereign immunity\", i.e., the jurisdictional\nimmunities of foreign states; and (3) removal of suits\nbrought in State courts against foreign states to Federal\ncourts.\nOriginal Jurisdiction of Federal Courts in Actions Against\nForeign States\nOriginal jurisdiction, both subject matter and personal,\nwould be established in the U.S. District Court in any\nclaim, without regard to the amount in controversy, against\nany foreign state or its entity when either that foreign\nstate has waived immunity in the case or the case is based\non its commercial or property transactions in the U.S.\nJurisdiction could not be established when it would contra-\nvene existing treaties or other international agreements\npreserving immunity.\nJurisdictional Immunities of Foreign States\n-- Codification of the restrictive theory of sovereign immunity.\nThe so-called \"restrictive theory of sovereign immunity\"--\nthat the sovereign immunity of foreign states should be\nlimited to cases involving acts of a foreign state which\nare governmental in nature, as opposed to acts which are\neither commercial in nature or those acts which private\npersons normally perform--would be refined and codified.\nAs law it would be applicable to the foreign state, a\npolitical subdivision of the state, or an agency or\ninstrumentality of the foreign state having status as a\nTORD\n4\nlegal entity or separate person (e.g., a trading corporation,\nshipping line, export associations, etc.). Consequently,\nthe engagement of foreign governments in a non-governmental\nactivity, which is either commercial or private in nature,\nwould constitute an implied waiver of sovereign immunity\nwith respect to that activity and it would be subject to\nsuit in a Federal court.\nIn this regard, specific categories of exceptions to\njurisdictional immunity would be established.\n1. Waiver\nA foreign state may waive immunity, either explicitly\nby renouncing its immunity by treaty, implicitly by\nagreeing to arbitration of a case under the laws of\nanother country, or by filing a responsive pleading\nin a suit. However, mere appearance by the foreign\nstate in another action unrelated would not confer\npersonal jurisdiction or constitute a waiver of\nimmunity. In transactions in which a foreign state\nhas agreed to waiver of sovereign immunity, that\nwaiver could only be withdrawn in a manner consistent\nwith the expression of waiver in the original agreement.\n2. Commercial Activity\n\"Commercial activity\" includes the broad spectrum of\nactivity from a singular commercial transaction to the\nregular conduct of a commercial enterprise. Under this\ndefinition, the fact that goods or services are to be\nprocured via contract for public purposes would be\nirrelevant; the commercial nature of the transaction\nitself establishes the basis for the court's\njurisdiction. In the final analysis, the court would make\nthe determination whether or not an activity of a foreign\nstate is commercial or public, thereby requiring the\nforeign state to plead sovereign immunity as an\naffirmative defense, if the case does not relate to\neither a treaty or other international agreement\nmaintaining the immunity of that foreign state or\nto debt obligations incurred for general public\npurposes.\n5\n3. Ownership or Expropriation of Property\nImmunity would be denied in cases involving a foreign\ngovernment's ownership of real or \"immovable\" property\nlocated in the U.S. or when property owned by an\nentity of the U.S. and located in the foreign country\nhas been seized or nationalized without compensation\nas required by international law.\n4. Non-commercial Torts\nImmunity would be denied a foreign state in all tort\nclaims for monetary damages caused by the tortious\nacts or omissions of a foreign state or its officials\nor employees acting within the scope of their\nauthority and occurring within U.S. jurisdiction,\nunless specifically excepted in statute or treaty.\nImmunity of foreign diplomats or consular representa-\ntives, themselves, would be unaffected.\n5. Maritime Liens\nImmunity would be denied to foreign states in cases\nwhere a suit in admiralty is brought to enforce\na maritime lien based upon a commercial activity of\nthat foreign state or its vessels.\nThus, the liability of a foreign state or its entity in\ncases where immunity is denied would be identical to that\nof a private individual defendant. The only exception\nwould be that the foreign state cannot be held liable for\ninterest on the monetary value of the claim prior to\njudgment or for punitive damages.\n-- Extent of liability.\nIf a foreign state, political subdivision, agency, or\ninstrumentality is not entitled to immunity from jurisdiction,\nit would be subject to the same liability as a private party\nunder like circumstances. However, the tort liability of the\nforeign state or its political subdivision would not extend\nto punitive damages.\nFORD\n6\n-- Counterclaims\nForeign states would be denied immunity in certain instances\nwhen a counterclaim is brought against the foreign state\nwhich has brought an action or intervened in an action\nin a Federal or State court.\n-- Service of Process\nA hierarchy of procedures for service of process would be\nestablished by the bill. Sequentially, these methods for\nservice of process are:\n1. A special agreement between plaintiff and defendant\nforeign state would be made on the preferred procedure\nfor service of process.\n2. If no special arrangement exists, service would be\naccomplished: (a) in accordance with an applicable\ninternational convention on service of judical documents;\n(b) by the provision of a letter rogatory (letter from\nthe U.S. Court to the court of the foreign state requesting\nthe foreign court to assist the U.S. court) or request\nfor ultimate service in a foreign country as directed\nby the authority of that state (this is a preliminary\nadministrative step leading to service of process in a\nforeign country) ; or (c) by registered mail to the foreign\nminister or official in charge of the foreign affairs\nof the foreign state.\n3. If 30 days have passed without proof that service was\nmade by any of the preceding methods, service would be\nmade through diplomatic channels as a last resort.\nService on foreign agencies or instrumentalities (e.g.,\nforeign companies, trading associations, etc.) would be made\nin a manner similar to the hierarchy of methods outlined\nabove, except diplomatic channels would not be used. In\naddition, service could also be made in accordance with the\nlaw and procedures of the foreign state.\nNo judgment of default could be entered against a foreign\nstate or its entities unless sixty days have elapsed and\nthe court determines that the claimant has substantially\nproved the validity of the claim with evidence.\n7\n-- Attachment and Execution of Property\nThe legislation would affirm that the property of a foreign\nstate is generally immune from attachment and execution.\nHowever, in addition to explicit or implied waiver, other\nexceptions to immunity would be established when property\nis: (1) used for commercial purposes in the U.S. and upon\nwhich the claim is based; (2) taken in violation of inter-\nnational law; (3) acquired by succession or gift; (4) immovable;\nor (5) under a contractual obligation.\n-- Property of International Organizations, Central Bank\nFunds and Military Property\nProperty held by international organizations, which have been\ndesignated by the President pursuant to the International\nOrganizations Immunities Act, would not be subject to attach-\nment and execution, e.g., the International Monetary Fund\nand the World Bank. In addition, funds of a foreign central\nbank deposited in the U.S. for that bank's \"own account\"\nand military property would also be similarly immune.\n- Venue\nVenue would be established in the judicial district:\n(1) where the cause of action substantially occurred;\n(2) for suits in admiralty to enforce a maritime lien\nagainst a vessel or cargo of a foreign state where the\nvessel is located; (3) where the agency or instrumentality\nis licensed to do business or doing business; and (4) for\nthe District of Columbia.\nRemoval of Cases from State Courts\nSuits in State courts with a party foreign state would be\nremoved to the U.S. District Court at the discretion of\nthe foreign state, even when there are multiple defendants\nof which one or more may be a citizen of the State in which\nthe action was brought. This provision responds to the\npotential sensitivity of actions against foreign states\nby ensuring for them the opportunity to litigate their\ncasesin the U.S. District Court. Consequently, a foreign\nstate has the option of litigating under Federal law\nrather than being subjected to the differing laws and\njudicial procedures of the States.\nFinally, the legislation would take effect 90 days after\nenactment.\n8\nRecommendation\nIn its attached views letter, the Department of Justice\nadvises that \"in view of the Senate's action vacating\nits passage of S. 3553, there is most serious doubt that\nS. 3553 has been properly enrolled, and we recommend that\nno action be taken on S. 3553.\" We concur and recommend\nthat you approve H.R. 11315 and take no action on S. 3553.\nA proposed signing statement is enclosed with the State\nviews letter for your consideration. We have also\nprepared for your consideration a brief memorandum of\ndisapproval which explains why no action is being taken on\nS. 3553.\nPaul H. O'Neill Chein\nActing Director\nEnclosures\nFORD LIBRARY\nB\nADMINISTRATIVE OFFICE OF THE\nUNITED STATES COURTS\nSUPREME COURT BUILDING\nWASHINGTON, D.C. 20544\nROWLAND F. KIRKS\nDIRECTOR\nOctober 7, 1976\nWILLIAM E. FOLEY\nDEPUTY DIRECTOR\nMr. James M. Frey\nAssistant Director\nfor Legislative Reference\nOffice of Management and Budget\nWashington, D. C.\nDear Mr. Frey:\nThis is in response to your enrolled bill\nrequest of October 6, 1976, transmitting for views\nand recommendations S. 3553, \"To define the\njurisdiction of United States courts in suits against\nforeign states, the circumstances in which foreign\nstates are immune from suit and in which execution\nmay not be levied on their property, and for other\npurposes.\"\nIn considering this legislation the Judicial\nConference of the United States proposed a change in\nthe venue section which has not been incorporated,\nbut no objection is interposed to executive approval\nof S. 3553.\nSincerely,\n(in - William Deputy Director E. Foley\nSTATE FORD LIBRARY\nDEPARTMENT OF COMMERCE\nGENERAL COUNSEL OF THE\nUNITED STATES DEPARTMENT OF COMMERCE\nUNITED STATES OF AMERICA\nWashington, D.C. 20230\nOCT 8 1976\nHonorable James T. Lynn\nDirector, Office of Management\nand Budget\nWashington, D. C. 20503\nAttention: Assistant Director for Legislative Reference\nDear Mr. Lynn:\nThis is in reply to your request for the views of this Department\nconcerning S. 3553, an enrolled enactment\n\"To define the jurisdiction of United States courts in suits\nagainst foreign states, the circumstances in which foreign\nstates are immune from suit and in which execution may\nnot be levied on their property, and for other purposes,\"\nto be cited as the \"Foreign Sovereign Immunities Act of 1976\".\nThe enrolled enactment would codify the \"restrictive theory of\nsovereign immunity\" which provides that foreign states are not\nimmune from the jurisdiction of U.S. courts insofar as their com-\nmercial activities are concerned and that their commercial property\nmay be levied upon for the satisfaction of judgments rendered against\nthem arising out of their commercial activities. It would also specify\nhow foreign states or political subdivisions are to be served with\nprocess in United States District Courts.\nThe Department of Commerce has no objection to approval by the\nPresident of S. 3553.\nEnactment of this legislation would require no expenditure of\nfunds by this Department.\n25 minth\nREVOLUTION\nAMERICAN\nBICENTENNIAL\n1776-1976\n©\nTHE WHITE HOUSE\nWASHINGTON\nOctober 12, 1976\nMEMO FOR ROBERT LINDER\nFROM: TOM JONES\nThe Senate Parliamentarian, Murray Zweben, called\nmy office this morning to leave word with me that\nhe had held conversations with the House\nParliamentarian, William Brown, and that they had\njointly agreed to recommend the following:\n2 bills were passed by Congress in the\nfinal hours and they were both\nidentical - S. 3553 and H.R. 11315.\nIf the President decides to approve\none of them they both recommend that\nhe sign the House Bill, H.R. 11315,\nsince it was actually passed first,\nand allow the Senate bill to be\npocket vetoed.\nTom\nTom Jones\np.s.\nneither bill has reached the White House\nas yet but they will be in the last batch\nto come from Congress.\nDEPARTMENT OF COMMERCE\nGENERAL COUNSEL OF THE\nUNITED STATES DEPARTMENT OF COMMERCE\nUNITED STATES OF AMERICA\nWashington, D.C. 20230\nOCT 13 1976\nHonorable James T. Lynn\nDirector, Office of Management\nand Budget\nWashington, D. C. 20503\nAttention: Assistant Director for Legislative Reference\nDear Mr. Lynn:\nThis is in reply to your request for the views of this Department\nconcerning H.R. 11315, an enrolled enactment\n\"To define the jurisdiction of United States courts in\nsuits against foreign states, the circumstances in\nwhich foreign states are immune from suit and in\nwhich execution may not be levied on their property,\nand for other purposes. 11\nH. R. 11315 is for the same purpose as, and practically identical\nto, S. 3553 which was also enrolled in the closing days of the Congress.\nBy letter of October 8, 1976, the Department stated that it would have\nno objection to approval by the President of S. 3553. We further stated\nthat enactment of the legislation would require no expenditure of funds\nby this Department.\nWe would also have no objection to approval by the President of\nH.R. 11315. However, we would defer to the views of the Department\nof Justice as to which of these two bills should be approved by the\nPresident.\nNoth\nAMERICAN REVOLUTION INFORMATION\n1776-1976\n2\ne\n\"ASSISTANT ATTORNEY GENERAL\nLEGISLATIVE AFFAIRS\nDepartment of Justice\nWashington, D.C. 20530\nOctober 13, 1976\nHonorable James T. Lynn\nDirector, Office of Management\nand Budget\nWashington, D. C. 20503\nDear Mr. Lynn:\nIn compliance with your request, I have examined\na facsimile of the enrolled bill, H.R. 11315, \"To define\nthe jurisdiction of United States courts in suits against\nforeign states, the circumstances in which foreign states\nare immune from suit and in which execution may not be\nlevied on their property, and for other purposes.\"\nThe bill is the product of a joint endeavor by the\nDepartments of State and Justice, which began almost a\ndecade ago, to modernize the law of foreign state immunity\nin the United States. The bill represents several years'\nconsultation involving three Administrations, the\norganized bar and the academic community. A precursor\nof the bill was introduced in the Congress three years\nago (H.R. 3493 and S. 566, 93d Cong., 1st Sess.).\nThe bill codifies as a matter of Federal law the\nso-called \"restrictive theory of sovereign immunity\"\n(pursuant to which foreign states are subject to suit\nwith respect to their commercial and private law activi-\nties). The bill gives detailed guidance to the courts\non the standards to be employed in determining questions\nof sovereign immunity. These are consistent with the\nprinciples applied in other developed legal systems.\nThe task of determining whether a foreign state is\nentitled to immunity will be transferred wholly to the\ncourts, and the Department of State will no longer\nexpress itself on requests for immunity directed to it\nby the courts or by foreign states. The means whereby\nprocess may be served on foreign states is specified in\ndetail. Finally, foreign states will no longer be\naccorded absolute immunity from execution on judgments\nrendered against them, as is now the case, and their\nimmunity from execution will conform closely to the\nrestrictive theory of immunity from jurisdiction.\nTORD\n- 2 -\nThe central principle of the bill is to make the\nquestion of a foreign state's entitlement to immunity\nan issue justiciable by the courts, without partici-\npation by the Departments of State and Justice. At\npresent, the courts generally defer to the views of the\nDepartment of State, which is formally made of record\nin court by this Department. This method of determining\nimmunity puts the Executive Branch in the difficult\nposition of effectively determining whether the plaintiff\nwill have his day in court. While the Department of\nState has attempted to provide internal procedures which\nwould give both the plaintiff and the defendant foreign\nstate a hearing, it is not satisfactory that an Executive\nagency should determine whether a plaintiff will be\npermitted to pursue his cause of action in the courts.\nQuestions of such moment are appropriate for resolution\nby the courts, rather than by the Executive Branch. This\nalso is the universal method followed in other legal\nsystems.\nA companion bill in the Senate, S. 3553, has also\nbeen enrolled. S. 3553 was initially passed in the\nSenate before that Chamber had received H.R. 11315 from\nthe House. After the House-passed version of the bill\nreached the Senate, the Senate vacated its passage of\nS. 3553 and passed H.R. 11315. In the closing hours of\nthe 94th Congress, the House of Representatives, being\nunaware that the Senate had passed the House-version of\nthe bill, also passed the Senate-version of the bill.\nIn view of the Senate's action vacating its passage\nof S. 3553, there is the most serious doubt that S. 3553\nhas been properly enrolled, and we recommend that no\naction be taken on S. 3553.\nI wish to note the following errors on the facsimile\nof H.R. 11315 which I have examined:\n-In Sec. 2 (b), in the heading for new\nSec. 1330, the first word should be \"Actions\",\ninstead of \"Action\".\n- 3 -\n-In Sec. 4 (a), in the new headings for\nChapter 97, after Sec. 1608, there should be\na semicolon between \"time to answer\" and\n\"default\".\n-In Sec. 4 (a), in new Sec. 1604, there\nshould be a comma on line two after \"this\nAct\".\n-In Sec. 4 (a), in new Sec. 1609, there\nshould be commas on line two after \"this\nAct\", and on line four between the words\n\"attachment\" and \"arrest\".\nThe Department of Justice recommends Executive\napproval of H.R. 11315.\nSincerely,\nMichael Ue Welenow\nMICHAEL M. UHLMANN\nAssistant Attorney General\nDEPARTMENT OF STATE\nWashington, D.C. 20520\nOCT 15 1976\nRe: H.R.11315 and S.3553 - Foreign\nSovereign Immunities Act of 1976\nDear Mr. Lynn:\nThe Department of State wholeheartedly recommends\nthat the President sign the enrolled bill, H.R. 11315.\nThis was an Administration proposal drafted by the\nDepartments of State and Justice. H.R.11315, as\npassed by the Congress, is virtually identical to the\nAdministration's bill. Moreover, any variances have\nbeen reviewed and fully concurred in by the Departments\nof State and Justice.\nBesides H.R. .11315, the Congress also passed the\nSenate version of the bill, S.3553. The Senate bill\nis identical to the House bill. Clearly, only one\nof the bills should be signed, and we believe it more\nappropriate to sign the House bill, H.R. 11315. The\nHouse undertook the principal legislative effort: it\nheld the only hearings and its report was filed before\nthe Senate's report. Also, the Senate belatedly at-\ntempted to suspend action on its bill in favor of\nH.R.11315. See Cong. Rec., Oct. 1, 1976, page S 17721.\nThus, the Senate bill should be ignored and only\nH.R. 11315 should be signed.\nThe legislation had no opposition in the Congress.\nTo the contrary, it had the support of the American\nBar Association, and of other bar groups, international\nlegal scholars and members of the business community.\nThe bill was the product of over ten years of work\ninvolving three administrations, members of the academic\ncommunity, and many practicing lawyers.\nThe Honorable\nJames T. Lynn,\nDirector,\nOffice of Management and Budget.\nFORD LIBRARY sivere\n- 2 -\nH.R.11315, if signed into law, would accomplish\nthe following objectives:\n- It would codify modern international law (and\nrecent U.S. decisions) on when foreign states\nand their state-owned enterprises are immune\nfrom suit in United States courts (the basic\nprinciple is that foreign states have immunity\nfor their public acts, but not for their\ncommercial or private acts).\n- It would bring United States practice in this\narea up-to-date with the practice in other\ncountries.\n- It would reduce diplomatic irritants by leaving\nsovereign immunity decisions exclusively to\nthe courts. Under current American practice,\na foreign government has the option of asking\nthe Department of State to decide questions of\nsovereign immunity. If it exercises this option,\nthe foreign state can bring diplomatic influences\nto bear, thereby converting an ordinary lawsuit\ninto a diplomatic irritant. By contrast, when\nthe United States is sued abroad, we cannot\nrefer sovereign immunity issues to a Ministry\nof Foreign Affairs, but must litigate these issues\nexclusively in foreign courts. Thus, H.R. 11315\nwill offer foreign states the same legal remedies\nthat are offered in other countries.\n- It would for the first time, provide a statutory\nprocedure for making service of process on a\nforeign state or its entities. Such procedures\nhave long existed in other countries.\n- It would preclude the commencement of a lawsuit\nby seizing foreign government property, a\npractice which has caused diplomatic problems\nin the past. But the bill does provide a\nmethod whereby a private litigant can, under\ncourt direction and as a last resort, satisfy\na final judgment by executing on commercial property\nowned by a foreign state.\nLIBRARY\n- 3 -\nThe legislation will not increase budgetary costs\nwithin the Executive Branch. Indeed, by transferring\nimmunity decisions to the courts, H.R. 11315 will save\nman-hours now spent by the Departments of State and\nJustice on sovereign immunity cases. And a court\nalready familiar with a lawsuit can more efficiently\ndecide a sovereign immunity defense raised in that\nlawsuit.\nAttached for your consideration, is a proposed\nsigning statement for the President. Since this legis-\nlation marks a significant step in the longstanding\ncommitment of the United States to international order\nunder law, we believe that a signing statement would\nbe appropriate.\nSincerely,\nKempen B. Junk\nKempton B\nActing Assistant Secretary\nfor Congressional Relations\nAttachment:\nProposed Signing Statement\nADMINISTRATIVE OFFICE OF THE\nUNITED STATES COURTS\nSUPREME COURT BUILDING\nWASHINGTON, D.C. 20544\nROWLAND F. KIRKS\nDIRECTOR\nOctober 15, 1976\nWILLIAM E. FOLEY\nDEPUTY DIRECTOR\nMr. James M. Frey\nAssistant Director for\nLegislative Reference\nOffice of Management and Budget\nWashington, D. C. 20503\nDear Mr. Frey:\nThis is in response to your enrolled bill\nrequest of October 14, 1976 transmitting for views\nand recommendations H.R. 11315, \"To define the juris-\ndiction of United States courts in suits against\nforeign states, the circumstances in which foreign\nstates are immune from suit and in which execution\nmay not be levied on their property, and for other\npurposes.\"\nIn considering this legislation the Judicial\nConference of the United States proposed a change in\nthe venue section which has not been incorporated\nbut no objection is interposed to executive approval\nof H.R. 11315.\nSincerely,\nWilliam Deputy Director E. E. Foley\nTHE WHITE HOUSE\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.:\n10\nDate: October 19\nTime:\n200pm\nFOR ACTION: NSC on\nCC (for information): Jack Marsh\nMax Friedersdorf\nEd Schmults\nBobbie Kilberg agreeu/OMB agree\nDick Parsons\nSteve McConahey def\nRobert Hartmann\non\nFROM THE STAFF SECRETARY\nDUE: Date: October 20\nTime: 1000mm\nSUBJECT:\nH.R.11315-Foreign Soverign Immunities Act of 1976\nS.3553-Foreign Sovereigh Immunities Act of 1976\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX For Your Comments\nDraft Remarks\nREMARKS:\npleaee return to judd öbhaston, ground floor west wing\nTOTAL\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nK. R. COLE, JR.\ntelephone the Staff Secretary immediately.\nFor the President\n10/19/76 - 3:30 pm\nn\nTHE WHITE HOUSE\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.:\n10\nDate: October 19\nTime:\n200pm\nFOR ACTION: NSC\ncc (for information): Jack Marsh\nMax Friedersdorf\nEd Schmults\nBobbie Kilberg\nSteve McConahey\nDick Parsons\nRobert Hartmann\nFROM THE STAFF SECRETARY\nDUE: Date: October 20\nTime: 1000am\nSUBJECT:\nH.R.11315-Foreign Soverign Immunities Act of 1976\nS.3553-Foreign Sovereign Immunities Act of 1976\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX For Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\n10/19/76 - Copy sent for researching. nm\n10/20/76 - Recearched copy returned. nm\nHouse bill\nSTATE R. FORD CIBRARY\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\ntyor use President\nJames M. Cannoms\nSIGNING STATEMENT\nH.R. 11315\nIt is with great satisfaction that I announce today\nthe signing of the Foreign Sovereign Immunities Act of\n1976. This legislation, proposed by my Administration,\ncontinues the longstanding commitment of the United\nStates to seek a stable international order under law.\nIt has often been said that the development of an\ninternational legal order occurs only through small but\ncarefully considered steps. The Foreign Sovereign Im-\nmunities Act of 1976X which I sign today is such a step.\nThis legislation will enable American citizens and\nforeign governments alike to ascertain when a foreign state\ncan be sued in our courts. In this modern world where\nprivate citizens increasingly come into contact with\nforeign government activities, it is important to know\nwhen the courts are available to redress legal grievances.\nThis statute will also make it easier for our citizens\nand foreign governments to turn to the courts to resolve\nordinary legal disputes. In this respect, the Foreign\nSovereign Immunities Act carries forward a modern and en-\nlightened trend in international law. And it makes this\ndevelopment in the law available to all American citizens.\nMEMORANDUM OF DISAPPROVAL\nI am withholding my approval from S. 3553, the Foreign\nSovereign Immunities Act of 1976, for technical reasons.\nIn its haste to adjourn, the Congress passed identical\nSenate and House bills on this subject. At the time the\nSenate passed the House bill, H.R. 11315, it attempted\nto vacate its earlier passage of S. 3553 but was unable\nto do so because it had left the Senate's jurisdiction.\nThe House, unaware that the Senate had passed the House\nbill, also passed the Senate bill.\nIn view of the Senate's action in attempting to vacate\nits passage of S. 3553, there is doubt that S. 3553 has\nbeen properly enrolled, and therefore I am separately\napproving H.R. 11315 and must withhold my approval from\nS. 3553.\nother\nTHE WHITE HOUSE\nOctober , 1976\n10/19/76 - 3:30 pm\nn\nTHE WHITE HOUSE\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.:\n10\nDate: October 19\nTime:\n200pm\nFOR ACTION: NSC\ncc (for information): Jack Marsh\nMax Friedersdorf\nEd Schmults\nBobbie Kilberg\nQ20\nSteve McConahey\nDick Parsons\nRobert Hartmann\nto 10/20 Res\n9:25\nGAn\nto DUS 10/20 smokfine\nto\nFROM THE STAFF SECRETARY\nDUE: Date: October 20\nTime: 1000am\nSUBJECT:\nH.R.11315-Foreign Soverign Immunities Act of 1976\nS.3553-Foreign Sovereign Immunities Act of 1976\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX For Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nFor the President\nJames M. Cannom\n\"\n06/jme\nSIGNING STATEMENT\nH.R. 11315\nIt is with great satisfaction oh that I announce today\nthe signing of the Foreign Sovereign Immunities Act of\n1976. This legislation, proposed by my Administration,\ncontinues the longstanding commitment of the United\nStates to seek a stable international order under law.\nIt has often been said that the development of an\ninternational legal order occurs only through small but\ncarefully considered steps. The Foreign Sovereign Im-\nmunities Act of 1976, which I sign today, is such a step.\nof\nThis legislation will enable American citizens and\nforeign governments alike to ascertain when a foreign state\ncan be sued in our courts. In this modern world where\nprivate citizens increasingly come into contact with\nforeign government activities, it is important to know\nwhen the courts are available to redress legal grievances.\nThis statute will also make it easier for our citizens\nand foreign governments to turn to the courts to resolve\nordinary legal disputes. In this respect, the Foreign\nSovereign Immunities Act carries forward a modern and en-\nlightened trend in international law. And it makes this\ndevelopment in the law available to all American citizens.\nMEMORANDUM OF DISAPPROVAL\nok\nI am withholding my approval from S. 3553, the Foreign\nOh\nSovereign Immunities Act of 1976, for technical reasons.\nIn its haste to adjourn, the Congress passed identical\nSenate and House bills on this subject. At the time the\nSenate passed the House bill, H.R. 11315, it attempted\nto vacate its earlier passage of S. 3553 but was unable\nto do so because it had left the Senate's jurisdiction.\nThe House, unaware that the Senate had passed the House\nbill, also passed the Senate bill.\nIn view of the Senate's action in attempting to vacate\nits passage of S. 3553, there is doubt that S. 3553 has\nbeen properly enrolled, and therefore I am separately\napproving H.R. 11315 and must withhold my approval from\nS. 3553. Ob\nTHE WHITE HOUSE\nOctober , 1976\nTHE WHITE HOUSE\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.:\n106\n10\nDate:\nTime:\nOctober 19\n200pm\nFOR ACTION: NSC\ncc (for information): Jack Marsh\nMax Friedersdorf\nEd Schmults\nBobbie Kilberg\nSteve McConahey\nDick Parsons\nRobert Hartmann\nFROM THE STAFF SECRETARY\nDUE: Date: October 20\nTime: 1000am\nSUBJECT:\nH.R.11315-Foreign Soverign Immunities Act of 1976\nS.3553-Foreign Sovereign Immunities Act of 1976\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX For Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\nConcur in OMB's recommendation.\nKen Lazarus 10/19/76\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nfor the President\nJames M. Cannows:\nTHE WHITE HOUSE\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.:\n10\nDate: October 19\nTime:\n200pm\nFOR ACTION: NSC\ncc (for information): Jack Marsh\nMax Friedersdorf\nEd Schmults\nBobbie Kilberg\nSteve McConahey\nDick Parsons\nRobert Hartmann\nFROM THE STAFF SECRETARY\nDUE: Date: October 20\nTime: 1000am\nSUBJECT:\nH.R.11315-Foreign Soverign Immunities Act of 1976\nS.3553-Foreign Sovereign Immunities Act of 1976\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX For Your Comments\nDraft Remarks\nREMARKS: Approve H.R.11315; pocket veto S.3553.\nplease return to judy johnston, ground floor west wing\nRt\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\ntyor the President\nJames M. Cannors:\nTHE WHITE HOUSE\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.:\n10\n0660\nDate: October 19\nTime:\n200pm\n18b\nFOR ACTION: NSC\nCC (for information): Jack Marsh\nMax Friedersdorf\nEd Schmults\nBobbie Kilberg\nSteve McConahey\nDick Parsons\nRobert Hartmann\nFROM THE STAFF SECRETARY\nDUE: Date: October 20\nTime: 1000am\nSUBJECT:\nH.R.11315-Foreign Soverign Immunities Act of 1976\nS.3553-Foreign Sovereign Immunities Act of 1976\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX For Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\nRummand approval of\n/d.R. 11315, disappravar\nM S.3553.\nBup\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nFor the President\nJames M. Cannows:\nMEMORANDUM\n#5825\nNATIONAL SECURITY COUNCIL\nOctober 20, 1976\nMEMORANDUM FOR:\nJAMES M. CANNON\nFROM:\nJeanne W. Davis WH\nfor\nSUBJECT:\nEnrolled Bills\nH.R. 11315 and S. 3553\nThe NSC staff concurs in the proposed enrolled bill\nH.R. 11315-Foreign Sovereign Immunities Act of 1976,\nand concurs in OMB's disapproval of S. 3553-Foreign\nSovereign Immunities Act of 1976.\nSTATEMENT BY THE PRESIDENT\nIt is with great satisfaction that I announce today\nthe signing of H.R. 11315, the Foreign Sovereign Immunities\nAct of 1976. This legislation, proposed by my Administration,\ncontinues the longstanding commitment of the United States\nto seek a stable international order under the law.\nIt has often been said that the development of an\ninternational legal order occurs only through small but\ncarefully considered steps. The Foreign Sovereign\nImmunities Act of 1976 which I sign today is such a step.\nThis legislation will enable American citizens and\nforeign governments alike to ascertain when a foreign state\ncan be sued in our courts. In this modern world where\nprivate citizens increasingly come into contact with foreign\ngovernment activities, it is important to know when the\ncourts are available to redress legal grievances.\nThis statute will also make it easier for our citizens\nand foreign governments to turn to the courts to resolve\nordinary legal disputes. In this respect, the Foreign\nSovereign Immunities Act carries forward a modern and\nenlightened trend in international law. And it makes this\ndevelopment in the law available to all American citizens.\nSIGNING STATEMENT\nH.R. 11315\nIt is with great satisfaction that I announce today\nthe signing of the Foreign Sovereign Immunities Act of\n1976. This legislation, proposed by my Administration,\ncontinues the longstanding commitment of the United\nStates to seek a stable international order under law.\nIt has often been said that the development of an\ninternational legal order occurs only through small but\ncarefully considered steps. The Foreign Sovereign Im-\nmunities Act of 1976, which I sign today, is such a step.\nThis legislation will enable American citizens and\nforeign governments alike to ascertain when a foreign state\ncan be sued in our courts. In this modern world where\nprivate citizens increasingly come into contact with\nforeign government activities, it is important to know\nwhen the courts are available to redress legal grievances.\nThis statute will also make it easier for our citizens\nand foreign governments to turn to the courts to resolve\nordinary legal disputes. In this respect, the Foreign\nSovereign Immunities Act carries forward a modern and en-\nlightened trend in international law. And it makes this\ndevelopment in the law available to all American citizens.\nSIGNING STATEMENT\nH.R. 11315\nIt is with great satisfaction that I announce today\nthe signing of the Foreign Sovereign Immunities Act of\n1976. This legislation, proposed by my Administration,\ncontinues the longstanding commitment of the United\nStates to seek a stable international order under law.\nIt has often been said that the development of an\ninternational legal order occurs only through small but\ncarefully considered steps. The Foreign Sovereign Im-\nmunities Act of 1976X which I sign today, is such a step.\nThis legislation will enable American citizens and\nforeign governments alike to ascertain when a foreign state\ncan be sued in our courts. In this modern world where\nprivate citizens increasingly come into contact with\nforeign government activities, it is important to know\nwhen the courts are available to redress legal grievances.\nThis statute will also make it easier for our citizens\nand foreign governments to turn to the courts to resolve\nordinary legal disputes. In this respect, the Foreign\nSovereign Immunities Act carries forward a modern and en-\nlightened trend in international law. And it makes this\ndevelopment in the law available to all American citizens.\nSTATEMENT BY THE PRESIDENT\nIt is with great satisfaction that I announce today\nH.R. 11315,\nthe signing of the Foreign Sovereign Immunities Act of\n1976. This legislation, proposed by my Administration,\ncontinues the longstanding commitment of the United States\nto seek a stable international order under law.\nIt has often been said that the development of an\ninternational legal order occurs only through small but\ncarefully considered steps. The Foreign Sovereign\nImmunities Act of 1976 which I sign today is such a step.\nThis legislation will enable American citizens and\nforeign governments alike to ascertain when a foreign state\ncan be sued in our courts. In this modern world where\nprivate citizens increasingly come into contact with foreign\ngovernment activities, it is important to know when the\ncourts are available to redress legal grievances.\nThis statute will also make it easier for our citizens\nand foreign governments to turn to the courts to resolve\nordinary legal disputes. In this respect, the Foreign\nSovereign Immunities Act carries forward a modern and\nenlightened trend in international law. And it makes this\ndevelopment in the law available to all American citizens.\nFORD LIBRARY\n94TH CONGRESS\n}\nHOUSE OF REPRESENTATIVES\nREPORT\n2d Session\nNo. 94-1487\nJURISDICTION OF UNITED STATES COURTS IN SUITS\nAGAINST FOREIGN STATES\nSEPTEMBER 9, 1976.-Committed to the Committee of the Whole House on the\nState of the Union and ordered to be printed\nMr. FLOWERS, from the Committee on the Judiciary,\nsubmitted the following\nREPORT\n[Including cost estimate of the Congressional Budget Office]\n[To accompany H.R. 11315]\nThe Committee on the Judiciary, to whom was referred the bill\n(H.R. 11315) to define the jurisdiction of United States courts in\nsuits against foreign states, the circumstances in which foreign states\nare immune from suit and in which execution may not be levied on\ntheir property, and for other purposes, having considered the same,\nreport favorably thereon with amendments and recommend that the\nbill do pass.\nThe amendments are as follows:\nPage 1, line 4 : Strike \"1975\" and insert \"1976\".\nPage 2, lines 11 and 12 Strike \"of process.\"\nPage 3, following line 13 : Strike \"1606. Claims involving the public\ndebt. and insert \"1606. Extent of liability.\", and strike \"1608. Service\nof process; time to answer; default.\" and insert \"1608. Service; time to\nanswer; default.\"\nPage 4, line 16 : Strike \"and\" and insert \"or.\"\nPage 4, lines 12 and 13: Strike \"sections 1606 and\" and insert\n\"section\".\nPage 5, line 19 Strike \"and future.\"\nPage 5, line 20 : After \"party\" insert \"at the time of enactment of\nthis Act\".\nPage 8, line 5 : Strike \"service\" and insert \"delivery.\"\nPage 8, line 9 : Strike \"served,\" and insert \"delivered,\".\nPage 8, line 10 : Strike \"served\" and insert \"delivered.\"\nPage 8, line 15 : Strike \"service\" and insert \"delivery.\"\nPage 8, line 18 After \"days\" insert \"either.\"\nPage 8, line 18: Strike \"service of process\" and insert \"delivery of\nnotice.\"\nPage 8, line 19 After \"section\" insert \"or, in the case of a party who\nwas unaware that the vessel or cargo of a foreign state was involved,\n2\n3\nof the date such party determined the existence of the foreign state's\n'(B) by sending a copy of the summons and of the\ninterest.\"\ncomplaint, together with a translation into the official lan-\nPage 8, line 20 Strike \"served\" and insert \"delivered.\"\nguage of the foreign state, by any form of mail requiring\nPage 9, after line 3: Insert 1606. Extent of Liability.\"\na signed receipt to be addressed and dispatched by the\nPage 9, line 4: Strike (c)\".\nclerk of the court to the official in charge of the foreign\nPage 9, lines 5 and 6: Strike \"this section or under section 1606\" and\naffairs of the foreign state which is, or whose political\ninsert \"section 1605\".\nsubdivision is, named in the complaint; or\nPage 9, lines 9 and 10 Strike \"itself, as distinguished from a politi-\n(3) if proof of service is not made within sixty days after\ncal subdivision thereof or from\" and insert \"except for.\"\nservice has been initiated under paragraph (1) or (2) of this\nPage 9, line 10: After \"instrumentality\" insert \"thereof.\"\nsubsection, and if-\nPage 9, lines 10, 11, and 12 Strike \"of a foreign state, shall not be\n(A) the claim for relief arises out of an activity or\nliable in tort for interest prior to judgment or\" and insert \"shall not\nact in the United States of a diplomatic or consular rep-\nbe liable.\"\nresentative of the foreign state for which the foreign state\nPage 9, lines 20 through 25 and page 10 lines 1 through 12 Strike\nis not immune from jurisdiction under section 1605 of\nthis title, or\n\"§ 1606. Claims involving the public debt\n(B) the foreign state uses diplomatic channels for\n\"(a) For purposes of this section, a 'foreign state' shall not include\nservice upon the United States or any other foreign\na political subdivision of a foreign state or an agency or instrumental-\nstate, or\nity of a foreign state.\n\"(C) the foreign state has not notified the Secretary\n(b) Notwithstanding the provisions of section 1605 of this chapter,\nof State prior to the institution of the proceeding in ques-\na foreign state shall be immune from the jurisdiction of the courts of\ntion that it prefers that service not be made through\nthe United States and of the States in any case relating to debt obliga-\ndiplomatic channels,\ntions incurred for general governmental purposes unless-\nby sending two copies of the summons and of the complaint,\n\"(1) the foreign state has waived its immunity explicitly, not-\ntogether with a translation into the official language of the\nwithstanding any withdrawal of the waiver which the foreign\nforeign state, by any form of mail requiring a signed receipt\nstate may purport to effect except in accordance with the terms of\nto be addressed and dispatched by the clerk of the court, to\nthe waiver; or\nthe Secretary of State at Washington, District of Columbia,\n(2) the case arises under provisions codified as section 77a\nto the attention of the Director of Special Consular Services,\nthrough 80b-21 of title 15, United States Code, as amended, or\nand the Secretary shall send one copy through diplomatic\nany other statute which may hereafter be administered by the\nchannels to the foreign state and shall send a certified copy of\nUnited States Securities and Exchange Commission.\nthe diplomatic note to the clerk of the court in which the\nPage 10, line 19 Strike \"sections 1605 and 1606\" and insert \"section\naction is pending. The Secretary shall maintain and publish\n1605\".\nin the Federal Register a list of foreign states upon which\nPage 11, line 3: Strike \"of process\".\nservice may be made under subparagraphs (B) and (C) of\nPage 11, lines 4 through 25; page 12, lines 1 through 25; page 13,\nthis paragraph, and such list shall be conclusive for purposes\nlines 1 through 25 page 14, lines 1 through 24; page 15, lines 1 through\nof subparagraphs (B) and (C)\n24; page 16, lines 1 through 9; strike:\n(b) service in the courts of the United States and of the States\n\"Subject to existing and future international agreements to which\nshall be made upon an agency or instrumentality of a foreign\nthe United States is a party-\nstate:\n\"(a) service in the courts of the United States and of the States\n\"(1) by delivering a copy of the summons and of the com-\nshall be made upon a foreign state or political subdivision of a\nplaint in accordance with any special arrangement for service\nforeign state:\nbetween the plaintiff and the agency or instrumentality or\n\"(1) by delivering a copy of the summons and of the com-\n\"(2) if no special arrangement exists, by delivering a copy\nplaint in accordance with any special arrangement for service\nof the summons and of the complaint to an officer, a manag-\nbetween the plaintiff and the foreign state or political subdi-\ning or general agent or to any other agent authorized by ap-\nvision; or\npointment or by law to receive service of process in the United\n(2) if no special arrangement exists, and if service is\nStates; or\nreasonably calculated to give actual notice-\n\" (3) if service cannot be made under paragraph (1) or (2)\n\"(A) by service of a copy of the summons and of the\nof this subsection, and if service is reasonably calculated to\ncomplaint, together with a translation into the official\ngive actual notice-\nlanguage of the foreign state, as directed by an authority\n\"(A) by service of a copy of the summons and of the\nof the foreign state or of the political subdivision in re-\ncomplaint, together with a translation into the official\nsponse to a letter rogatory or request, or\nlanguage of the foreign state, as directed by an authority\n4\n5\nof the foreign state or of a political subdivision in re-\n(3) if service cannot be made under paragraphs (1)\nsponse to a letter rogatory or request, or\nor (2), by sending a copy of the summons and complaint\n\"(B) by sending a copy of the summons and of the\nand a notice of suit, together with a translation of each\ncomplaint, together with a translation into the official\ninto the official language of the foreign state, by any form\nlanguage of the foreign state, by any form of mail re-\nof mail requiring a signed receipt, to be addressed and\nquiring a signed receipt, to be addressed and dispatched\ndispatched by the clerk of the court to the head of the\nby the clerk of the court to the agency or instrumentality\nministry of foreign affairs of the foreign state concerned,\nto be served, or\nor\n\"(C) as directed by order of the court consistent with\n(4) if service cannot be made within 30 days under\nthe law of the place where service is to be made;\nparagraph (3), by sending two copies of the summons\n(c) for the purposes of this section, service of process shall be\nand complaint and a notice of suit, together with a trans-\ndeemed to have been made-\nlation of each into the official language of the foreign\n\"(1) in the case of subsections (a) (1) and (b) (1), when\nstate, by any form of mail requiring a signed receipt, to\nment; delivered in accordance with the terms of the special arrange-\nbe addressed and dispatched by the clerk of the court to\nthe Secretary of State in Washington, District of Colum-\n(2) in the case of subsections (a) (2) (A) and (b) (3) (A),\nbia, to the attention of the Director of Special Consular\nwhen delivered as directed by an authority of the foreign\nServices-and the Secretary shall transmit one copy of\nstate or political subdivision;\nthe papers through diplomatic channels to the foreign\n(3) in the case of subsections (a) (2) (B) and (b) (3) (B),\nstate and shall send to the clerk of the court a certified\nwhen received abroad by mail, as evidenced by the returned,\ncopy of the diplomatic note indicating when the papers\nsigned receipt;\nwere transmitted.\n(4) in the case of subsection (b) (2), when delivered to\nAs used in this subsection, a 'notice of suit' shall mean a notice\nan officer, managing or general agent or appointed agent in\naddressed to a foreign state and in a form prescribed by the\nthe United States;\nSecretary of State by regulation.\n(5) in the case of subsection (a) (3), when sent through\n(b) Service in the courts of the United States and of the\ndiplomatic channels, as evidenced by a certified copy of the\nStates shall be made upon an agency or instrumentality of a\ndiplomatic note of transmittal;\nforeign state:\n\" (6) in the case of subsection (b) (3) (C), when served as\n(1) by delivery of a copy of the summons and com-\ndirected by order of the court;\nplaint in accordance with any special arrangement for\n'(d) in any action brought in a court of the United States or\nservice between the plaintiff and the agency or instru-\nof a State, a foreign state, a political subdivision thereof, or an\nmentality; or\nagency or instrumentality of a foreign state shall serve an answer\n(2) if no special arrangement exists, by delivery of a\nor other responsive pleading to the complaint or to a cross-claim,\ncopy of the summons and complaint either to an officer,\nor a reply to a counterclaim, within sixty days after the service of\na managing or general agent or to any other agent author-\nthe pleading in which a claim is asserted; and\nized by appointment or by law to receive service of\n(e) no judgment by default shall be entered by a court of the\nprocess in the United States; or in accordance with an\nUnited States or of a State against a foreign state, a political sub-\napplicable international convention on service of judicial\ndivision thereof, or an agency or instrumentality of a foreign\ndocuments; or\nstate, unless the claimant establishes his claim or right to relief\n(3) if service cannot be made under paragraphs (1)\nby evidence satisfactory to the court. A copy of any such default\nor (2), and if reasonably calculated to give actual notice,\njudgment shall be sent to the foreign state or political subdivi-\nby delivery of a copy of the summons and complaint,\nsion in the manner prescribed for service of process in this section.\"\ntogether with a translation of each into the official lan-\nand insert:\nguage of the foreign state-\n(a) Service in the courts of the United States and of the\n(A) as directed by an authority of the foreign\nStates shall be made upon a foreign state or political sub-\nstate or political subdivision in response to a letter\ndivision of a foreign state:\nrogatory or request, or\n(1) by delivery of a copy of the summons and com-\n(B) by any form of mail requiring a signed re-\nplaint in accordance with any special arrangement for\nceipt, to be addressed and dispatched by the clerk\nservice between the plaintiff and the foreign state or\nof the court to the agency or instrumentality to be\npolitical subdivision; or\nserved, or\n(2) if no special arrangement exists, by delivery of a\n(C) as directed by order of the court consistent\ncopy of the summons and complaint in accordance with\nwith the law of the place where service is to be\nan applicable international convention on service of judi-\nmade.\ncial documents; or\n6\n7\n(c) Service shall be deemed to have been made-\nforeign state trading company, and disputes may arise concerning the\n(1) in the case of service under subsection (a) (4), as\npurchase price. Another is when an American property owner agrees\nof the date of transmittal indicated in the certified copy\nto sell land to a real estate investor that turns out to be a foreign gov-\nof the diplomatic note; and\nernment entity and conditions in the contract of sale may become a sub-\n(2) in any other case under this section, as of the date\nject of contention. Still another example occurs when a citizen crossing\nof receipt indicated in the certification, signed and re-\nthe street may be struck by an automobile owned by a foreign embassy.\nturned postal receipt, or other proof of service applicable\nAt present, there are no comprehensive provisions in our law avail-\nto the method of service employed.\nable to inform parties when they can have recourse to the courts to\n(d) In any action brought in a court of the United States\nassert a legal claim against a foreign state. Unlike other legal systems,\nor of a State, a foreign state, a political subdivision thereof,\nU.S. law does not afford plaintiffs and their counsel with a means to\nor an agency or instrumentality of a foreign state shall serve\ncommence a suit that is specifically addressed to foreign state defend-\nan answer or other responsive pleading to the complaint\nants. It does not provide firm standards as to when a foreign state may\nwithin sixty days after service has been made under this\nvalidly assert the defense of sovereign immunity; and, in the event a\nsection.\nplaintiff should obtain a final judgment against a foreign state or one\n(e) No judgment by default shall be entered by a court of\nof its trading companies, our law does not provide the plaintiff with\nthe United States or of a State against a foreign state, a\nany means to obtain satisfaction of that judgment through execution\npolitical subdivision thereof, or an agency or instrumentality\nagainst ordinary commercial assets.\nof a foreign state, unless the claimant establishes his claim or\nIn a modern world where foreign state enterprises are every day\nright to relief by evidence satisfactory to the court. A copy\nparticipants in commercial activities, H.R. 11315 is urgently needed\nof any such default judgment shall be sent to the foreign\nlegislation. The bill, which has been drafted over many years and\nstate or political subdivision in the manner prescribed for\nwhich has involved extensive consultations within the administra-\nservice in this section.\ntion, among bar associations and in the academic community, would\nPage 16, line 12: Strike \"and future\".\naccomplish four objectives:\nPage 16, line 13: After \"party\" insert \"at the time of enact-\nFirst, the bill would codify the so-called \"restrictive\" principle of\nment of this Act\".\nsovereign immunity, as presently recognized in international law.\nPage 16, line 15: Strike \"and from\" and insert \"arrest and\".\nUnder this principle, the immunity of a foreign state is \"restricted\" to\nPage 20, line 1: Strike \"impending\" and insert \"impeding\".\nsuits involving a foreign state's public acts (jure imperii) and does\nnot extend to suits based on its commercial or private acts (jure ges-\nPURPOSE\ntionis). This principle was adopted by the Department of State in\n1952 and has been followed by the courts and by the executive branch\nThe purpose of the proposed legislation, as amended, is to provide\never since. Moreover, it is regularly applied against the United States\nwhen and how parties can maintain a lawsuit against a foreign state\nin suits against the U.S. Government in foreign courts.\nor its entities in the courts of the United States and to provide when\nSecond, the bill would insure that this restrictive principle of im-\na foreign state is entitled to sovereign immunity.\nmunity is applied in litigation before U.S. courts. At present, this is\nnot always the case. Today, when a foreign state wishes to assert im-\nSTATEMENT\nmunity, it will often request the Department of State to make a for-\nmal suggestion of immunity to the court. Although the State Depart-\nThe bill H.R. 11315 was introduced in accordance with the recom-\nment espouses the restrictive principle of immunity, the foreign state\nmendations of an executive communication transmitted to the Con-\nmay attempt to bring diplomatic influences to bear upon the State De-\ngress by the Departments of State and Justice, and both Departments\npartment's determination. A principal purpose of this bill is to trans-\nrecommend its enactment with the amendments recommended in this\nfer the determination of sovereign immunity from the executive\nreport. The bill was the subject of hearings on June 2, 1976 and June\nbranch to the judicial branch, thereby reducing the foreign policy im-\n4, 1976 before this Committee's Subcommittee on Administrative Law\nplications of immunity determinations and assuring litigants that\nand Governmental Relations. The amendments recommended to the\nthese often crucial decisions are made on purely legal grounds and\nbill are the result of matters discussed at those hearings and further\nunder procedures that insure due process. The Department of State\ndeveloped in consultation with representatives of the Departments of\nwould be freed from pressures from foreign governments to recog-\nState and Justice.\nnize their immunity from suit and from any adverse consequences\nAt the hearings on the bill it was pointed out that American citizens\nresulting from an unwillingness of the Department to support that\nare increasingly coming into contact with foreign states and entities\nimmunity. As was brought out in the hearings on the bill, U.S. im-\nowned by foreign states. These interactions arise in a variety of cir-\nmunity practice would conform to the practice in virtually every\ncumstances, and they call into question whether our citizens will have\nother country-where sovereign immunity decisions are made exclu-\naccess to the courts in order to resolve ordinary legal disputes. In-\nsively by the courts and not by a foreign affairs agency.\nstances of such contact occur when U.S. businessmen sell goods to a\n8\n9\nThird, this bill would for the first time in U.S. law, provide a stat-\nFrom the standpoint of the private litigant, considerable uncer-\nutory procedure for making service upon, and obtaining in personam\ntainty results. A private party who deals with a foreign government\njurisdiction over, a foreign state. This would render unnecessary the\nentity cannot be certain that his legal dispute with a foreign state\npractice of seizing and attaching the property of a foreign govern-\nwill not be decided on the basis of nonlegal considerations through the\nment for the purpose of obtaining jurisdiction.\nforeign government's intercession with the Department of State.\nFourth, the bill would remedy, in part, the present predicament of\na plaintiff who has obtained a judgment against a foreign state. Under\nTHE UNITED STATES IN FOREIGN COURTS\nexisting law, a foreign state in our courts enjoys absolute immunity\nfrom execution, even in ordinary commercial litigation where com-\nSince World War II, the United States has increasingly become\nmercial assets are available for the satisfaction of a judgment. H.R.\ninvolved in litigation in foreign courts. This litigation has involved\n11315 seeks to restrict this broad immunity from execution. It would\nsuch diverse activities as the purchase of goods and services by our\nconform the execution immunity rules more closely to the jurisdic-\nembassies, employment of local personnel by our military bases, the\ntion immunity rules. It would provide the judgment creditor some\nconstruction or lease of buildings for our foreign missions, and traffic\nremedy if, after a reasonable period, a foreign state or its enterprise\naccidents involving U.S. Government-owned vehicles.\nfailed to satisfy a final judgment.\nIn the mid-1950's, when the United States first became involved\nin foreign suits on a large scale, foreign counsel retained by the De-\nBACKGROUND\npartment of Justice were instructed to plead sovereign immunity in\nalmost every instance. However, the executive branch learned that\nSovereign immunity is a doctrine of international law under which\nalmost every country in Western Europe followed the restrictive\ndomestic courts, in appropriate cases, relinquish jurisdiction over a\nprinciple of sovereign immunity and the Government's pleas of im-\nforeign state. It differs from diplomatic immunity (which is drawn\nmunity were routinely denied in tort and contract cases where the\ninto issue when an individual diplomat is sued). H.R. 11315 deals\nnecessary contacts with the forum were present. Thus, in the 1960's,\nsolely with sovereign immunity.\nit became the practice of the Department of Justice to avoid claiming\nSovereign immunity as a doctrine of international law was first\nimmunity when the United States was sued in countries that had\nrecognized in our courts in the landmark case of The Schooner Ex-\nadopted the restrictive principle of immunity, but to invoke immunity\nchange V. M'Faddon, 7 Cranch 116 (1812). There, Chief Justice Mar-\nin those remaining countries that still held to the absolute immunity\nshall upheld a plea of immunity, supported by an executive branch\ndoctrine. Beginning in the early 1970's, it became the consistent prac-\nsuggestion, by noting that a recognition of immunity was supported\ntice of the Department of Justice not to plead sovereign immunity\nby the law and practice of nations. In the early part of this century,\nabroad in instances where, under the Tate letter standards, the De-\nthe Supreme Court began to place less emphasis on whether immunity\npartment would not recognize a foreign state's immunity in this\nwas supported by the law and practice of nations, and relied instead\ncountry.\non the practices and policies of the State Department. This trend\nIn virtually every country, the United States has found that sov-\nreached its culmination in Ex Parte Peru, 318 U.S. 578 (1943) and\nereign immunity is a question of international law to be determined\nMexico V. Hoffman, 324 U.S. 30 (1945).\nby the courts. The United States cannot take recourse to a foreign\nPartly in response to these decisions and partly in response to de-\naffairs agency abroad as other states have done in this country when\nvelopments in international law, the Department of State adopted the\nthey seek a suggestion of immunity from the Department of State.\nrestrictive principle of sovereign immunity in its \"Tate Letter\" of\n1952, 26 Department of State Bulletin 984. Thus, under the Tate\nHISTORY OF THE BILL\nletter, the Department undertook, in future sovereign immunity de-\nterminations, to recognize immunity in cases based on a foreign state's\nH.R. 11315 is the product of many years of work by the Depart-\npublic acts, but not in cases based on commercial or private acts. The\nments of State and Justice, in consultation with members of the bar\nTate letter, however, has posed a number of difficulties. From a legal\nand the academic community. Study of possible legislation began in\nstandpoint, if the Department applies the restrictive principle in a\nthe mid-1960's. In the early 1970's, a number of draft bills were pre-\ngiven case, it is in the awkward position of a political institution\npared and submitted for comment to many authorities and practi-\ntrying to apply a legal standard to litigation already before the courts.\ntioners in the international law field. On January 31, 1973, a bill\nMoreover, it does not have the machinery to take evidence, to hear\n(H.R. 3493) was introduced in the 93d Congress, and referred to the\nwitnesses, or to afford appellate review.\nCommittee on the Judiciary. The bill H.R. 3493 was the subject\nFrom a foreign relations standpoint, the initiative is left to the\nof a subcommittee hearing on June 7, 1973. Although extensive advice\nforeign state. The foreign state chooses which sovereign immunity de-\nhad already been obtained from the private sector, in the course of\nterminations it will leave to the courts, and which it will take to the\nthe subcommittee's consideration it became apparent that a few seg-\nState Department. The foreign state also decides when it will attempt\nments of the private bar had not been fully consulted. It was pointed\nto exert diplomatic influences, thereby making it more difficult for the\nout that the 93d Congress bill contained some technical deficiencies\nState Department to apply the Tate letter criteria.\nwhich could be remedied-particularly with respect to maritime cases\nand the jurisdictional provisions. The American Bar Association at\nH. Rept. 94-1487 2\n11\n10\nthe August 1976 meeting of its House of Delegates adopted a resolu-\n4. Section 1608 has been substantially revised, with the principal\ntion urging approval of H.R. 11315. The letter of that association\nrevisions being in subsection (a). A number of bar association studies\nindicating its support is set out at the end of this report.\nwhich otherwise expressed full support for the bill, pointed out that\nThe current bill, H.R. 11315, contains revised language. It is essen-\nsubsection (a), as previously drafted, created a significant gap in its\ntially the same bill as was introduced in 1973, except for the technical\nprovisions concerning service upon a foreign state through diplomatic\nimprovements that have been made in the interim.\nchannels. The Departments of Justice and State have reconsidered\nthis provision and have indicated their preference for the revised\nCOMMITTEE AMENDMENTS\nlanguage in the committee amendment. The committee has revised\nsubsection (a) to fill the prior gap, and, at the same time, to minimize\nThe committee, after careful consideration of the bill, made the\npotential irritants to relations with foreign states. Subsection (a),\nfollowing amendments:\nas revised, would provide that service of a summons and complaint\n1. In sections 1604 and 1609 of the bill, the committee has preserved\nalso be accompanied by a new document, called a notice of suit. The\nthe reference to \"existing international agreements\" but has deleted\nnotice of suit is designed to provide a foreign state with an introduc-\nthe language that would make this bill subject to \"future\" agreements.\ntory explanation of the lawsuit, together with an explanation of the\nMention of future agreements was found to be unnecessary and mis-\nlegal significance of the summons, complaint, and service.\nleading. The purpose for including the reference was to take into\nThe revised paragraphs (a) (2) and (b) (2) of section 1608 give\naccount the possibility that sovereign immunity might become the\nemphasis to service under an \"applicable international convention on\nsubject of an international convention. Such a convention would,\nservice of judicial documents.\" At present, there is such an applicable\nunder article VI of the Constitution, take precedence, whether or not\ninternational convention-the Hague Convention on Service Abroad\nthe bill was made expressly subject to a future international agree-\nof Judicial and Extrajudicial Documents, TIAS 6638, 20 UST 361-\nment. Moreover, it was thought best to eliminate any possible question\nto which the Senate gave its advice and consent to ratification, and\nthat this language might be construed to authorize a future interna-\nwhich entered into force for the United States in 1969. At present\ntional agreement. However, the reference to existing international\n18 nations are parties to this convention. In the committee's view, if\nagreements is essential to make it clear that this bill would not\na country has entered into such an international convention, priority\nsupersede the special procedures provided in existing international\nshould be given to this method for service.\nagreements, such as the North Atlantic Treaty-Status of Forces\nSubsection (d) has been revised to delete the references to cross-\nAgreement.\nclaims and counterclaims. The existence of a counterclaim against\n2. Section 1606, relating to public debt obligations, has been deleted\na foreign state indicates that the foreign state has already entered\nand the former section 1605 (c) has been renumbered as section 1606.\nan appearance in the lawsuit; thus, there is no necessity for affording\nThe public debt provision was, at best, very limited. It applied only\nthe foreign state with a special time period in which to respond to a\nto debt obligations incurred \"for general governmental purposes.\" It\ncounterclaim. When a cross-claim is filed against a foreign state, rules\ndid not apply to debts incurred either for specific government projects\n19 and 20, of the Federal Rules of Civil Procedure, require that\n(such as the building of a dam) or to further a commercial activity.\noriginal service be made. Under rules the bill, this would mean service\nIn practice, the provision would have had virtually no effect because\nunder section 1608 (a) or (b).\nU.S. underwriters of foreign government bonds and U.S. banks lend-\n5. Finally, your committee has made a few perfecting amendments\ning to foreign governments would invariably include an express waiver\nin the bill's provisions involving maritime jurisdiction. These include\nof immunity in the debt instrument. Moreover, both a sale of bonds to\nchanges in section 1605 (b) to make it clear that the delivery of notice\nthe public and a direct loan from a U.S. commercial bank to a foreign\nto a master of a vessel under paragraph (1) does not itself constitute\ngovernment are activities which are of a commercial nature and should\n\"service\"; and to make clear, in cases where the plaintiff is unaware\nbe treated like other similar commercial transactions. Such commer-\nthat he has arrested a foreign state-owned vessel, that the 10-day\ncial activities would not otherwise give rise to immunity and would\nperiod in paragraph (2) does not begin to run until the plaintiff has\nbe subject to U.S. regulation, such as that provided by the securities\ndetermined that a foreign state owns the vessel. Section 1609 has been\nlaws. Thus, on reconsideration of all of the factors, the committee\namended to make it clear that it applies to arrests of a vessel, as well\nhas concluded that a public debt provision would serve no significant\nas to attachment and execution.\npurpose and would be inappropriate.\n3. Former section 1605 (c), renumbered as section 1606, has also been\nCONCLUSION\nrevised in two other respects. First, it makes clear that the exception\nfor punitive damages applies to political subdivisions of foreign states,\nOn the basis of the facts outlined in the executive communication\nas well as to the foreign state itself. This accords with current inter-\nand the testimony at the hearings on the bill, the committee finds that\nnational practice. Second, it would eliminate the exception for interest\nthere is a clearly defined need for the enactment of these provisions\nprior to judgment. Such an exception is not supported by international\ninto law. It is recommended that the amended bill be approved.\npractice. If a foreign state is not immune from suit, it should be liable\nfor interest to the same extent as a private party.\n12\n13\nSECTION-BY-SECTION ANALYSIS\nprovides a comprehensive jurisdictional scheme in cases involving\nThis bill, entitled the \"Foreign Sovereign Immunities Act of 1976,\"\nforeign states. Such broad jurisdiction in the Federal courts should\nsets forth the sole and exclusive standards to be used in resolving ques-\nbe conducive to uniformity in decision, which is desirable since a dis-\ntions of sovereign immunity raised by foreign states before Federal and\nparate treatment of cases involving foreign governments may have\nState courts in the United States. It is intended to preempt any other\nadverse foreign relations consequences. Plaintiffs, however, will have\nState or Federal law (excluding applicable international agreements)\nan election whether to proceed in Federal court or in a court of a\nfor according immunity to foreign sovereigns, their political subdi-\nState, subject to the removal provisions of section 6 of the bill.\nvisions, their agencies, and their instrumentalities. It is also designed\n(a) Subject Matter Jurisdiction.-Section 1330(a) gives Federal\nto bring U.S. practice into conformity with that of most other nations\ndistrict courts original jurisdiction in personam against foreign states\nby leaving sovereign immunity decisions exclusively to the courts,\n(defined as including political subdivisions, agencies, and instrumen-\nthereby discontinuing the practice of judicial deference to \"suggestions\ntalities of foreign states). The jurisdiction extends to any claim with\nof immunity\" from the executive branch. (See Ex Parte Peru, 318\nrespect to which the foreign state is not entitled to immunity under\nU.S. 578, 588-589 (1943).)\nsections 1605-1607 proposed in the bill, or under any applicable inter-\nThe bill is not intended to affect the substantive law of liability.\nnational agreement of the type contemplated by the proposed section\nNor is it intended to affect either diplomatic or consular immunity, or\n1604.\nthe attribution of responsibility between or among entities of a for-\nAs in suits against the U.S. Government, jury trials are excluded.\neign state; for example, whether the proper entity of a foreign state\nSee 28 U.S.C. 2402, Actions tried by a court without jury will tend to\nhas been sued, or whether an entity sued is liable in whole or in part\npromote a uniformity in decision where foreign governments are\ninvolved.\nfor the claimed wrong.\nAside from setting forth comprehensive rules governing sovereign\nIn addition, the jurisdiction of district courts in cases against for-\nimmunity, the bill prescribes: the jurisdiction of U.S. district courts\neign states is to be without regard to amount in controversy. This is\nin cases involving foreign states, procedures for commencing a law-\nintended to encourage the bringing of actions against foreign states in\nsuit against foreign states in both Federal and State courts, and cir-\nFederal courts. Under existing law, the district courts have diversity\ncumstances under which attachment and execution may be obtained\njurisdiction in actions in which foreign states are parties, but only\nagainst the property of foreign states to satisfy a judgment against\nwhere the amount in controversy exceeds $10,000. 28 U.S.C. (2)\nand (3). (See analysis of sec. 3 of the bill, below.)\nforeign states in both Federal and State courts.\nConstitutional authority for enacting such legislation derives from\nA judgment dismissing an action for lack of jurisdiction because\nthe constitutional power of the Congress to prescribe the jurisdiction\nthe foreign state is entitled to sovereign immunity would be determina-\nof Federal courts (art. I, sec. 8, cl. 9; art. III, sec. 1) ; to define offenses\ntive of the question of sovereign immunity. Thus, a private party,\nwho lost on the question of jurisdiction, could not bring the same\nagainst the \"Law of Nations\" (art. I, sec. 8, cl. 10) ; to regulate com-\nmerce with foreign nations (art. I, sec. 8, cl. 3) ; and \"to make all\ncase in a State court claiming that the Federal court's decision ex-\nLaws which shall be necessary and proper for carrying into Execu-\ntended only to the question of Federal jurisdiction and not to sover-\ntion * * all * * F wers vested * * * in the Government of the\neign immunity.\nUnited States,\" including the judicial power of the United States\n(b) Personal Jurisdiction.-Section 1330(b) provides, in effect, a\nover controversies between \"a State, or the Citizens thereof, and for-\nFederal long-arm statute over foreign states (including political sub-\ndivisions, agencies, and instrumentalities of foreign states). It is pat-\neign States * * *.\" (art. I, sec. 8, cl. 18; art. III, sec. 2, cl. 1). See\nterned after the long-arm statute Congress enacted for the District of\nNational Bank V. Republic of China, 348 U.S. 356, 370-71 (1955)\nColumbia. Public Law 91-358, sec. 132 (a), title I, 84 Stat. 549. The re-\n(Reed J., dissenting) ; of. Banco Nacional de Cuba V. Sabbatino, 376\nquirements of minimum jurisdictional contacts and adequate notice are\nU.S. 398, 425 (1964).\nThe committee wishes to emphasize that this section-by-section\nembodied in the provision. Cf. International Shoe Co. V. Washington,\n326 U.S. 310 (1945), and McGee V. International Life Insurance Co.,\nanalysis supersedes the section-by-section analysis that accompanied\n355 U.S. 220, 223 (1957). For personal jurisdiction to exist under sec-\nthe earlier version of the bill in the 93rd Congress (that is, S. 566 and\ntion 1330 (b), the claim must first of all be one over which the district\nH.R. 3493, 93d Cong., 1st sess.) ; the prior analysis should not be con-\ncourts have original jurisdiction under section 1330(a), meaning a\nsulted in interpreting the current bill and its provisions, and no in-\nclaim for which the foreign state is not entitled to immunity. Signifi-\nferences should be drawn from differences between the two.\ncantly, each of the immunity provisions in the bill, sections 1605-1607,\nrequires some connection between the lawsuit and the United States,\nSEC. 2. JURISDICTION IN ACTIONS AGAINST FOREIGN STATES\nor an express or implied waiver by the foreign state of its immunity\nSection 2 of the bill adds a new section 1330 to title 28 of the\nfrom jurisdiction. These immunity provisions, therefore, prescribe\nUnited States Code, and provides for subject matter and personal\nthe necessary contacts which must exist before our courts can exercise\njurisdiction of U.S. district courts over foreign states and their\npersonal jurisdiction. Besides incorporating these jurisdictional con-\npolitical subdivisions, agencies, and instrumentalities. Section 1330\ntacts by reference, section 1330(b) also satisfies the due process re-\nquirement of adequate notice by prescribing that proper service be\n14\n15\nmade under section 1608 of the bill. Thus, sections 1330 (b), 1608, and\nSection 1603. Definitions\n1605-1607 are all carefully interconnected.\nSection 1603 defines five terms that are used in the bill:\n(c) Effect of an Appearance.Section 1330(c) states that a mere\n(a) Foreign state.Subsection (a) defines the term foreign state as\napperance by a foreign state in an action does not confer personal\nused in all provisions of chapter 97, except section 1608. In section\njurisdiction with respect to claims which could not be brought as an\n1608, the term \"foreign state\" refers only to the sovereign state itself.\nindependent action under this bill. The purpose is to make it clear\nAs the definition indicates, the term \"foreign state\" as used in every\nthat a foreign state does not subject itself to claims unrelated to the\nother section of chapter 97 includes not only the foreign state but also\naction solely by virtue of an appearance before a U.S. court. While\npolitical subdivisions, agencies and instrumentalities of the foreign\nthe plaintiff is free to amend his complaint, he is not permitted to add\nstate. The term \"political subdivisions\" includes all governmental\nclaims for relief not based on transactions or occurrences listed in the\nunits beneath the central government, including local governments.\nbill. The term \"transaction or occurrence\" includes each basis set forth\n(b) Agency or instrumentality of a foreign state.Subsection (b)\nin sections 1605-1607 for not granting immunity, including waivers.\ndefines an \"agency or instrumentality of a foreign state\" as any entity\n(1) which is a separate legal person, (2) which is an organ of a for-\nSEC. 3. DIVERSITY JURISDICTION AS TO FOREIGN STATES\neign state or of a political subdivision of a foreign state, or a majority\nSection 3 of the bill amends those provisions of 28 U.S.C. 1332 which\nof whose shares or other ownership interest is owned by a foreign\nstate or by a foreign state's political subdivision, and (3) which is nei-\nrelate to diversity jurisdiction of U.S. district courts over foreign\nther a citizen of a State of the United States as defined in 28 U.S.C.\nstates. Since jurisdiction in actions against foreign states is compre-\n1332 and (d) nor created under the laws of any third country.\nhensively treated by the new section 1330, a similar jurisdictional\nThe first criterion, that the entity be a separate legal person, is in-\nbasis under section 1332 becomes superfluous. The amendment deletes\ntended to include a corporation, association, foundation, or any other\nreferences to \"foreign states\" now found in paragraphs (2) and (3)\nentity which, under the law of the foreign state where it was created,\nof 28 U.S.C. 1332 (a), and adds a new paragraph (4) to provide for\ncan sue or be sued in its own name, contract in its own name or hold\ndiversity jurisdiction in actions brought by a foreign state as plaintiff.\nproperty in its own name.\nThese changes would not affect the applicability of section 1332 to\nThe second criterion requires that the entity be either an organ of a\nentities that are both owned by a foreign state and are also citizens\nforeign state (or of a foreign state's political subdivision), or that a\nof a state of the United States as defined in 28 U.S.C. 1332 (c) and\nmajority of the entity's shares or other ownership interest be owned\n(d). See analysis to section (b).\nby a foreign state (or by a foreign state's political subdivision). If such\nentities are entirely owned by a foreign state, they would of course be\nSEC. 4. NEW CHAPTER 97 : SOVEREIGN IMMUNITY PROVISIONS\nincluded within the definition. Where ownership is divided between a\nSection 4 of the bill adds a new chapter 97 to title 28, United States\nforeign state and private interests, the entity will be deemed to be an\nCode, which sets forth the legal standards under which Federal and\nagency or instrumentality of a foreign state only if a majority of the\nState courts would henceforth determine all claims of sovereign im-\nownership interests (shares of stock or otherwise) is owned by a for-\nmunity raised by foreign states and their political subdivisions, agen-\neign state or by a foreign state's political subdivision.\nThe third criterion excludes entities which are citizens of a State\ncies, and instrumentalities. The specific sections of chapter 97 are as\nfollows:\nof the United States as defined in 28 U.S.C. 1332 (c) and ex-\nample a corporation organized and incorporated under the laws of the\nSection 1602. Findings and declaration of purpose\nState of New York but owned by a foreign state. (See Amtorg Trad-\nSection 1602 sets forth the central premise of the bill: That deci-\ning Corp. V. United States, 71 F. 2d 524 (C.C.P.A. 1934).) Also ex-\nsions on claims by foreign states to sovereign immunity are best made\ncluded are entities which are created under the laws of third countries.\nby the judiciary on the basis of a statutory regime which incorporates\nThe rationale behind these exclusions is that if a foreign state acquires\nstandards recognized under international law.\nor establishes a company or other legal entity in a foreign country,\nAlthough the general concept of sovereign immunity appears to be\nsuch entity is presumptively engaging in activities that are either com-\nrecognized in international law, its specific content and application\nmercial or private in nature.\nhave generally been left to the courts of individual nations. There is,\nAn entity which does not fall within the definitions of sections 1603\nhowever, a wide acceptance of the so-called restrictive theory of SOV-\n(a) or (b) would not be entitled to sovereign immunity in any case\nereign immunity; that is, that the sovereign immunity of foreign\nbefore a Federal or State court. On the other hand, the fact that an\nstates should be \"restricted\" to cases involving acts of a foreign state\nentity is an \"agency or instrumentality of a foreign state\" does not in\nwhich are sovereign or governmental in nature, as opposed to acts\nitself establish an entitlement to sovereign immunity. A court would\nwhich are either commercial in nature or those which private persons\nhave to consider whether one of the sovereign immunity exceptions\nnormally perform. This restrictive theory has been adhered to by the\ncontained in the bill (see sections 1605-1607 and 1610-1611) was\nDepartment of State since the \"Tate Letter\" of May 19, 1952. (26\napplicable.\nDept. of State Bull. 984 (1952).)\nAs a general matter, entities which meet the definition of an \"agency\nor instrumentality of a foreign state\" could assume a variety of forms,\n16\n17\nincluding a state trading corporation, a mining enterprise, a transport\norganization such as a shipping line or airline, a steel company, a cen-\n(e) Commercial activity carried on in the United States by a foreign\ntral bank, an export association, a governmental procurement agency\nstate.-As paragraph (d) of section 1603 indicates, a commercial activ-\nor a department or ministry which acts and is suable in its own name.\nity carried on in the United States by a foreign state would include not\n(c) United States.-Paragraph (c) of section 1603 defines \"United\nonly a commercial transaction performed and executed in its entirety\nStates\" as including all territory and waters subject to the jurisdiction\nin the United States, but also a commercial transaction or act having\nof the United States.\na \"substantial contact\" with the United States. This definition includes\n(d) Commercial activity.-Paragraph (c) of section 1603 defines the\ncases based on commercial transactions performed in whole or in part\nterm \"commercial activity\" as including a broad spectrum of endeavor,\nin the United States, import-export transactions involving sales to, or\nfrom an individual commercial transaction or act to a regular course\npurchases from, concerns in the United States, business torts occurring\nof commercial conduct. A \"regular course of commercial conduct\" in-\nin the United States (cf. § 1605 (5)), and an indebtedness incurred\ncludes the carrying on of a commercial enterprise such as a mineral\nby a foreign state which negotiates or executes a loan agreement in the\nextraction company, an airline or a state trading corporation. Cer-\nUnited States, or which receives financing from a private or public\ntainly, if an activity is customarily carried on for profit, its commer-\nlending institution located in the United States-for example, loans,\ncial nature could readily be assumed. At the other end of the spectrum,\nguarantees or insurance provided by the Export-Import Bank of the\na single contract, if of the same character as a contract which might be\nUnited States. It will be for the courts to determine whether a particu-\nmade by a private person, could constitute a \"particular transaction or\nlar commercial activity has been performed in whole or in part in the\nact.\"\nUnited States. This definition, however, is intended to reflect a degree\nAs the definition indicates, the fact that goods or services to be\nof contact beyond that occasioned simply by U.S. citizenship or U.S.\nresidence of the plaintiff.\nprocured through a contract are to be used for a public purpose is\nirrelevant; it is the essentially commercial nature of an activity or\nSection 1604. Immunity of foreign states from jurisdiction\ntransaction that is critical. Thus, a contract by a foreign government\nNew chapter 97 of title 28, United States Code, starts from a premise\nto buy provisions or equipment for its armed forces or to construct\nof immunity and then creates exceptions to the general principle. The\na government building constitutes a commercial activity. The same\nchapter is thus cast in a manner consistent with the way in which the\nwould be true of a contract to make repairs on an embassy building.\nlaw of sovereign immunity has developed. Stating the basic principle\nSuch contracts should be considered to be commercial contracts, even\nin terms of immunity may be of some advantage to foreign states in\nif their ultimate object is to further a public function.\ndoubtful cases, but, since sovereign immunity is an affirmative defense\nBy contrast, a foreign state's mere participation in a foreign assist-\nwhich must be specially pleaded, the burden will remain on the foreign\nance program administered by the Agency for International Develop-\nstate to produce evidence in support of its claim of immunity. Thus,\nment (AID) is an activity whose essential nature is public or govern-\nevidence must be produced to establish that a foreign state or one of its\nmental, and it would not itself constitute a commercial activity. By the\nsubdivisions, agencies or instrumentalities is the defendant in the suit\nsame token, a foreign state's activities in and \"contacts\" with the\nand that the plaintiff's claim relates to a public act of the foreign\nUnited States resulting from or necessitated by participation in such\nstate-that is, an act not within the exceptions in sections 1605-1607.\na program would not in themselves constitute a sufficient commercial\nOnce the foreign state has produced such prima facie evidence of im-\nnexus with the United States SO as to give rise to jurisdiction (see\nmunity, the burden of going forward would shift to the plaintiff to\nsec. 1330) or to assets which could be subjected to attachment or\nproduce evidence establishing that the foreign state is not entitled to\nexecution with respect to unrelated commercial transactions (see sec.\nimmunity. The ultimate burden of proving immunity would rest with\n1610(b)). However, a transaction to obtain goods or services from\nthe foreign state.\nprivate parties would not lose its otherwise commercial character be-\nThe immunity from jurisdiction provided in section 1604 appliès to\ncause it was entered into in connection with an AID program. Also\nproceedings in both Federal and State courts. Section 1604 would be\npublic or governmental and not commercial in nature, would be the\nthe only basis under which a foreign state could claim immunity from\nemployment of diplomatic, civil service, or military personnel, but\nthe jurisdiction of any Federal or State court in the United States.\nnot the employment of American citizens or third country nationals by\nAll immunity provisions in sections 1604 through 1607 are made\nthe foreign state in the United States.\nsubject to \"existing\" treaties and other international agreements to\nThe courts would have a great deal of latitude in determining what\nwhich the United States is a party. In the event an international agree-\nis a \"commercial activity\" for purposes of this bill. It has seemed un-\nment expressly conflicts with this bill, the international agreement\nwise to attempt an excessively precise definition of this term, even if\nwould control. Thus, the bill would not alter the rights or duties of the\nthat were practicable. Activities such as a foreign government's sale of\nUnited States under the NATO Status of Forces Agreement or similar\na service or a product, its leasing of property, its borrowing of money,\nagreements with other countries; nor would it alter the provisions of\nits employment or engagement of laborers, clerical staff or public re-\ncommercial contracts or agreements to which the United States is a\nlations or marketing agents, or its investment in a security of an\nparty, calling for exclusive nonjudicial remedies through arbitration\nAmerican corporation, would be among those included within the\nor other procedures for the settlement of disputes.\ndefinition.\nTreaties of friendship, commerce and navigation and bilateral air\ntransport agreements often contain provisions relating to the immunity\nH. Rept. 94-1487 3\n18\n19\nof foreign states. Many provisions in such agreements are consistent\neign state.\" This phrase is defined in section 1603 of the bill. See\nwith, but do not go as far as, the current bill. To the extent such inter-\nthe analysis to that section.\nnational agreements are silent on a question of immunity, the bill\nThe second situation, an \"act performed in the United States in\na conflict was manifest.\nwould control; the international agreement would control only where\nconnection with a commercial activity of the foreign state elsewhere,\"\nlooks to conduct of the foreign state in the United States which relates\nSection 1605. General exceptions to the jurisdictional immunity of\neither to a regular course of commercial conduct elsewhere or to a par-\nforeign states\nticular commercial transaction concluded or carried out in part else-\nSection 1605 sets forth the general circumstances in which a claim\nwhere. Examples of this type of situation might include a representa-\nof sovereign immunity by a foreign state, as defined in section 1603 (a),\ntion in the United States by an agent of a foreign state that leads to an\naction for restitution based on unjust enrichment; an act in the United\nStates. would not be recognized in a Federal or State court in the United\nStates that violates U.S. securities laws or regulations; the wrongful\n(a) (1) Waivers.-Section 1605 (a) (1) treats explicit and implied\ndischarge in the United States of an employee of the foreign state who\nwaivers by foreign states of sovereign immunity. With respect to ex-\nhas been employed in connection with a commercial activity carried on\nplicit waivers, a foreign state may renounce its immunity by treaty,\nin some third country.\nas has been done by the United States with respect to commercial and\nAlthough some or all of these acts might also be considered to be a\nother activities in a series of treaties of friendship, commerce, and\n\"commercial activity carried on in the United States,\" as broadly\nnavigation, or a foreign state may waive its immunity in a contract\ndefined in section 1603 (e), it has seemed advisable to provide expressly\nwith a private party. Since the sovereign immunity of a political sub-\nfor the case where a claim arises out of a specific act in the United\ndivision, agency or instrumentality of a foreign state derives from the\nStates which is commercial or private in nature and which relates to a\nforeign state itself, the foreign state may waive the immunity of its\ncommercial activity abroad. It should be noted that the acts (or omis-\npolitical subdivisions, agencies or instrumentalities.\nsions) encompassed in this category are limited to those which in and\nof themselves are sufficient to form the basis of a cause of action.\nWith respect to implicit waivers, the courts have found such waivers\nin cases where a foreign state has agreed to arbitration in another\nThe third situation-\"an act outside the territory of the United\nStates in connection with a commercial activity of the foreign state\ncountry or where a foreign state has agreed that the law of a par-\nelsewhere and that act causes a direct effect in the United States\"-\nticular country should govern a contract. An implicit waiver would\nwould embrace commercial conduct abroad having direct effects within\nalso include a situation where a foreign state has filed a responsive\nthe United States which would subject such conduct to the exercise of\npleading in an action without raising the defense of sovereign\nimmunity.\njurisdiction by the United States consistent with principles set forth\nThe language, \"notwithstanding any withdrawal of the waiver\nin section 18, Restatement of the Law, Second, Foreign Relations\nwhich the foreign state may purport to effect except in accordance\nLaw of the United States (1965).\nwith the terms of the waiver,\" is designed to exclude a withdrawal of\nNeither the term \"direct effect\" nor the concept of \"substantial con-\nthe waiver both after and before a dispute arises except in accordance\ntacts\" embodied in section 1603 (e) is intended to alter the application\nwith the terms of the original waiver. In other words, if the foreign\nof the Sherman Antitrust Act, 15 U.S.C. 1, et seq., to any defendant.\nThus, the bill does not affect the holdings in such cases as United\nstate agrees to a waiver of sovereign immmunity in a contract, that\nStates V. Pacific & Arctic Ry. & Nav. Co., 228 U.S. 87 (1913), or Pacific\nwaiver may subsequently be withdrawn only in a manner consistent\nwith the expression of the waiver in the contract. Some court decisions\nSeafarers, Inc. V. Pacific Far East Line, Inc., 404 F. 2d 803 (D.C. Cir.\nhave allowed subsequent and unilateral rescissions of waivers by for-\n1968), cert. denied, 393 U.S. 1093 (1969).\neign states. But the better view, and the one followed in this section,\n(a) (3) Expropriation claims.-Section 1605 (a) (3) would, in two\nis that a foreign state which has induced a private person into a\ncategories of cases, deny immunity where \"rights in property taken in\ncontract by promising not to invoke its immunity cannot, when a\nviolation of international law are in issue.\" The first category involves\ndispute arises, go back on its promise and seek to revoke the waiver\ncases where the property in question or any property exchanged for\nunilaterally.\nsuch property is present in the United States, and where such\n(a) (2) Commercial activities having a nexus with the United\npresence is in connection with a commercial activity carried on in\nStates.-Section 1605 (a) (2) treats what is probably the most impor-\nthe United States by the foreign state, or political subdivision, agency\ntant instance in which foreign states are denied immunity, that in\nor instrumentality of the foreign state. The second category is where\nwhich the foreign state engages in a commercial activity. The defini-\nthe property, or any property exchanged for such property, is (i)\ntion of a \"commercial activity\" is set forth in section 1603 (d) of the\nowned or operated by an agency or instrumentality of a foreign state\nbill, and is discussed in the analysis to that section.\nand (ii) that agency or instrumentality is engaged in a commercial\nSection 1605 (a) (2) mentions three situations in which a foreign\nactivity in the United States. Under the second category, the property\nstate would not be entitled to immunity with respect to a claim based\nneed not be present in connection with a commercial activity of the\nupon a commercial activity. The first of these situations is where the\nagency or instrumentality.\nThe term \"taken in violation of international law\" would include the\n\"commercial activity [is] carried on in the United States by the for-\nnationalization or expropriation of property without payment of the\n20\n21\nprompt adequate and effective compensation required by international\nas applying to all tort actions for money damages, not otherwise en-\nlaw. It would also include takings which are arbitrary or discrimi-\ncompassed by section 1605 (a) (2) relating to commercial activities. It\nnatory in nature. Since, however, this section deals solely with issues\ndenies immunity as to claims for personal injury or death, or for\nof immunity, it in no way affects existing law on the extent to which,\ndamage to or loss of property, caused by the tortious act or omission\nif at all, the \"act of state\" doctrine may be applicable. See 22 U.S.C.\nof a foreign state or its officials or employees, acting within the scope\n2370 (2).1\nof their authority; the tortious act or omission must occur within the\n(a) (4) Immovable, inherited, and gift property.- Section 1605 (a)\njurisdiction of the United States, and must not come within one of the\n(4) denies immunity in litigation relating to rights in real estate and\nexceptions enumerated in the second paragraph of the subsection.\nin inherited or gift property located in the United States. It is estab-\nAs used in section 1605 (a) (5), the phrase \"tortious act or omission\"\nlished that, as set forth in the \"Tate Letter\" of 1952, sovereign immu-\nis meant to include causes of action which are based on strict liability\nnity should not be granted in actions with respect to real property,\nas well as on negligence. The exceptions provided in subparagraphs\ndiplomatic and consular property excepted. 26 Department of State\n(A) and (B) of section 1605 (a) (5) correspond to many of the claims\nBulletin 984 (1952). It does not matter whether a particular piece of\nwith respect to which the U.S. Government retains immunity under\nproperty is used for commercial or public purposes.\nthe Federal Tort Claims Act, 28 U.S.C. 2680 (a) and (h).\nIt is maintainable that the exception mentioned in the \"Tate Letter\"\nLike other provisions in the bill, section 1605 is subject to existing\nwith respect to diplomatic and consular property is limited to ques-\ninternational agreements (see section 1604), including Status of Forces\ntions of attachment and execution and does not apply to an adjudica-\nAgreements; if a remedy is available under a Status of Forces Agree-\ntion of rights in that property. Thus the Vienna Convention on\nment, the foreign state is immune from such tort claims as are encom-\nDiplomatic Relations, concluded in 1961, 23UST 3227, TIAS 7502\npassed in sections 1605 (a) (2) and 1605 (a) (5).\n(1972), provides in article 22 that the \"premises of the mission, their\nSince the bill deals only with the immunity of foreign states and\nfurnishings and other property thereon and the means of transport\nnot its diplomatic or consular representatives, section 1605 (5)\nof the mission shall be immune from search, requisition, attachment\nwould not govern suits against diplomatic or consular representatives\nor execution.\" Actions short of attachment or execution seem to be\nbut only suits against the foreign state. It is noteworthy in this regard\npermitted under the Convention, and a foreign state cannot deny to\nthat while article 43 of the Vienna Convention on Consular Relations\nthe local state the right to adjudicate questions of ownership, rent,\nof 1963, 21 UST 77, TIAS 6820 (1970), expressly abolishes the im-\nservitudes, and similar matters, as long as the foreign state's pos-\nmunity of consular officers with respect to civil actions brought by a\nsession of the premises is not disturbed.\nthird party for \"damage arising from an accident in the receiving\nThere is general agreement that a foreign state may not claim im-\nstate caused by a vehicle, vessel or aircraft,\" there is no such provision\nmunity when the suit against it relates to rights in property, real or\nin the Vienna Convention on Diplomatic Relations of 1961, supra.\npersonal, obtained by gift or inherited by the foreign state and situ-\nConsequently, no case relating to a traffic accident can be brought\nated or administered in the country where the suit is brought. As\nagainst a member of a diplomatic mission.\nstated in the \"Tate Letter,\" immunity should not be granted \"with re-\nThe purpose of section 1605 (a) (5) is to permit the victim of a\nspect to the disposition of the property of a deceased person even\ntraffic accident or other noncommercial tort to maintain an action\nthough a foreign sovereign is the beneficiary.\" The reason is that, in\nagainst the foreign state to the extent otherwise provided by law.\nclaiming rights in a decedent's estate or obtained by gift, the foreign\nSee, however, section 1605 (c).\nstate claims the same right which is enjoyed by private persons.\n(b) Maritime liens.-Section 1605 (b) denies immunity to a foreign\n(a) (5) Noncommercial torts.Section 1605(a)'(5 is directed pri-\nstate in cases where (i) a suit in admiralty is brought to enforce a\nmarily at the problem of traffic accidents but is cast in general terms\nmaritime lien against a vessel or cargo of that foreign state, (ii) the\nmaritime lien is based upon a commercial activity of the foreign\n1 The committee has been advised that in some cases, after the defense of sovereign\nimmunity has been denied or removed as an issue, the art of state doctrine may be\nstate, and (iii) the conditions in paragraphs (1) and (2) of section\nimproperly asserted in an effort to block litigation. Under the act of state doctrine.\nUnited States Courts may refuse to adjudicate the validity of purely public acts of\n1605 (b) have been-complied with.\nforeign sovereigns, as distinguished from commercial acts. committed and effective within\nThe purpose of this subsection is the permit a plaintiff to bring suit\ntheir own territory. For example, in the Supreme Court's recent decision in Dunhill V.\nRepublic of Cuba, 44 U.S.L.W. 4665. No. 73-1288 (May 24, 1976, the respondent having\nin a U.S. district court arising out of a maritime lien involving a\nbrought suit (and thus clearly having waived the defense of sovereign immunity)\nattempted to assert that a refusal to pay a commercial obligation was not reviewable\nvessel or cargo of a foreign sovereign without arresting the vessel, by\nbecause it was an \"act of state\".\ninstituting an in personam action against the foreign state in a man-\nThe committee has found it unnecessary to address the act of state doctrine in this\nlegislation since decisions such as that in the Dunhill case demonstrate that our courts\nner analogous to bringing such a suit against the United States. Cf.\nalready have considerable guidance enabling them to reject improper assertions of the\nact of state doctrine. For example, it appears that the doctrine would not apply to the\n46 U.S.C. 741, et seq. In view of section 1609 of the bill, section\ncases covered by H.R. 11315, whose touchstone is a concept of \"commercial activity\"\n1605 (b) is designed to avoid arrests of vessels or cargo of a foreign\ninvolving significant jurisdictional contacts with this country. The conclusions of the\ncommittee are in concurrence with the position of the government in its amicus brief to\nstate to commence a suit. Instead, as provided in paragraph (1), a\nthe Supreme Court in the Dunhill case where the Solicitor General stated:\n\"[U]nder the modern restrictive theory of sovereign immunity, a foreign state is not\ncopy of the summons and complaint must be delivered to the master\nimmune from suit on its commercial obligations. To elevate the foreign state's com-\nor other person having possession of the vessel or cargo (such as the\nmercial acts to the protected status of acts of state' would frustrate this modern\ndevelopment by permitting sovereign immunity to reenter through the back door, under\nsecond in command of the ship).\nthe guise of the act of state doctrine.\" (Amicus Brief of United States, p. 41.)\nIf, however, the vessel or its cargo is arrested or attached, the\nplaintiff will lose his in personam remedy and the foreign state will\n22\n23\nbe entitled to immunity-except in the case where the plaintiff was\nThe bill does not attempt to deal with questions of discovery. Exist-\nunaware that the vessel or cargo of a foreign state was involved.\ning law appears to be adequate in this area. For example, if a private\nThis would be a rare case because the flag of the vessel, the circum-\nplaintiff sought the production of sensitive governmental documents\nstances giving rise to the maritime lien, or the information contained\nin ship registries kept in ports throughout the United States should\nof a foreign state, concepts of governmental privilege would apply.2\nOr if a plaintiff sought to depose a diplomat in the United States or\nmake known the ownership of the vessel in question, if not the cargo.\na high-ranking official of a foreign government, diplomatic and official\nBy contrast, evidence that a party had relied on a standard registry\nimmunity would apply. However, appropriate remedies would be\nof ships, which did not reveal a foreign state's interest in a vessel,\nwould be prima facie evidence of the party's unawareness that a\navailable under Rule 37, F.R. Civ. P., for an unjustifiable failure to\nmake discovery.\nvessel of a foreign state was involved. More generally, a party could\nseek to establish its lack of awareness of the foreign state's owner-\nSection 1607. Counterclaims\nship by submitting affidavits from itself and from its counsel. If,\nSection 1607 applies to counterclaims against a foreign state which\nhowever, the vessel or cargo is mistakenly arrested, such arrest or\nbrings an action or intervenes in an action in a Federal or State court.\nattachment must, under section 1609, be immediately dissolved when\nIt would deny immunity in three situations. First, immunity would\nthe foreign state brings to the court's attention its interest in the\nbe denied as to any counterclaim for which the foreign state would\nvessel or cargo and, hence, its right to immunity from arrest.\nnot be entitled to immunity under section 1605, if the counterclaim\nUnder paragraph (2), the plaintiff must also be able to prove that\nhad been brought as a direct claim in a separate action against the\nthe procedures for service under section 1608 (a) or (b) have com-\nforeign state. This provision is based upon article I of the European\nmenced-for example, that the clerk of the court has mailed the\nConvention on State Immunity 11 Int'l Legal Materials 470 (1972).\nrequisite copies of the summons and complaint. The plaintiff need\nSecond, even if a foreign state would otherwise be entitled to im-\nnot show that service has actually been made under section 1608 (c).\nmunity under sections 1604-1606, it would not be immune from a\nThe reason for this second requirement is to help make certain that\ncounterclaim \"arising out of the transaction or occurrence that is the\nthe foreign state concerned receives prompt and actual notice of the\nsubject matter of the claim of the foreign state.\" This is the same\ninstitution of a suit in admiralty in the United States, even if the\nterminology as that used in rule 13(a) of the Federal Rules of Civil\ncopies served on the master of the vessel should fail to reach the\nProcedure and is consistent with section 70(2) (b), Restatement of the\nforeign state.\nLaw, Second, Foreign Relations Law of the United States (1965).\nSection 1605 (b) would not preclude a suit in accordance with other\nCertainly, if a foreign state brings or intervenes in an action based on\nprovisions of the bill-e.g., section 1605 (a) (2). Nor would it preclude\na particular transaction or occurrence, it should not obtain the bene-\na second action, otherwise permissible, to recover the amount by\nfits of litigation before U.S. courts while avoiding any legal liabilities\nwhich the value of the maritime lien exceeds the recovery in the first\nclaimed against it and arising from that same transaction or oc-\naction.\ncurrence. See, Alfred Dunhill of London, Inc., V. Cuba,\nU.S.\nSection 1606. Extent of liability\nNo. 73-1288, decided May 24, 1976).\nSection 1606 makes clear that if the foreign state, political sub-\nThird, notwithstanding that the foreign state may be immune\ndivision, agency or instrumentality is not entitled to immunity from\nunder subsections (a) and (b), the foreign state nevertheless would\njurisdiction, liability exists as it would for a private party under\nnot be immune from a setoff. Subsection (c) codifies the rule enunciated\nlike circumstances. However, the tort liability of a foreign state itself,\nin National Bank V. Republic of China, 348 U.S. 356 (1955).\nand of its political subdivision (but not of an agency or instrumen-\nSection 1608. Service; time to answer; default\ntality of a foreign state) does not extend to punitive damages. Under\nSection 1608 sets forth the exclusive procedures with respect to\ncurrent international practice, punitive damages are usually not\nservice on, the filing of an answer or other responsive pleading by,\nassessed against foreign states. See 5 Hackwork, Digest of Inter-\nand obtaining a default judgment against a foreign state or its po-\nnational Law, 723-26 (1943) ; Garcia-Amador, State Reesponsibility,\nlitical subdivisions, agencies or instrumentalities. These procedural\n94 Hague Recueil des Cours 365, 476-81 (1958). Interest prior to\nprovisions are intended to fill a void in existing Federal and State\njudgment and costs may be assessed against a foreign state just as\nlaw, and to insure that private persons have adequate means for com-\nagainst a private party Cf. 46 U.S.C. 743, 745.\nmencing a suit against a foreign state to seek redress in the courts.\nConsistent with this section, a court could, when circumstances\nProvisions in section 1608 are closely interconnected with other parts\nwere clearly appropriate, order an injunction or specific performance.\nof the bill-particularly the proposed section 1330 and sections 1605-\nBut this is not determinative of the power of the court to enforce\n1607. If notice is served under section 1608 and if the jurisdictional\nsuch an order. For example, a foreign diplomat or official could not\ncontacts embodied in sections 1605-1607 are satisfied, personal jur-\nbe imprisoned for contempt because of his government's violation of\nisdiction over a foreign state would exist under section 1330(b). In\nan injunction. See 22 U.S.C. 252. Also a fine for violation of an\naddition to its integral role in the bill, section 1608 follows on the\ninjunction may be unenforceable if immunity exists under sections\n1609-1610.\n2 e.g. 5 U.S.C. 552 concerning public information.\n24\n25\nprecedents of other statutory service provisions in areas of unusual\nsteps are available under or required by U.S. law in order to defend\nFederal interest. See, for example, 8 U.S.C. 1105a (3) and 15 U.S.C.\nthe action. In short, it would provide an introductory explanation to\n21 (f) and 77v.\na foreign state that may be unfamiliar with U.S. law or procedures.\n(a) Service on Foreign States and Political Subdivisions.-Subsec-\nService through diplomatic channels is widely used in international\ntion (a) of section 1608 sets forth the exclusive procedures for service\npractice. It is provided for in the European Convention on State Im-\non a foreign state, or political subdivision thereof, but not on an agency\nmunity, supra, which was negotiated by 18 European nations. It is\nor instrumentality of a foreign state which is covered in subsection\naccepted and indeed preferred by the United States in suits brought\n(b). There is a hierarchy in the methods of service. Paragraph (1)\nagainst the United States Government in foreign courts. See Depart-\nprovides for service in accordance with any special arrangement which\nment of State's circular instruction No. CA-10922, June 16, 1961, 56\nmay have been agreed upon between a plaintiff and the foreign state\nAm. J. Int'l L. 523-33 (1962).\nor political subdivision. If such an arrangement exists, service must\n(b) Service on Agencies or Instrumentalities.-Subsection (b) of\nbe made under this method. The purpose of subsection (a) (1) is to\nsection 1608 provides the methods under which service shall be made\nencourage potential plaintiffs and foreign states to agree to a proce-\nupon an agency or instrumentality of a foreign state, as defined in\ndure on service.\nsection (b). Again, service must always be made in accordance\nIf no special arrangement exists, paragraph (2) would permit serv-\nwith any special arrangement for service between a plaintiff and the\nice in accordance with an applicable international convention on serv-\nagency or instrumentality. If no such arrangement exists, then serv-\nice of judicial documents. The only such convention to which the\nice must be made under subsection (b) (2) which provides for service\nUnited States is at present a party is the Hague Convention on Serv-\nupon officers, or managing, general or appointed agents in the United\nice Abroad of Judicial and Extrajudicial Documents, 20 UST 361,\nStates of the agency or instrumentality-or in the alternative, in ac-\nTIAS 6638 (1969). In order for an international convention to be\ncordance with an applicable international convention such as the Hague\n\"applicable\", both the United States and the foreign state concerned\nConvention on Service Abroad of Judicial and Extrajudicial\nmust be a party to the convention.\nDocuments, supra.\nIf neither an applicable international convention nor a special ar-\nIf there is no special arrangement and if the agency or instrumen-\nrangement exists, paragraph (3) would provide for service by mail.\ntality has no representative in the United States, service may be made\nThe clerk of the court would send a copy of a \"notice of suit\" as pre-\nunder one of the three methods provided in subsection (b) (3). The\nscribed by the Secretary of State by regulation, together with a copy of\nfirst two methods provide for service by letter rogatory or request or\nthe summons and complaint, by mail to the head of the foreign state's\nby mail. The third method, subparagraph (C), authoizes a court to\nministry of foreign affairs or its equivalent. This procedure is based\nfashion a method of service, for example under rule 83, F.R. Civ. P.,\non rule 4(i) (1) (D), F.R. Civ. P.\nprovided the method is \"consistent with the law of the place where\nFinally, as a method of last resort, paragraph (4) would provide for\nservice is to be made.\" This latter language takes into account the\nservice through diplomatic channels if service could not be made by\nfact that the laws of foreign countries may prohibit the service in\nmail within 30 days. The clerk of the court would send two copies\ntheir country of judicial documents by process servers from the United\nof the notice of suit, summons and complaint to the Secretary of State\nStates. It is contemplated that no court will direct service upon a\nfor transmittal through diplomatic channels. Transmittal through dip-\nforeign state by appointing someone to make a physical attempt at\nlomatic channels would mean that the Office of Special Consular Serv-\nservice abroad, unless it is clearly consistent with the law of the foreign\nices in the Department of State will pouch a copy of these papers to\njurisdiction where service is to be attempted. It is also contemplated\nthe U.S. Embassy in the foreign state in question. The U.S.\nthat the courts will not direct service in the United States upon dip-\nEmbassy, in turn, would prepare a diplomatic note of transmittal\nlomatic representatives, Hellenic Lines Ltd. V. Moore, 345 F. 2d 978\nand deliver the diplomatic note with the other papers to the appro-\n(D.C. Cir. 1965), or upon consular representatives, Oster V. Dominion\npriate official in the ministry of foreign affairs of the foreign state.\nof Canada, 144 F. Supp. 746 (N.D.N.Y. 1956), aff' 238 F. 2d 400\nUse of diplomatic channels could also include transmittal of the papers\n(2d Cir. 1956).\nby the Department of State to the foreign state's embassy in Wash-\n(c) When Service Is Made.-Subsection (c) of section 1608 estab-\nington, D.C. \"Transmittal\" of the notice of suit, summons and com-\nlishes the time when service shall be deemed to have been made under\nplaint does not require that the foreign state formally accept these\neach of the methods provided in subsections (a) and (b).\npapers. It only requires that these papers be transmitted in such a way\n(d) Time To Answer or Reply.-Subsection (d) of section 1608\nthat the foreign state has actual notice of the suit. All papers to be\ngives each foreign state, political subdivision thereof or agency or\nserved would be accompanied by translations into an official language\ninstrumentality of a foreign state or political subdivision up to 60 days\nof the foreign state. Finally, the Secretary of State would be required\nfrom the time service is deemed to have been made in which to answer\nto send back to the court the diplomatic note used in transmitting the\nor file a responsive pleading. This corresponds to similar provisions\npapers to the foreign state.\napplicable in suits against the United States or its officers or agencies.\nA \"notice of suit\" as used in this section would advise a foreign\nRule 12(a), F.R. Civ. P.\nstate of the legal proceeding, it would explain the legal significance\n(e) Default Judgments.-Subdivision (e) of section 1608 provides\nof the summons, complaint and service, and it would indicate what\nthat no default judgment may be entered against a foreign state, or\n26\n27\nits political subdivisions, agencies or instrumentalities, \"unless the\nSuch attachments can also give rise to serious friction in United\nclaimant establishes his claim or right to relief by evidence satisfactory\nStates' foreign relations. In some cases, plaintiffs obtain numerous at-\nto the court.\" This is the same requirement applicable to default judg-\ntachments over a variety of foreign government assets found in various\nments against the U.S. Government under rule 55 (e), F.R. Civ. P.\nparts of the United States. This shotgun approach has caused sig-\nIn determining whether the claimant has established his claim or right\nnificant irritation to many foreign governments.\nto relief, it is expected that courts will take into account the extent\nAt the same time, one of the fundamental purposes of this bill is\nto which the plaintiff's case depends on appropriate discovery against\nto provide a long-arm statute that makes attachment for jurisdictional\nthe foreign state.3 Once the default judgment is entered, notice of such\npurposes unnecessary in cases where there is a nexus between the claim\njudgment must be sent in the manner prescribed for service in sections\nand the United States. Claimants will clearly benefit from the ex-\n1608(a) or (b).\npanded methods under the bill for service on a foreign state (sec.\nSpecial note should be made of two means which are currently in\n1608), as well as from the certainty that section 1330(b) of the bill\nuse in attempting to commence litigation against a foreign state. First,\nconfers personal jurisdiction over a foreign state in Federal and State\nthe current practice of attempting to commence a suit by attachment\ncourts as to every claim for which the foreign state is not entitled to\nof a foreign state's property would be prohibited under section 1609 in\nimmunity. The elimination of attachment as a vehicle for commenc-\nthe bill, because of foreign relations considerations and because such\ning a lawsuit will ease the conduct of foreign relations by the United\nattachments are rendered unnecessary by the liberal service and juris-\nStates and help eliminate the necessity for determinations of claims\ndictional provisions of the bill. See the analysis to section 1609.\nof sovereign immunity by the State Department.\nA second means, of questionable validity, involves the mailing of a\ncopy of the summons and complaint to a diplomatic mission of the\nSection 1610. Exceptions to Immunity from Attachment or Execution\nforeign state. Section 1608 precludes this method so as to avoid ques-\nSection 1610 sets forth circumstances under which the property of a\ntions of inconsistency with section 1 of article 22 of the Vienna Con-\nforeign state is not immune from attachment or execution to satisfy\nvention on Diplomatic Relations, 23 UST 3227, TIAS 7502 (1972),\na judgment. Though the enforcement or judgments against foreign\nwhich entered into force in the United States on December 13, 1972.\nstate property remains a somewhat controversial subject in interna-\nService on an embassy by mail would be precluded under this bill. See\ntional law, there is a marked trend toward limiting the immunity from\nexecution.\n71 Dept. of State Bull. 458-59 (1974).\nA number of treaties of friendship, commerce and navigation con-\nSection 1609. Immunity from Attachment and Execution of Property\ncluded by the United States permit execution of judgments against\nof a Foreign State\nforeign publicly owned or controlled enterprises (for example, Treaty\nAs in the case of section 1604 of the bill with respect to jurisdiction,\nwith Japan, April 2, 1953, art. 18(2), 4 UST 2063, TIAS 2863). The\nsection 1609 states a general proposition that the property of a foreign\nwidely ratified Brussels Convention for the Unification of Certain\nstate, as defined in section 1603 is immune from attachment and\nRules relating to the Immunity of State-Owned Vessels, April 10, 1926,\nfrom execution, and then exceptions to this proposition are carved out\n196 L.N.T.S. 199, allows execution of judgments against public vessels\nin sections 1610 and 1611. Here, it should be pointed out-that neither\nengaged in commercial services in the same way as against privately\nsection 1610 nor 1611 would permit an attachment for the purpose of\nowned vessels. Although not a party to this treaty, the United States\nobtaining jurisdiction over a foreign state or its property. For this\nfollows a policy of not claiming immunity for its publicly-owned\nreason, section 1609 has the effect of precluding attachments as a means\nmerchant vessels, both domestically, 46 U.S.C. 742, 781, and abroad, 46\nfor commencing a lawsuit.\nU.S.C. 747; 2 Hackworth, Digest of International Law, 438-39 (1941).\nAttachment of foreign government property for jurisdictional pur-\nArticles 20 and 21 of the Geneva Convention on the Territorial Sea\nposes has been recognized \"where under international law a foreign\nand the Contiguous Zone, April 29, 1958, 15 UST 1606, TIAS 5639,\ngovernment is not immune from suit\", and where the property in the\nto which the United States is a party, recognize the liability to execu-\nUnited States is commercial in nature. Weilamann V. Chase Manhattan\ntion under appropriate circumstances of state-owned vessels used in\nBank, 21 Misc. 2d 1086, 192 N.Y.S. 2d 469 (Sup. Ct. N.Y. 1959). Even\ncommercial service.\nin such cases, however, it has been recognized that property attached\nHowever, the traditional view in the United States concerning exe-\nfor jurisdictional purposes cannot be retained to satisfy a judgment\ncution has been that the property of foreign states is absolutely im-\nbecause, under current practice, the property of a foreign sovereign is\nmune from execution. Dexter and Carpenter, Inc. V. Kunglig Jarnvags-\nimmune from execution.\nstyrelsen, 43 F. 2d 705 (2d Cir. 1930). Even after the \"Tate Letter\" of\nAttachments for jurisdictional purposes have been criticized as in-\n1952, this continued to be the position of the Department of State\nvolving U.S. courts in litigation not involving any significant U.S.\nand of the courts. See, Weilamann V. Chase Manhattan Bank, 21 Misc.\ninterest or jurisdictional contacts, apart from the fortuitous presence\n2d 1086, 192 N.Y.S. 2d 469, 473 (Sup. Ct. N.Y. 1959). Sections 1610(a)\nof property in the jurisdiction. Such cases frequently require the\nand (b) are intended to modify this rule by partially lowering the\napplication of foreign law to events which occur entirely abroad.\nbarrier of immunity from execution, SO as to make this immunity con-\nform more closely with the provisions on jurisdictional immunity in\n3 Cf. Statement in the analysis of section 1606 noting that appropriate remedies would\nthe bill.\nbe available under Rule 37, F.R. Civ. P., for an unjustifiable failure to make discovery.\n28\n29\n(a) Execution Against Property of Foreign States. Section 1610(a)\nParagraph (4) would deny immunity from execution against prop-\nrelates to execution against property of a foreign state, including a\nerty of a foreign state which is used for a commercial activity in the\npolitical subdivision, agency, or instrumentality of a foreign state.\nUnited States and is either acquired by succession or gift or is immov-\nThe term \"attachment in aid of execution\" is intended to include at-\nable. Specifically exempted are diplomatic and consular missions and\ntachments, garnishments, and supplemental proceedings available\nthe residences of the chiefs of such missions. This exemption applies\nunder applicable Federal or State law to obtain satisfaction of a judg-\nto all of the situations encompassed by sections 1610 (a) and (b)\nment. See rule 69, F.R. Civ. P. The property in question must be used\nembassies and related buildings could not be deemed to be property\nfor a commercial activity in the United States. If so, attachment in\nused for a \"commercial\" activity as required by section 1610(a) also,\naid of execution, and execution, upon judgments entered by Federal\nsince such buildings are those of the foreign state itself, they could\nor State courts against the foreign state would be permitted in any\nnot be property of an agency or instrumentality engaged in a com-\nof the circumstances set forth in paragraphs (1)-(5) of section\nmercial activity in the United States within the meaning of section\n1610(a).\n1610(b).\nParagraph (1) relates to explicit and implied waivers, and is gov-\nParagraph (5) of section 1610(a) would deny immunity with re-\nerned by the same principles that apply to waivers of immunity from\nspect to obligations owed to a foreign state under a policy of liability\njurisdiction under section 1605(a) (1) of the bill. A foreign state\ninsurance. Such obligations would after judgment be treated as prop-\nmay have waived its immunity from execution, inter alia, by the pro-\nerty of the foreign state subject to garnishment or related remedies in\nvisions of a treaty, a contract, an official statement, or certain steps\naid or in place of execution. The availability of such remedies would,\ntaken by. the foreign state in the proceedings leading to judgment\nof course, be governed by applicable State or Federal law. Paragraph\nor to execution. As in section 1605(a) (1), a waiver on behalf of an\n(5) is intended to facilitate recovery by individuals who may be in-\nagency or instrumentality of a foreign state may be made either by\njured in accidents, including those involving vehicles operated by a\nthe agency or instrumentality or by the foreign state itself.\nforeign state or by its officials, or employees acting within the scope\nParagraph (2) of section 1610(a) denies immunity from execution\nof their authority.\nagainst property used by a foreign state for a commercial activity\n(b) Additional Execution Against Agencies and Instrumentalities\nin the United States, provided that the commercial activity gave rise\nEngaged in Commercial Activity in the United States.-Section 1610\nto the claim upon which the judgment is based. Included would be\n(b) provides for execution against the property of agencies or instru-\ncommercial activities encompassed by section 1605(a) (2). The pro-\nmentalities of a foreign state in circumstances additional to those\nvision also includes a commercial activity giving rise to a claim with\nprovided in section 1610(a). However, the agency or instrumentality\nrespect to which the foreign state has waived immunity under section\nmust be engaged in a commercial activity in the United States. If so,\n1605 (a) (1). In addition, it includes a commercial activity which\nthe plaintiff may obtain an attachment in aid of execution or execu-\ngave rise to a maritime lien with respect to which an admiralty suit\nwas brought under section 1605(b). One could, of course, execute\ntion against any property. commercial and noncommercial, of the\nagainst commercial property other than a vessel or cargo which is\nagency or instrumentality, but only in the circumstances set forth in\nthe subject of a suit under section 1605(b), provided that the prop-\nparagraphs (1) and (2).\nerty was used in the same commercial activity upon which the maritime\nParagraph (1) denies immunity from execution against any prop-\nlien was based.\nerty of an agency or instrumentality engaged in a commercial activity\nThe language \"is or was used\" in paragraph (2) contemplates a\nin the United States, where the agency or instrumentality has waived\nsituation where property may be transferred from the commercial\nits immunity from execution. See the analysis to paragraph (1) of\nactivity which is the subject of the suit in an effort to avoid the proc-\nsection 1610(a).\ness of the court. This language, however, does not bear on the question\nParagraph (2) of section 1610(b) denies immunity from execution\nof whether particular property is to be deemed property of the entity\nagainst any property of an agency or instrumentality engaged in a\nagainst which the judgment was obtained. The courts will have to\ncommercial activity in the United States in order to satisfy a judg-\ndetermine whether property \"in the custody of\" an agency or instru-\nment relating to a claim for which the agency or instrumentality is not\nmentality is property \"of\" the agency or instrumentality, whether\nimmune by virtue of section 1605(a) (2), (3) or (5), or 1605(b).\nproperty held by one agency should be deemed to be property of\nProperty will be subject to execution irrespective of whether the\nanother, whether property held by an agency is property of the for-\nproperty was used for the same commercial or other activity upon\neign state. See Prelude Corp. V. Owners of F/V Atlantic, 1971, A.M.C.\nwhich the claim giving rise to the judgment was based.\n2651 (N.D. Calif.) ; American Hawaiian Ventures v. M.V.J. Latuhar-\nSection 1610(b) will not permit execution against the property of\nhary, 257 F. Supp. 622, 626 (D.N.J. 1966).\none agency or instrumentality to satisfy a judgment against another,\nParagraph (3) would deny immunity from execution against prop-\nunrelated agency or instrumentality. See Prelude Corp. V. Owners of\nerty of a foreign state which is used for a commercial activity in the\nF/V Atlantic. 1971 A.M.C. 2651 (N.D. Calif.). There are compelling\nUnited States and which has been taken in violation of international\nreasons for this. If U.S. law did not respect the separate juridical\nlaw or has been exchanged for property taken in violation of interna-\nidentities of different agencies or instrumentalities, it might encourage\ntional law. See the analysis to section 1605 (a) (3).\nforeign jurisdictions to disregard the juridical divisions between differ-\n30\n31\nent U.S. corporations or between a U.S. corporation and its independ-\ninter alia, the International Monetary Fund and the World Bank. The\nent subsidiary. However, a court might find that property held by one\nreference to \"international organizations\" in this subsection is not in-\nagency is really the property of another. See the analysis to section\ntended to restrict any immunity accorded to such international orga-\n1610(a) (2).\nnizations under any other law or international agreement.\n(c) Necessity of court order following reasonable notice.-Section\n(b) Central bank funds and military property.-Section 1611 (b) (1)\n1610(c) prohibits attachment or execution under sections\nprovides for the immunity of central bank funds from attachment or\nand (b) unless the court has issued an order for such attachment and\nexecution. It applies to funds of a foreign central bank or monetary\nexecution. In some jurisdictions in the United States, attachment and\nauthority which are deposited in the United States and \"held\" for the\nexecution to satisfy a judgment may be had simply by applying to a\nbank's or authority's \"own account\"-i.e., funds used or held in con-\nclerk or to a local sheriff. This would not afford sufficient protection to\nnection with central banking activities, as distinguished from funds\na foreign state. This subsection contemplates that the courts will\nused solely to finance the commercial transactions of other entities or\nexercise their discretion in permitting execution. Prior to ordering\nof foreign states. If execution could be levied on such funds without\nattachment and execution, the court must determine that a reasonable\nan explicit waiver, deposit of foreign funds in the United States\nperiod of time has elapsed following the entry of judgment, or in cases\nmight be discouraged. Moreover, execution against the reserves of\nof a default judgment, since notice of the judgment was given to the\nforeign states could cause significant foreign relations problems.\nforeign state under section 1608(e). In determining whether the\nSection 1611 (b) (2) provides immunity from attachment and execu-\nperiod has been reasonable, the courts should take into account pro-\ntion for property which is, or is intended to be, used in connection with\ncedures, including legislation, that may be necessary for payment of a\na military activity and which fulfills either of two conditions: the\njudgment by a foreign state, which may take several months; repre-\nproperty is either (A) of a military character or (B) under the con-\nsentations by the foreign state of steps being taken to satisfy the judg-\ntrol of a military authority or defense agency. Under the first condi-\nment; or any steps being taken to satisfy the judgment; or evidence\ntion, property is of a military character if it consists of equipment in\nthat the foreign state is about to remove assets from the jurisdiction to\nthe broad sense-such as weapons, ammunition, military transport,\nfrustrate satisfaction of the judgment.\nwarships, tanks, communications equipment. Both the character and\n(d) Attachments upon explicit waiver to secure satisfaction of a\nthe function of the property must be military. The purpose of this\njudgment.-Section 1610(d) relates to attachment against the prop-\ncondition is to avoid frustration of United States foreign policy in\nerty of a foreign state, or of a political subdivision, agency or instru-\nconnection with purchases of military equipment and supplies in the\nmentality of a foreign state, prior to the entry of judgment or prior\nUnited States by foreign governments.\nto the lapse of the \"reasonable period of time\" required under section\nThe second condition is intended to protect other military property,\n1610 Immunity from attachment will be denied only if the foreign\nsuch as food, clothing, fuel and office equipment which, although not of\nstate, political subdivision, agency or instrumentality has explicitly\na military character, is essential to military operations. \"Control\" is\nwaived its immunity from attachment prior to judgment, and only if\nintended to include authority over disposition and use in addition to\nthe purpose of the attachment is to secure satisfaction of a judgment\nphysical control, and a \"defense agency\" is intended to include civilian\nthat has been or may ultimately be entered against the foreign state\ndefense organizations comparable to the Defense Supply Agency in the\nand not to secure jurisdiction. This subsection provides, in cases where\nUnited States. Each condition is subject to the overall condition that\nthere has been an explicit waiver, a provisional remedy, for example\nproperty will be immune only if its present or future use is military\nto prevent assets from being dissipated or removed from the jurisdic-\n(e.g., surplus military equipment withdrawn from military use would\ntion in order to frustrate satisfaction of a judgment.\nnot be immune). Both conditions will avoid the possibility that a for-\nSection 1611. Certain types of property immune from execution\neign state might permit execution on military property of the United\nSection 1611 exempts certain types of property from the immunity\nStates abroad under a reciprocal application of the act.\nprovisions of section 1610 relating to attachment and exectuion.\nSEC. 5. VENUE\n(a) Property held by international organizations.-Section 1611\n(a) precludes attachment and execution against funds and other\nThis section amends 28 U.S.C. § 1391, which deals with venue gen-\nproperty of certain international organizations. The purpose of this\nerally. Under the new subsection (f), there are four express provisions\nsubsection is to permit international organizations designated by the\nfor venue in civil actions brought against foreign states, political sub-\nPresident pursuant to the International Organizations Immunities\ndivisions or their agencies or instrumentalities.\nAct, 22 U.S.C. 288, et seq., to carry out their functions from their offices\n(1) The action may be brought in the judicial district wherein a\nlocated in the United States without hindrance by private claimants\nsubstantial part of the events or omissions giving rise to the claim\nseeking to attach the payment of funds to a foreign state; such at-\noccurred.\" This provision is analogous to 28 U.S.C. § 1391 (e), which\ntachments would also violate the immunities accorded to such interna-\nallows an action against the United States to be brought, inter alia, in\ntional institutions. See also article 9, section 3 of the Articles of Agree-\nany judicial district in which \"the cause of action arose.\" The test\nment of the International Monetary Fund, TIAS 1501, 60 Stat. 1401.\nadopted, however, is the newer test recommended by the American Law\nInternational organizations covered by this provision would include,\nInstitute and incorporated in S. 1876, 92d Congress, 1st session, which\n32\n33\ndoes not imply that there is only one such district applicable in each\ncase. In cases under section 1605 (a) (2), involving a commercial activ-\nUpon removal, the action would be heard and tried by the appropri-\nity abroad that causes a direct effect in the United States, venue would\nate district court sitting without a jury. (Cf. 28 U.S.C. 2402, preclud-\nexist wherever the direct effect generated \"a substantial part of the\ning jury trials in suits against the United States.) Thus, one effect\nevents\" giving rise to the claim.\nof removing an action under the new section 1441(d) will be to ex-\nIn cases where property or rights in property are involved, the action\ntinguish a demand for a jury trial made in the state court. (Cf. rule\nmay be brought in the judicial district in which \"a substantial part of\n81 (c), F.R. Civ. P.) Because the judicial power of the United States\nthe property that is the subject of the action is situated.\" No hardship\nspecifically encompasses actions \"between a State, or the Citizens\nwill be caused to the foreign state if it is subject to suit where it has\nthereof, and foreign States\" (U.S. Constitution, art. III, sec. 2, cl. 1),\nchosen to place the property that gives rise to the dispute.\nthis premption of State court procedures in cases involving foreign\n(2) If the action is a suit in admiralty to enforce a maritime lien\nsovereigns is clearly constitutional.\nThis section, again, would not apply to entities owned by a foreign\nagainst a vessel or cargo of a foreign state, and if the action is brought\nstate which are citizens of a State of the United States as defined in\nunder the new section 1605(b) in this bill, the action may be brought\nin the judicial district in which the vessel or cargo is situated at the\n28 U.S.C. 1332 (c) and (d), or created under the laws of a third\ncountry.\ntime notice is delivered pursuant to section 1605 (b) (1).\nSEC. 7. SEVERABILITY OF PROVISIONS\n(3) If the action is brought against an agency or instrumentality of\na foreign state, as defined in the new section 1603 (b) in the bill, it may\nThis action provides that if a portion of the act or any application\nbe brought in the judicial district where the agency or instrumentality\nof the act should be found invalid for any reason, such invalidity\nis licensed to do business or is doing business. This provision is based on\nwould not affect any other provision or application of the act.\n28 U.S.C. § 1391 (c).\n(4) If the action is brought against a foreign state or political sub-\nSEC. 8. EFFECTIVE DATE\ndivision, it may be brought in the U.S. District Court for the District\nof Columbia. It is in the District of Columbia that foreign states have\nThis section establishes that the effective date of the act shall be 90\ndiplomatic representatives and where it may be easiest for them to\ndays after it becomes law. A 90-day period is deemed necessary in\ndefend. New subsection (f) would, of course, not apply to entities that\norder to give adequate notice of the act and its detailed provisions to\nare owned by a foreign state and are also citizens of a state of the\nall foreign states.\nUnited States as defined in 28 U.S.C. 1332 (c) and (d). For purposes\nof this bill, such entities are not agencies or instrumentalities of a\nSTATEMENTS UNDER CLAUSE 2(1) (2) (B), CLAUSE (1) (3) AND\nforeign state. (See the analysis to sec. 1603 (b).)\nCLAUSE (1) (4) OF RULE XI AND CLAUSE (a) (1) OF RULE XIII\nAs with other provisions in 28 U.S.C. 1391, venue in any court\nOF THE HOUSE OF REPRESENTATIVES\ncould be waived by a foreign state, such as by failing to object to\nimproper venue in a timely manner. (See rule 12(h), F.R. Civ. P.)\nCOMMITTEE VOTE\nSEC. 6. REMOVAL OF CASES FROM STATE COURTS\n(Rule XI 2(1) (2) (B))\nThe bill adds a new provision to 28 U.S.C. 1441 to provide for re-\nOn September 9, 1976, the Full Committee on the Judiciary approved\nmoval to a Federal district court of civil actions brought in the courts\nthe bill H.R. 11315 by voice vote.\nof the States against a foreign state or a political subdivision, agency\nCOST\nor instrumentality of a foreign state. In view of the potential sensi-\ntivity of actions against foreign states and the importance of de-\n(Rule XIII (a) (1))\nveloping a uniform body of law in this area, it is important to give\nforeign states clear authority to remove to a Federal forum actions\nThe enactment of this bill will not require any new or additional\nbrought against them in the State courts. New subsection (d) of sec-\nauthorization or appropriation of funds. Indeed, the enactment of the\ntion 1441 permits the removal of any such action at the discretion of\nbill will result in a net saving, in an undetermined amount, in that the\nthe foreign state, even if there are multiple defendants and some of\nDepartment of State will no longer have to undertake a consideration\nthese defendants desire not to remove the action or are citizens of the\nof diplomatic requests for sovereign immunity, and the Department\nState in which the action has been brought.\nof Justice will not be required to appear in the courts in support of the\nAs with other removal provisions, a petition for removal must be\nsuggestions of immunity that are filed pursuant to the Department of\nfiled with the appropriate district court in a timely manner. (28\nState's sovereign immunity determinations.\nU.S.C. 1446.) However, in view of the 60-day period provided in\nsection 1608 (c) in the bill and in view of the bill's preference that\nOVERSIGHT STATEMENT\nactions involving foreign states be tried in federal courts, the time\nlimitations for filing a petition of removal under 28 U.S.C. 1446 may\n(Rule XI 2(1) (3) (A))\nbe extended \"at any time\" for good cause shown.\nThe Subcommittee on Administrative Law and Governmental Re-\nlations of this committee exercises the committee's oversight responsi-\n34\n35\nbility with reference matters involving the immunity of foreign states,\nCHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED\nin accordance with Rule VI(b) of the Rules of the Committee on the\nJudiciary. The favorable consideration of this bill was recommended\n[The amendment to chapter 85 of title 28, United States Code, add\nby that subcommittee and the committee has determined that legisla-\na new sec. 1330 and amend sec. 1331 (a) (2) and (3).\ntion should be enacted as set forth in this bill.\nThe bill adds a new chapter 97 to title 28, United States Code,\ncomprised of sec. 1602 through 1611.\nBUDGET STATEMENT\n(Secs. 1391 and 1441 of title 28, United States Code, are amended to\ninclude new provisions relating to suits against foreign states.]\n(Rule XI 2(1) (3) (B))\nIn compliance with paragraph 2 of clause 3 of rule XIII of the Rules\nof the House of Representatives, changes in existing law made by the\nAs has been indicated in the committee statement as to cost made\nbill are shown as follows (existing law proposed to be omitted is\npursuant to Rule XIII (7) (a) (1), the bill will not require any new\nenclosed in black brackets, new matter is printed in italic, existing\nor additional authorization or appropriation of funds. The bill does\nlaw in which no change is proposed is shown in roman) :\nnot involve new budget authority nor does it require new or increased\ntax expenditures as contemplated by Clause 2(1) (3) (B) of Rule XI.\nTITLE 28-JUDICIARY AND JUDICIAL PROCEDURE\nESTIMATE OF THE CONGRESSIONAL BUDGET OFFICE\n(Rule XI 2(1) (3) (C))\nPART IV-JURISDICTION AND VENUE\nChap.\nThe estimate received from the Director of the Congressional\nSec.\nBudget Office is as follows:\n81. Supreme Court\n1251\n83. Courts of Appeals\n1291\nCONGRESS OF THE UNITED STATES,\n85. District Courts; Jurisdiction\n1331\nCONGRESSIONAL BUDGET OFFICE,\n87. District Courts; Venue\n1391\n89. District Courts; Removal of Cases from State Courts\n1441\nWashington, D.C., July 6, 1976.\n91. Court of Claims\n1491\nHon. PETER W. RODINO, Jr.,\n93. Court of Customs and Patent Appeals\n1541\nChairman, Committee on the Judiciary, U.S. House of Representa-\n95. Customs Court\n1581\ntives, Washington, D.C.\n97. Jurisdictional Immunities of Foreign States\n1602\nDEAR MR. CHAIRMAN: In response to your letter of June 10, 1976\nand pursuant to section 403 of the Congressional Budget Act, the Con-\ngressional Budget Office has analyzed the costs associated with H.R.\nCHAPTER 85.-DISTRICT COURTS JURISDICTION\n11315, the \"Foreign Sovereign Immunities Act of 1976.\" This legisla-\nSec.\ntion is estimated to have no budgetary impact.\n1330. Actions against foreign states.\n1331. Federal question; amount in controversy ; costs.\nShould the committee SO desire, we would be pleased to provide\n1332. Diversity of citizenship; amount in controversy ; costs.\nadditional assistance on this and future legislation.\n1333. Admiralty, maritime and prize cases.\nSincerely,\n1334. Bankruptcy matters and proceedings.\nALICE M. RIVLIN,\n1335. Interpleader.\n1336. Interstate Commerce Commission's orders.\nDirector.\n1337. Commerce and anti-trust regulations.\n1338. Patents, copyrights, trade-marks and unfair competition.1\nOVERSIGHT FINDINGS AND RECOMMENDATIONS OF THE COMMITTEE ON\n1339. Postal matters.\n1340. Internal revenue ; customs duties.\nGOVERNMENT OPERATIONS\n1341. Taxes by States.\n1342. Rate orders of State agencies.\n(Rule XI 2(1) (3) (D))\n1343. Civil rights [and elective franchise.]1\n1344. Election disputes.\nNo findings or recommendations of the Committee on Government\n1345. United States as plaintiff.\nOperations were received as referred to in subdivision (D) of clause\n1346. United States as defendant.\n2(1) (3) of House Rule XI.\n1347. Partition action where United States is joint tenant.\n1348. Banking association as party.\n1349. Corporation organized under federal law as party.\nINFLATIONARY IMPACT\n1350. Alien's action for tort.\n1351. Consuls and vice consuls as defendants.\n(Rule XI 2(1) (3))\n1352. Bonds executed under federal law.\n1353. Indian allotments.\nIn compliance with clause 2(1) (4) of House Rule XI it is stated\nthat this legislation will have no inflationary impact on prices and\n1 Section catchline amended without amending analysis.\ncosts in the operation of the national economy.\n36\n37\n1354. Land grants from different states.\nsurer of a policy or contract of liability insurance, whether incorpo-\n1355. Fine, penalty or forfeiture.\n1356. Seizures not within admiralty and maritime jurisdiction.\nrated or unincorporated, to which action the insured is not joined as\n1357. Injuries under Federal laws.\na party-defendant, such insurer shall be deemed a citizen of the State\n1358. Eminent domain.\nof which the insured is a citizen, as well as of any State by which the\n1359. Parties collusively joined or made.\ninsurer has been incorporated and of the State where it has its prin-\n1360. State civil jurisdiction in actions to which Indians are parties.\n1361. Action to compel an officer of the United States to perform his duty.\ncipal place of business.\n1362. Indian tribes.\n(d) The word \"States\", as used in this section, includes the Terri-\n1363. Construction of references to laws of the United States or Acts of Congress.\ntories, the District of Columbia, and the Commonwealth of Puerto\nRico. (June 25, 1948, ch. 646, 62 Stat. 930; July 26, 1956, ch. 740, 70\n§ 1330. Action against foreign states\nStat. 658; July 25, 1958, Pub. L. 85-554, § 2, 72 Stat. 415; Aug. 14,\n1964, Pub. L. 88-439, § 1, 78 Stat. 445.)\n(a) The district courts shall have original jurisdiction without re-\ngard to amount in controversy of any nonjury civil action against a\nforeign state as defined in section 1603 (a) of this title as to any claim\n§ 1391. Venue generally.\nfor relief in personam with respect to which the foreign state is not\nentitled to immunity either under sections 1605-1607 of this title or\n(a) A civil action wherein jurisdiction is founded only on diversity\nunder any applicable international agreement.\nof citizenship may, except as otherwise provided by law, be brought\n(b) Personal jurisdiction over a foreign state shall exist as to every\nonly in the judicial district where all plaintiffs or all defendants\nclaim for relief over which the district courts have jurisdiction under\nreside, or in which the claim arose.\nsubsection (a) where service has been made under section 1608 of this\n(b) A civil action wherein jurisdiction is not founded solely on\ntitle.\ndiversity of citizenship may be brought only in the judicial district\n(c) For purposes of subsection (b), an appearance by a foreign\nwhere all defendants reside, or in which the claim arose, except as\nstate does not confer personal jurisdiction with respect to any claim\notherwise provided by law.\nfor relief not arising out of any transaction or occurrence enumerated\n(c) A corporation may be sued in any judicial district in which it is\nin sections 1605-1607 of this title.\nincorporated or licensed to do business or is doing business, and such\njudicial district shall be regarded as the residence of such corporation\nfor venue purposes.\n§ 1332. Diversity of citizenship; amount in controversy; costs\n(d) An alien may be sued in any district.\n(a) The district courts shall have original jurisdiction of all civil\n(e) A civil action in which each defendant is an officer or employee\nactions where the matter in controversy exceeds the sum or value of\nof the United States or any agency thereof acting in his official\n$10,000, exclusive of interest and costs, and is between-\ncapacity or under color of legal authority, or an agency of the United\n(1) citizens of different States;\nStates, may, except as otherwise provided by law, be brought in any\n[(2) citizens of a State, and foreign states or citizens or subjects\njudicial district in which (1) a defendant in the action resides, or (2)\nthereof; and\nthe cause of action arose, or (3) any real property involved in the\n(3) citizens of different States and in which foreign states or citi-\naction is situated, or (4) the plaintiff resides if no real property is\nzens or subjects thereof are additional parties.\ninvolved in the action.\n(2) citizens of a State and citizens or subjects of a foreign state;\n(f) A civil action against a foreign state as defined in section\n(3) citizens of different States and in which citizens or subjects of\n1603 (a) of this title may be brought-\na foreign state are additional parties; and\n(1) in any judicial district in which a substantial part of the\n(4) a foreign state, defined in section 1603 (a) of this title, as plain-\nevents or omissions giving rise to the claim occurred, or a sub-\ntiff and citizens of a State or of different States.\nstantial part of property that is the subject of the action is\n(b) Except when express provision therefor is otherwise made in a\nsituated;\nstatute of the United States, where the plaintiff who files the case orig-\n(2) in any judicial district in which the vessel or cargo of a\ninally in the Federal courts is finally adjudged to be entitled to re-\nforeign state is situated, if the claim is asserted under section\ncover less than the sum or value of $10,000, computed without regard\n1605 (b) of this title;\nto any setoff or counterclaim to which the defendant may be adjudged\n(3) in any judicial district in which the agency or instru-\nto be entitled, and exclusive of interest and costs, the district court\nmentality is licensed to do business or is doing business, if the\nmay deny costs to the plaintiff and, in addition, may impose costs on\naction is brought against an agency or instrumentality of a\nthe plaintiff.\nforeign state as defined in section 1603 (b) of this title; or\n(c) For the purposes of this section and section 1441 of this title, a\n(4) in the United States District Court for the District of\ncorporation shall be deemed a citizen of any State by which it has been\nColumbia if the action is brought against a foreign state or po-\nincorporated and of the State where it has its principal place of bus-\nlitical subdivision thereof.\niness: Provided further, That in any direct action against the in-\nThe summons and complaint in such an action shall be served as\nprovided by the Federal Rules of Civil Procedure except that the\n38\n39\ndelivery of the summons and complaint to the officer or agency as\nrights of both foreign states and litigants in United States courts.\nrequired by the rules may be made by certified mail beyond the\nUnder international law, states are not immune from the jurisdiction\nterritorial limits of the district in which the action is brought.\n(June 25, 1948, ch. 646, 62 Stat. 935; Oct. 5, 1962, Pub. L. 87-748, § 2,\nof foreign courts insofar as their commercial activities are concerned,\nand their commercial property may be levied upon for the satisfaction\n76 Stat. 744; Dec. 23, 1963, Pub. L. 88-234, 77 Stat. 473; Nov. 2, 1966,\nPub. L. 89-714, § § 1, 2, 80 Stat. 1111.)\nof judgments rendered against them in connection with their com-\nmercial activities. Claims of foreign states to immunity should hence-\nforth be decided by courts of the United States and of the States in\n§ 1441. Actions removable generally.\nconformity with the principles set forth in this chapter.\n(a) Except as otherwise expressly provided by Act of Congress,\n§ 1603. Definitions\nany civil action brought in a State court of which the district courts\nFor purposes of this chapter—\nof the United States have original jurisdiction, may be removed by\n(a) A \"foreign state\", except as used in section 1608 of this title,\nthe defendant or the defendants, to the district court of the United\nincludes a political subdivision of a foreign state or an agency or\nStates for the district and division embracing the place where such\ninstrumentality of a foreign state as defined in subsection (b).\naction is pending.\n(b) An \"agency or instrumentality of a foreign state\" means\n(b) Any civil action of which the district courts have original\nany entity-\njurisdiction founded on a claim or right arising under the Constitu-\n(1) which is a separate legal person, corporate or other-\ntion, treaties or laws of the United States shall be removable without\nwise, and\nregard to the citizenship or residence of the parties. Any other such\n(2) which is an organ of a foreign state or political sub-\naction shall be removable only if none of the parties in interest prop-\ndivision thereof, or a majority of whose shares or other\nerly joined and served as defendants is a citizen of the State in which\nownership interest is owned my a foreign state or political\nsuch action is brought.\nsubdivision thereof, and\n(c) Whenver a separate and independent claim or cause of action,\n(3) which is neither a citizen of a State of the United\nwhich would be removable if sued upon alone, is joined with one or\nStates as defined in section 1332 (c) and (d) of this title, nor\nmore otherwise non-removable claims or causes of action, the entire\ncreated under the laws of any third country.\ncase may be removed and the district court may determine all issues\n(c) The \"United States\" includes all territory and waters, con-\ntherein, or, in its discretion, may remand all matters not otherwise\ntinental or insular, subject to the jurisdiction of the United States.\nwithin its original jurisdiction.\n(d) A \"commercial activity\" means either a regular course of\n(d) Any civil action brought in a State court against a foreign\ncommercial conduct or a particular commercial transaction or act.\nstate as defined in section 1603(a) of this title may be removed by the\nThe commercial character of an activity shall be determined by\nforeign state to the district court of the United States for the district\nreference to the nature of the course of conduct or particular trans-\nand division embracing the place where such action is pending. Upon\naction or act, rather than by reference to its purpose.\nremoval the action shall be tried by the court without jury. Where\n(e) A \"commercial activity carried on in the United States\nremoval is based upon this subsection, the time limitations of section\nby a foreign state\" means commercial activity carried on by such\n1446 (b) of this chapter may be enlarged at any time for cause shown.\nstate and having substantial contact with the United States.\n§ 1604. Immunity of a foreign state from jurisdiction\nSubject to existing of international agreements of which the United\nCHAPTER 97-JURISDICTIONAL IMMUNITIES OF\nStates is a party at the time of enactment of this Act, a foreign state\nFOREIGN STATES\nshall be immune from the jurisdiction of the courts of the United\nStates and of the States except as provided in sections 1605 to 1607 of\n1602. Findings and declaration of purpose.\n1603. Definitions.\nthis chapter.\n1604. Immunity of a foreign state from jurisdiction.\n§ 1605. General exceptions to the jurisdictional immunity of a\n1605. General exceptions to the jurisdictional immunity of a foreign state.\n1606. Extent of liability.\nforeign state\n1607. Counterclaims.\n(a) A foreign state shall not be immune from the jurisdiction of\n1608. Service; time to answer; default.\ncourts of the United States or of the States in any case-\n1609. Immunity from attachment and execution of property of a foreign state.\n1610. Exceptions to the immunity from attachment or execution.\n(1) in which the foreign state has waived its immunity either\n1611. Certain types of property immune from execution.\nexplicitly or by implication, notwithstanding any withdrawal of\n§ 1602. Findings and declaration of purpose\nthe waiver which the foreign state may purport to effect except in\naccordance with the terms of the waiver;\nThe Congress finds that the determination by United States courts\n(2) in which the action is based upon a commercial activity\nof the claims of foreign states to immunity from the jurisdiction of\ncarried on in the United States by the foreign state; or upon an\nsuch courts would serve the interests of justice and would protect the\nact performed in the United States in connection with a com-\n40\n41\nmercial activity of the foreign state elsewhere; or upon an act\nsonam claim against the foreign state which at that time owns the\noutside the territory of the United States in connection with a\nvessel or cargo involved: Provided, That a court may not award\ncommercial activity of the foreign state elsewhere and that act\njudgment against the foreign state in an amount greater than the\ncauses a direct effect in the United States;\nvalue of the vessel or cargo upon which the maritime lien arose, such\n(3) in which rights in property taken in violation of interna-\nvalue to be determined as of the time notice is served under subsec-\ntional law are in issue and that property or any property\ntion (b) (1) of this section.\nexchanged for such property is present in the United States in\n§ 1606. Extent of liability\nconnection with a commercial activity carried on in the United\nAs to any claim for relief with respect to which a foreign state is\nStates by the foreign state; or that property or any property\nnot entitled to immunity under section 1605 or 1607 of this chapter, the\nexchanged for such property is owned or operated by an agency\nor instrumentality of the foreign state and that agency or instru-\nforeign state shall be liable in the same manner and to the same extent\nmentality is engaged in a commercial activity in the United\nas a private individual under like circumstances; but a foreign state\nStates;\nexcept for an agency or instrumentality thereof shall not be liable for\n(4) in which rights in property in the United States acquired\npunitive damages; if, however, in any case wherein death was caused,\nby succession or gift or rights in immovable property situated in\nthe law of the place where the action or omission occurred provides,\nthe United States are in issue; or\nor has been construed to provide, for damages only punitive in nature,\n(5) not otherwise encompassed in paragraph (2) above, in\nthe foreign state shall be liable for actual or compensatory damages\nwhich money damages are sought against a foreign state for\nmeasured by the pecuniary injuries resulting from such death which\npersonal injury or death, or damage to or loss of property, occur-\nwere incurred by the persons for whose benefit the action was brought.\nring in the United States and caused by the tortious act or omis-\n§ 1607. Counterclaims\nsion of that foreign state or of any official or employee of that\nIn any action brought by a foreign state, or in which a foreign\nforeign state while acting within the scope of his office or employ-\nstate intervenes, in a court of the United States or a State, the foreign\nment; except this paragraph shall not apply to-\nstate shall not be accorded immunity with respect to any counter-\n(A) any claim based upon the exercise or performance or\nclaim-\nthe failure to exercise or perform a discretionary function\n(a) for which a foreign state would not be entitled to immunity\nregardless of whether the discretion be abused, or\nunder section 1605 of this chapter had such claim been brought\n(B) any claim arising out of malicious prosecution, abuse\nin a separate action against the foreign state; or\nof process, libel, slander, misrepresentation, decent, or inter-\n(b) arising out of the transaction or occurrence that is the sub-\nference with contract rights.\nject matter of the claim of the foreign state; or\n(b) A foreign state shall not be immune from the jurisdiction of\n(c) to the extent that the counterclaim does not seek relief\nthe courts of the United States in any case in which a suit in ad-\nexceeding in amount or differing in kind from that sought by the\nmiralty is brought to enforce a maritime lien against a vessel or cargo\nforeign state.\nof the foreign state, which maritime lien is based upon a commercial\n§ 1608. Service; time to answer; default\nactivity of the foreign state: Provided, That-\n(1) notice of the suit is given by delivery of a copy of the\n(a) Service in the courts of the United States and of the States\nsummons and of the complaint to the person, or his agent, having\nshall be made upon a foreign state or political subdivision of a foreign\npossession of the vessel or cargo against which the maritime\nstate:\nlien is asserted; but such notice shall not be deemed to have been\n(1) by delivery of a copy of the summons and complaint in\ndelivered nor may it thereafter be delivered, if the vessel or\naccordance with any special arrangement for service between\ncargo is arrested pursuant to process obtained on behalf of the\nthe plaintiff and the foreign state or political subdivision; or\nparty bringing the suit-unless the party was unaware that the\n(2) if no special arrangement exists, by delivery of a copy\nvessel or cargo of a foreign state was involved, in which event\nof the summons and complaint in accordance with an applicable\nthe service of process of arrest shall be deemed to constitute valid\ninternational convention on service of judicial documents; or\ndelivery of such notice; and\n(3) if service cannot be made under paragraphs (1) or (2),\n(2) notice to the foreign state of the commencement of suit\nby sending a copy of the summons and complaint and a notice\nas provided in section 1608 of this title is initiated within ten\nof suit, together with a translation of each into the official lan-\ndays either of the delivery of notice as provided in subsection\nguage of the foreign state, by any! form of mail requiring a\n(b) (1) of this section, or, in the case of a party who was unaware\nsigned receipt, to be addressed and dispatched by the clerk of\nthat the vessel or cargo of a foreign state was involved, of the\nthe court to the head of the ministry of foreign affairs of the\ndate such party determined the existence of the foreign state's\nforeign state concerned; or\ninterest.\n(4) if service cannot be made within 30 days under paragraph\nWhenever notice is delivered under subsection (b) (1) of this sec-\n(3), by sending two copies of the summons and complaint and\ntion, the maritime lien shall thereafter be deemed to be an in per-\na notice of suit, together with a translation of each into the\n42\n43\nofficial language of the foreign state, by any form of mail re-\n§ 1609. Immunity from attachment and execution of property of\nquiring a signed receipt, to be addressed and dispatched by the\na foreign state\nclerk of the court to the Secretary of State in Washington,\nSubject to existing international agreements to which the United\nDistrict of Columbia, to the attention of the Director of Special\nStates is a party at the time of enactment of this Act, the property\nConsular Services-and the Secretary shall transmit one copy\nin the United States of a foreign state shall be immune from attach-\nof the papers through diplomatic channels to the foreign state\nment, arrest and execution except as provided in sections 1610 and\nand shall send to the clerk of the court a certified copy of the\n1611 of this chapter.\ndiplomatic note indicating when the papers were transmitted.\nAs used in this subsection, a \"notice of suit\" shall mean a notice\n§ 1610. Exceptions to the immunity from attachment or execution\naddressed to a foreign state and in a form prescribed by the Secretary\n(a) The property in the United States of a foreign state, as de-\nof State by regulation.\nfined in section 1603 (a) of this chapter, used for a commercial activ-\n(b) Service in the courts of the United States and of the States\nity in the United States, shall not be immune from attachment in aid\nshall be made upon an agency or instrumentality of a foreign state:\nof execution, or from execution, upon a judgment entered by a court\n(1) by delivery of a copy of the summons and complaint in\nof the United States or of a State after the effective date of this Act,\naccordance with any special arrangement for service between the\nif-\nplaintiff and the agency or instrumentality; or\n(1) the foreign state has waived its immunity from attach-\n(2) if no special arrangement exists, by delivery of a copy of\nment in aid of execution or from execution either explicitly or\nthe summons and complaint either to an officer, a managing or\nby implication, notwithstanding any withdrawal of the waiver\ngeneral agent or to any other agent authorized by appointment\nthe foreign state may purport to effect except in accordance with\nor by law to receive service of process in the United States; or in\nthe terms of the waiver, or\naccordance with an applicable international convention on service\n(2) the property is or was used for the commercial activity\nof judicial documents; or\nupon which the claim is based, or\n(3) if service cannot be made under paragraphs (1) or (2),\n(3) the execution relates to a judgment establishing rights in\nand if reasonably calculated to give actual notice, by delivery of\nproperty which has been taken in violation of international law\na copy of the summons and complaint, together with a translation\nor which has been exchanged for property taken in violation of\nof each into the official language of the foreign state-\ninternational law, or\n(A) as directed by an authority of the foreign state or\n(4) the execution relates to a judgment establishing rights\npolitical subdivision in response to a letter rogatory or re-\nin property-\nquest, or\n(A) which is acquired by succession or gift, or\n(B) by any form of mail requiring a signed receipt, to be\n(B) which is immovable and situated in the United States:\naddressed and dispatched by the clerk of the court to the\nProvided, That such property is not used for purposes of\nagency or instrumentality to be served, or\nmaintaining a diplomatic or consular mission or the residence\n(C) as directed by order of the court consistent with the\nof the Chief of such mission, or\nlaw of the place where service is to be made.\n(5) the property consists of any contractual obligation or any\n(c) Service shall be deemed to have been made-\n(1) in the case of service under subsection (a) (4), as of the\nproceeds from such a contractual obligation to indemnify or hold\ndate of transmittal indicated in the certified copy of the diplo-\nharmless the foreign state or its employees under a policy of\nautomobile or other liability or casualty insurance covering the\nmatic note; and\n(2) in any other case under this section, as of the date of receipt\nclaim which merged into the judgment.\nindicated in the certification, signed and returned postal receipt,\n(b) In addition to subsection (α), any property in the United\nor other proof of service applicable to the method of service\nStates of an agency or instrumentality of a foreign state engaged in\nemployed.\ncommercial activity in the United States shall not be immune from\n(d) In any action brought in a court of the United States or of a\nattachment in aid of execution, or from execution, upon a judgment\nState, a foreign state, a political subdivision thereof, or an agency or\nentered by a court of the United States or of α State after the effec-\ninstrumentality of a foreign state shall serve an answer or other re-\ntive date of this Act, if-\nsponsive pleading to the complaint within sixty days after service has\n(1) the agency or instrumentality has waived its immunity\nbeen made under this section.\nfrom attachment in aid of execution or from execution either\n(e) No judgment by default shall be entered by a court of the United\nexplicitly or implicitly, notwithstanding any withdrawal of the\nStates or of a State against a foreign state, a political subdivision\nwaiver the agency or instrumentality may purport to effect ex-\nthereof, or an agency or instrumentality of a foreign state, unless the\ncept in accordance with the terms of the waiver, or\nclaimant establishes his claim or right to relief by evidence satisfac-\n(2) the judgment relates to a claim for which the agency or\ntory to the court. A copy of any such default judgment shall be sent\ninstrumentality is not immune by virtue of section 1605(a) (2),\nto the foreign state or political subdivision in the manner prescribed\n(3), or (5), or 1605(b) of this chapter, regardless of whether\nfor service in this section.\n44\n45\nthe property is or was used for the activity upon which the\nenclosed draft bill, entitled \"To define the circumstances in which\nclaim is based.\nforeign states are immune from the jurisdiction of U.S. courts and in\n(c) No attachment or execution referred to in subsections (a) and\nwhich execution may not be levied on their assets, and for other pur-\n(b) of this section shall be permitted until the court has ordered such\nposes.\" This is a proposed revision of the draft bill which was sub-\nattachment and execution after having determined that a reasonable\nmitted in a letter (enclosed) to you dated January 16, 1973, and\nperiod of time has elapsed following the entry of judgment and the\nsubsequently introduced by Chairman Peter W. Rodino, Jr., and\ngiving of any notice required under section 1608 (e) of this chapter.\nCongressman Edward Hutchinson as H.R. 3493. A revised section-\n(d) The property of a foreign state, as defined in section 1603\nby-section analysis explaining the provisions of the bill in some detail\nof this chapter, used for a commercial activity in the United States,\nis also enclosed. A hearing was held on H.R. 3493 before the Sub-\nshall not be immune from attachments prior to the entry of judgment\ncommittee on Claims and Governmental Relations of the Committee\nin any action brought in a court of the United States or of a State,\nof the Judiciary in the House of Representatives in the 1st session of\nor prior to the elapse of the period of time provided in subsection\nthe 93d Congress on June 7, 1973.\n(c) of this section, if I-\nThe broad purposes of this legislation-to facilitate and depoliticize\n(1) the foreign state has explicitly waived its immunity from\nlitigation against foreign states and to minimize irritations in foreign\nattachment prior to judgment, notwithstanding any withdrawal\nrelations arising out of such litigation-remain the same. To this end\nof the waiver the foreign state may purport to effect except in\nthe revised bill, like its predecessor, would entrust the resolution of\naccordance with the terms of the waiver, and\nquestions of sovereign immunity to the judicial branch of Government.\n(2). the purpose of the attachment is to secure satisfaction of\nThe statute would codify and refine the \"restrictive theory\" of\na judgment that has been or may ultimately be entered against\nsovereign immunity which has guided United States practice with\nthe foreign state, and not to obtain jurisdiction.\nrespect to jurisdiction originally set forth in the letter of May 19,\n1952, from the Acting Legal Adviser, Jack B. Tate, to the Acting\n\"§ 1611. Certain types of property immune from execution\nAttorney General, Philip B. Perlman. It would also replace the\n(a) Notwithstanding the provisions of section 1610 of this chap-\nabsolute immunity now accorded foreign states from execution of\nter, the property of those organizations designated by the President\njudgment with an immunity from execution conforming more closely\nas being entitled to enjoy the privileges, exemptions, and immunities\nto the restrictive theory of immunity from jurisdiction. The measure\nprovided by the International Organizations Immunities Act shall\nalso includes provisions for service of process, venue, and jurisdiction\nnot be subject to attachment or any other judicial process impeding\nin cases against foreign states which would make it unnecessary to\nthe disbursement of funds to, or on the order of, a foreign state as\nattach the assets of foreign states for purposes of jurisdiction.\nthe result of an action brought in the courts of the United States or\nNumerous technical changes have been made in the bill on the basis\nof the States,\nof the hearing in the House of Representatives, commentaries in a\n(b) Notwithstanding the provisions of section 1610 (of this chapter\nnumber of legal journals, and extensive discussions which have been\nter, the property of a foreign state shall be immune from attachment\nheld with members of the bar as well as the reports and recommenda-\nand from execution, if-\ntions of committees of several bar associations. A number of these\n(1) the property is that of a foreign central bank or mone-\ntechnical revisions are important, but none of them alters the basic\ntary authority held for its own account, unless such bank or\nconcept of the legislation as originally submitted.\nauthority, or its parent foreign government, has explicity waived\nThe most important changes include (1) further definition of\nits immunity from attachment in aid of execution, or from ex-\n\"commercial activity carried on in the United States by a foreign\necution, not withstanding any withdrawal of the waiver which\nstate\" and \"public debt\" in section 1603; (2) clarification of the\nthe bank authority or government may purport to effect except\nlimitations of immunity in tort actions (sec. 1605 in respect of\nin accordance with the terms of the waiver; or\ncounterclaims (sec. 1607), and in case of execution of judgment (sec.\n(3) the property is, or is intended to be, used in connection\n1610) ; and (3) substantial revision of section 1608 relating to service\nwith a military activity and\nof process to conform with article XXII of the Convention on Diplo-\n(A) is of a military character, or\nmatic Relations, signed at Vienna April 18, 1961, and with the Federal\n(B) is under the control of a military authority or de-\nRules of Civil Procedure.\nfense agency.\nIn addition, important new provisions have been added to preserve\nthe jurisdiction of the courts of the United States in cases in which\na suit in admiralty is brought to enforce a maritime lien against a\n[The executive communication from the Departments of State and\nvessel or cargo of a foreign state (sec. 1605 (b)), and to avoid inter-\nJustice is as follows:]\nference with disbursements to foreign states by certain international\nDEPARTMENT OF STATE,\norganizations located in the United States (sec. 1611 (a) These and\nWashington, D.C., October 31, 1975.\nHon. CARL O. ALBERT,\nother changes are discussed in the enclosed analysis.\nThe Departments of State and Justice believe that this revised draft\nSpeaker of the House of Representatives.\nbill is worthy of and will receive the support of the bar and would\nDEAR MR. SPEAKER: The Department of State and Department of\nJustice submit for your consideration and appropriate reference the\n46\n47\nwelcome hearings before the appropriate committees of the House to\nSEC. 4 (a) That title 28, United States Code, is amended by insert-\nconsider this measure as soon as possible.\nThe Office of Management and Budget has advised that there is\ning after chapter 95 the following new chapter:\nno objection to the enactment of this legislation from the standpoint\n\"Chapter 97.-JURISDICTIONAL IMMUNITIES OF FOREIGN STATES\nof the administration's program.\n\"Sec.\nSincerely,\n\"1602. Findings and declaration of purpose.\nROBERT S. INGERSOLL,\n\"1603. Definitions.\nDeputy Secretary of State.\n\"1604. Immunity of a foreign state from jurisdiction.\n\"1605. General exceptions to the jurisdictional immunity of a foreign state.\nHAROLD R. TYLER, Jr.,\n\"1606. Claims involving the public debt.\nDeputy Attorney General.\n\"1607. Counterclaims.\nEnclosures:\n\"1608. Service of process; time to answer; default.\n1. Revised draft bill.\n\"1609. Immunity from attachment and execution of property of a foreign state.\n2. Revised section-by-section analysis.\n\"1610. Exceptions to the immunity from attachment or execution.\n\"1611. Certain types of property immune from execution.\n3. Letter to the President of the Senate, dated January 16, 1973.\n4. Letter to the Speaker of the House, dated January 16, 1973.\n\"§ 1602. Findings and declaration of purpose\n\"The Congress finds that the determination by United States courts\nA BILL To define the jurisdiction of United States courts in suits against for-\nof the claims of foreign states to immunity from the jurisdiction of\neign states, the circumstances in which foreign states are immune from suit\nsuch courts would serve the interests of justice and would protect\nand in which execution may not be levied on their property, and for other\nthe rights of both foreign states and litigants in U.S. courts. Under\npurposes\ninternational law, states are not immune from the jurisdiction of\nBe it enacted by the Senate and House of Representatives of the\nforeign courts in SO far as their commercial activities are concerned,\nUnited States of America in Congress assembled, That this Act may\nand their commercial property may be levied upon for the satisfaction\nbe cited as the \"Foreign Sovereign Immunities Act of 1975\".\nof judgments rendered against them in connection with their com-\nSEC. 2 (a) That chapter 85 of title 28, United States Code, is\nmercial activities. Claims of foreign states to immunity should hence-\namended by inserting immediately before section 1331 the following\nforth be decided by courts of the United States and of the States in\nnew section:\nconformity with the principles set forth in this chapter.\n\"§ 1330. Actions against foreign states\n\"§ 1603. Definitions\n\"(a) The district courts shall have original jurisdiction without\n\"For purposes of this chapter-\nregard to amount in controversy of any nonjury civil action against\n\"(a) a 'foreign state', except as used in sections 1606 and 1608 of\na foreign state as defined in section 1603 (a) of this title as to any\nthis title, includes a political subdivision of a foreign state or an\nclaim for relief in personam with respect to which the foreign state\nagency or instrumentality of a foreign state as defined in subsection\nis not entitled to immunity either uuder sections 1605-1607 of this\n(b).\ntitle or under any applicable international agreement.\n(b) an 'agency and instrumentality of a foreign state' means any\n\"(b) Personal jurisdiction over a foreign state shall exist as to\nentity\nevery claim for relief over which the district courts have jurisdiction\n\"(1) which is a separate legal person, corporate or otherwise,\nunder subsection (a) where service of process has been made under\nand\nsection 1608 of this title.\n\" (2) which is an organ of a foreign state or political subdivision\n'(c) For purposes of subsection (b), an appearance by a foreign\nthereof, or a majority of whose shares or other ownership inter-\nstate does not confer personal jurisdiction with respect to any claim\nest is owned by a foreign state or political subdivision thereof,\nfor relief not arising out of any transaction or occurrence enumerated\nand\nin sections 1605-1607 of this title.\"; and\n(3) which is neither a citizen of a State of the United States\n(b) by inserting in the chapter analysis of that chapter before-\nas defined in sections 1332 (c) and (d) of this title, nor created\n\"1331. Federal question amount in controversy costs.\"\nunder the laws of any third country.\nthe following new item\n\" (c) the 'United States' includes all territory and waters, con-\ntinental or insular, subject to the jurisdiction of the United States.\n\"1330. Actions against foreign states.\"\n(d) a 'commercial activity' means either a regular course of com-\nSEC. 3. That section 1332 of title 28, United States Code, is amended\nmercial conduct or a particular commercial transaction or act. The\nby striking subsections (a) (2) and (3) and substituting in their place\ncommercial character of an activity shall be determined by reference\nthe following:\nto the nature of the course of conduct or particular transaction or act,\n\" (2) citizens of a State and citizens or subjects of a foreign state;\nrather than by reference to its purpose.\n\" (3) citizens of different States and in which citizens or subjects\n\"(e) a 'commercial activity carried on in the United States by a\nof a foreign state are additional parties; and\nforeign state' means commercial activity carried on by such state and\n\"(4) a foreign state, defined in section 1603(a) of this title, as\nhaving substantial contact with the United States.\nplaintiff and citizens of a State or of different States.\"\n48\n49\n\"§ 1604. Immunity of a foreign state from jurisdiction\nsession of the vessel or cargo against which the maritime lien\n\"Subject to existing and future international agreements to which\nis asserted; but such notice shall not be deemed to have been\nthe United States is a party, a foreign state shall be immune from\nserved, nor may it thereafter be served, if the vessel or cargo is\nthe jurisdiction of the courts of the United States and of the States\narrested pursuant to process obtained on behalf of the party\nexcept as provided in sections 1605-1607 of this chapter.\nbringing the suit-unless the party was unaware that the vessel\nor cargo of a foreign state was involved, in which event the\n\"§ 1605. General exceptions to the jurisdictional immunity of a\nservice of process of arrest shall be deemed to constitute valid\nforeign state\nservice of such notice; and\n\"(a) A foreign state shall not be immune from the jurisdiction of\n(2) notice to the foreign state of the commencement of suit\ncourts of the United States or of the States in any case-\nas provided in section 1608 of this title is initiated within ten\n(1) in which the foreign state has waived its immunity either\ndays of the service of process as provided in subsection (b) (1)\nexplicitly or by implication, notwithstanding any withdrawal of\nof this section.\nthe waiver which the foreign state may purport to effect except\n\"Whenever notice is served under subsection (b) (1) of this section,\nin accordance with the terms of the waiver;\nthe maritime lien shall thereafter be deemed to be an in personam\n(2) in which the action is based upon a commercial activity\nclaim against the foreign state which at that time owns the vessel or\ncarried on in the United States by the foreign state: or upon an\ncargo involved; provided that a court may not award judgment\nact performed in the United States in connection with a com-\nagainst the foreign state in an amount greater than the value of the\nmercial activity of the foreign state elsewhere; or upon an act\nvessel or cargo upon which the maritime lien arose, such value to be\noutside the territory of the United States in connection with a\ndetermined as of the time notice is served under subsection (b) (1) of\ncommercial activity of the foreign state elsewhere and that act\nthis section.\ncauses a direct effect in the United States;\n(c) As to any claim for relief with respect to which a foreign state\n(3) in which rights in property taken in violation of inter-\nis not entitled to immunity under this section or under sections 1606\nnational law are in issue and that property or any property ex-\nor 1607 of this chapter, the foreign state shall be liable in the same\nchanged for such property is present in the United States in con-\nmanner and to the same extent as a private individual under like cir-\nnection with a commercial activity carried on in the United\ncumstances; but a foreign state itself, as distinguished from a politi-\nStates by the foreign state; or that property or any property\ncal subdivision thereof or from any agency or instrumentality of a\nexchanged for such property is owned or operated by an agency\nforeign state, shall not be liable in tort for interest prior to judgment\nor instrumentality of the foreign state and that agency or instru-\nor for punitive damages;\nmentality is engaged in a commercial activity in the United\n\"If, however, in any case wherein death was caused, the law of the\nStates;\nplace where the action or omission occurred provides, or has been con-\n\"(4) in which rights in property in the United States acquired\nstrued to provide, for damages only punitive in nature, the foreign\nby succession or gift or rights in immovable property situated\nstate shall be liable for actual or compensatory damages measured by\nin the United States are in issue; or\nthe pecuniary injuries resulting from such death which were incurred\n(5) not otherwise encompassed in paragraph (2) above, in\nby the persons for whose benefit the action was brought.\nwhich money damages are sought against a foreign state for\npersonal injury or death, or damage to or loss of property, occur-\n\"§ 1606. Claims involving the public debt\nring in the United States and caused by the tortious act or omis-\n(a) For purposes of this section, a 'foreign state' shall not include\nsion of that foreign state or of any official or employee of that\na political subdivision of a foreign state or an agency or instrumen-\nforeign state while acting within the scope of his office or em-\ntality of a foreign state.\nployment; except this paragraph shall not apply to\n(b) Notwithstanding the provisions of section 1605 of this chapter,\n\"(A) any claim based upon the exercise or performance\na foreign state shall be immune from the jurisdiction of the courts of\nor the failure to exercise or perform a discretionary function\nthe United States and of the States in any case relating to debt obliga-\nregardless of whether the discretion be abused, or\ntions incurred for general governmental purposes unless—\n(B) any claim arising out of malicious prosecution,\n'(1) the foreign state has waived its immunity explicitly,\nabuse of process, libel, slander, misrepresentation, deceit, or\nnotwithstanding any withdrawal of the waiver which the foreign\ninterference with contract rights.\nstate may purport to effect except in accordance with the terms\n(b) A foreign state shall not be immune from the jurisdiction of\nof the waiver; or\nthe courts of the United States in any case in which a suit in ad-\n\"(2) the case arises under provisions as codified as sections 77a\nmiralty is brought to enforce a maritime lien against a vessel or cargo\nthrough 80b-21 of title 15, United States Code, as amended, or\nof the foreign state, which maritime lien is based upon a commercial\nany other statute which may hereafter be administered by the\nactivity of the foreign state, provided that\nUnited States Securities and Exchange Commission.\n(1) notice of the suit is given by service of a copy of the sum-\n\"§ 1607. Counterclaims\nmons and of the complaint to the person, or his agent, having pos-\n\"In any action brought by a foreign state, or in which a foreign\nstate intervenes, in a court of the United States or of a State, the\n50\n51\nforeign state shall not be accorded immunity with respect to any\nof the Director of Special Consular Services, and the Secretary\ncounterclaim\nshall send one copy through diplomatic channels to the foreign\n\"(a) for which a foreign state would not be entitled to immunity\nstate and shall send a certified copy of the diplomatic note to the\nunder sections 1605 and 1606 of this chapter had such claim been\nclerk of the court in which the action is pending. The Secretary\nbrought in a separate action against the foreign state; or\nshall maintain and publish in the Federal Register a list of foreign\n\"(b) arising out of the transaction or occurrence that is the subject\nstates upon which service may be made under subparagraphs (B)\nmatter of the claim of the foreign state; or\nand (C) of this paragraph, and such list shall be conclusive for\n\"(c) to the extent that the counterclaim does not seek relief exceed-\npurposes of subparagraphs (B) and (C)\ning in amount or differing in kind from that sought by the foreign\n(b) service in the courts of the United States and of the States\nstate.\nshall be made upon an agency or instrumentality of a foreign state:\n\"§ 1608. Service of process; time to answer; default\n\"(1) by delivering a copy of the summons and of the com-\n\"Subject to existing and future international agreements to which\nplaint in accordance with any special arrangement for service be-\nthe United States is a party-\ntween the plaintiff and the agency or instrumentality; or\n\"(a) service in the courts of the United States and of the States\n\"(2) if no special arrangement exists, by delivering a copy of\nshall be made upon a foreign state or political subdivision of a foreign\nthe summons and of the complaint to an officer, a managing or\nstate:\ngeneral agent or to any other agent authorized by appointment or\n\"(1) by delivering a copy of the summons and of the the com-\nby law to receive service of process in the United States; or\n\"(3) if service cannot be made under paragraphs (1) or (2)\nplaint in accordance with any special arrangement for service be-\nof this subsection, and if service is reasonably calculated to give\ntween the plaintiff and the foreign state or political subdivision\nactual notice,\nor\n\"(2) if no special arrangement exists, and if service is reason-\n\"(A) by service of a copy of the summons and of the com-\nably calculated to give actual notice,\nplaint, together with a translation into the official language of\nthe foreign state, as directed by an authority of the foreign\n(A) by service of a copy of the summons and of the com-\nstate or of a political subdivision in response to a letter roga-\nplaint, together with a translation into the official language\ntory or request, or\nof the foreign state, as directed by an authority of the foreign\n(B) by sending a copy of the summons and of the com-\nstate or of the political subdivision in response to a letter\nplaint, together with a translation into the official language\nrogatory or request, or\nof the foreign state, by any form of mail requiring a signed\n(B) by sending a copy of the summons and of the com-\nreceipt, to be addressed and dispatched by the clerk of the\nplaint, together with a translation into the official language\ncourt to the agency or instrumentality to be served, or\nof the foreign state, by any form of mail requiring a signed\n\"(C) as directed by order of the court consistent with the\nreceipt, to be addressed and dispatched by the clerk of the\nlaw of the place where service is to be made;\ncourt to the official in charge of the foreign affairs of the\n\"(c) for the purposes of this section, service of process shall be\nforeign state which is, or whose political subdivision is,\ndeemed to have been made—\nnamed in the complaint; or\n\"(1) in the case of subsections (a) (1) and (b) (1), when de-\n\"(3) if proof of service is not made within 60 days after service\nlivered in accordance with the terms of the special arrangement;\nhas been initiated under paragraphs (1) or (2) of this subsection,\n\"(2) in the case of subsections (a) (2) (A) and (b) (3) (A),\nand if\nwhen delivered as directed by an authority of the foreign state or\n\"(A) the claim for relief arises out of an activity or act in\npolitical subdivision;\nthe United States of a diplomatic or consular representative\n\"(3) in the case of subsections (a) (2) (B) and (b) (3) (B),\nof the foreign state for which the foreign state is not immune\nwhen received abroad by mail, as evidenced by the returned, signed\nfrom jurisdiction under section 1605 of this title, or\nreceipt;\n\"(B) the foreign state uses diplomatic channels for service\n\"(4) in the case of subsection (b) (2), when delivered to an\nupon the United States or any other foreign state, or\nofficer, managing or general agent or appointed agent in the\n(C) the foreign state has not notified the Secretary of\nUnited States;\nState prior to the institution of the proceeding in question\n'(5) in the case of subsection (a) (3), when sent through diplo-\nthat it prefers that service not be made through diplomatic\nmatic channels, as evidenced by a certified copy of the diplomatic\nchannels,\nnote of transmittal;\nby sending two copies of the summons and of the complaint, to-\n\"(6) in the case of subsection (b) (3) (C), when served as di-\ngether with a translation into the official language of the foreign\nrected by order of the court.\nstate, by any form of mail requiring a signed receipt, to be ad-\n\"(d) in any action brought in a court of the United States or of a\ndressed and dispatched by the clerk of the court, to the Secretary\nState, a foreign state, a political subdivision thereof, or an agency or\nof State at Washington, District of Columbia, to the attention\ninstrumentality of a foreign state shall serve an answer or other re-\n52\n53\nsponsive pleading to the complaint or to a cross-claim, or a reply to a\nentered by a court of the United States or of a State after the effective\ncounterclaim, within 60 days after the service of the pleading in which\ndate of this Act, if-\na claim is asserted; and\n\"(1) the agency or instrumentality has waived its immunity\n(e) no judgment by default shall be entered by a court of the\nfrom attachment in aid of execution or from execution either ex-\nUnited States or of a State against a foreign state, a political sub-\nplicity or implicitly, notwithstanding any withdrawal of the\ndivision thereof, or an agency or instrumentality of a foreign state,\nwaiver the agency or instrumentality may purport to effect except\nunless the claimant establishes his claim or right to relief by evidence\nin accordance with the terms of the waiver, or\nsatisfactory to the court. A copy of any such default judgment shall\n\"(2) the judgment relates to a claim for which the agency or\nbe sent to the foreign state or political subdivision in the manner pre-\ninstrumentality is not immune by virtue of sections 1605 (a) (2),\nscribed for service of process in this section.\n(3) or (5), or 1605 (b) of this chapter, regardless of whether the\n\"§ 1609. Immunity from attachment and execution of property\nproperty is or was used for the activity upon which the claim is\nof a foreign state\nbased.\n\"Subject to existing and future international agreements to which\n(c) No attachment or execution referred to in subsections (a) and\nthe United States is a party, the property in the United States of a\n(b) of this section shall be permitted until the court has ordered such\nattachment and execution after having determined that a reasonable\nforeign state shall be immune from attachment and from execution\nexcept as provided in sections 1610 and 1611 of this chapter.\nperiod of time has elapsed following the entry of judgment and the\ngiving of any notice required under section 1608(e) of this chapter.\n\"§ 1610. Exceptions to the immunity from attachment or execution\n\"(d) The property of a foreign state, as defined in section 1603 (a)\n\"(a) The property in the United States of a foreign state, as defined\nof this chapter, used for a commercial activity in the United States,\nin section 1603 (a) of this chapter, used for a commercial activity in\nshall not be immune from attachment prior to the entry of judgment\nthe United States, shall not be immune from attachment in aid of\nin any action brought in a court of the United States or of a State, or\nexecution, or from execution, upon a judgment entered by a court\nprior to the elapse of the period of time provided in subsection (c) of\nof the United States or of a State after the effective date of this Act,\nthis section, if-\nif-\n\"(1) the foreign state has explicitly waived its immunity from\n\"(1) the foreign state has waived its immunity from attachment\nattachment prior to judgment, notwithstanding any withdrawal\nin aid of execution or from execution either explicitly or by im-\nof the waiver the foreign state may purport to effect except in ac-\nplication, notwithstanding any withdrawal of the waiver the for-\ncordance with the terms of the waiver, and\neign state may purport to effect except in accordance with the\n\"(2) the purpose of the attachment is to secure satisfaction of a\nterms of the waiver, or\njudgment that has been or may ultimately be entered against the\n\"(2) the property is or was used for the commercial activity\nforeign state, and not to obtain jurisdiction.\nupon which the claim is based, or\n\"§ 1611. Certain types of property immune from execution\n\"(3) the execution relates to a judgment establishing rights in\nproperty which has been taken in violation of international law\n\"(a) Notwithstanding the provisions of section 1610 of this chapter,\nthe property of those organizations designated by the President as\nor which has been exchanged for property taken in violation of\ninternational law, or\nbeing entitled to enjoy the priviliges, exemptions, and immunities pro-\n\"(4) the execution relates to a judgment establishing rights in\nvided by the International Organizations Immunities Act shall not be\nsubject to attachment or any other judicial process impeding the dis-\nproperty-\nbursement of funds to, or on the order of, a foreign state as the result\n(A) which is acquired by succession or gift, or\nof an action brought in the courts of the United States or of the States.\n(B) which is immovable and situated in the United States,\n(b) Notwithstanding the provisions of section 1610 of this chapter,\nprovided such property is not used for purposes of maintain-\nthe property of a foreign state shall be immune from attachment and\ning a diplomatic or consular mission or the residence of the\nfrom execution, if-\nChief of such mission, or\n\"(1) the property is that of a foreign central bank or monetary\n\"(5) the property consists of any contractual obligation or any\nauthority held for its own account, unless such bank or authority,\nproceeds from such a contractual obligation to indemnify or hold\nor its parent foreign government, has explicitly waived its im-\nharmless the foreign state or its employees under a policy of auto-\nmunity from attachment in aid of execution, or from execution,\nmobile or other liability or casualty insurance covering the claim\nnotwithstanding any withdrawal of the waiver which the bank,\nwhich merged into the judgment.\nauthority or government may purport to effect except in accord-\n(b) In addition to subsection (a), any property in the United\nance with the terms of the waiver; or\nStates of an agency or instrumentality of a foreign state engaged in\n\"(2) the property is, or is intended to be, used in connection with\ncommercial activity in the United States shall not be immune from at-\na military activity and\ntachment in aid of execution, or from execution, upon a judgment\n\"(A) is of a military character, or\n54\n55\n(B) is under the control of a military authority or defense\nagency.\"; and\nresolution was adopted upon recommendation of the Section of Inter-\nnational Law:\n(b) That the analysis of \"Part IV.-Jurisdiction and Venue\" of\nTitle 28, United States Code, is amended by inserting after-\nBe It Resolved, That the American Bar Association supports enact-\nment into law of H.R. 11315 (94th Congress, 1st Session) and S. 3553\n\"95. Customs Court.\",\n(94th Congress, 2nd Session) which would define the jurisdiction of\nthe following new item:\ncourts of the United States in suits against foreign states and the cir-\n\"97. Jurisdictional Immunities of Foreign States.\".\ncumstances in which foreign states are not immune from suit or execu-\nSEC. 5. That section 1391 of title 28, United States Code, is amended\ntion upon their property and\nby adding at the end thereof the following new subsection:\nBe it further resolved, That the American Bar Association urges\n\"(f) A civil action against a foreign state as defined in section\nprompt Congressional hearings on and approval of H.R. 11315 and\nS. 3553.\n1603 (a) of this title may be brought-\nThis resolution is being transmitted for your information and what-\n\"(1) in any judicial district in which a substantial part of the\never action you may deem appropriate.\nevents or omissions giving rise to the claim occurred, or a sub-\nPlease do not hesitate to let us know if you need any further in-\nstantial part of property that is the subject of the action is\nformation, have any questions or whether we can be of any assistance.\nsituated;\nSincerely yours,\n(2) in any judicial district in which the vessel or cargo of a\nHERBERT D. SLEDD,\nforeign state is situated, if the claim is asserted under section\nSecretary.\n1605 (b) of this title;\n\"(3) in any judicial district in which the agency or instru-\nmentality is licensed to do business or is doing business, if the\naction is brought against an agency or instrumentality of a\nforeign state as defined in section 1603 (b) of this title; or\n\"(4) in the United States District Court for the District of\nColumbia if the action is brought against a foreign state or\npolitical subdivision thereof.\nSEC. 6. That section 1441 of title 28, United States Code, is amended\nby adding at the end thereof the following new subsection:\n\"(d) Any civil action brought in a State court against a foreign\nstate as defined in section 1603(a) of this title may be removed by\nthe foreign state to the district court of the United States for the\ndistrict and division embracing the place where such action is pending.\nUpon removal the action shall be tried by the court without jury.\nWhere removal is based upon this subsection, the time limitations of\nsection 1446 (b) of this chapter may be enlarged at any time for cause\nshown.\"\nSEC. 7. If any provision of this Act or the application thereof to\nany foreign state is held invalid, the invalidity does not affect other\nprovisions or applications of the Act which can be given effect with-\nout the invalid provision or application, and to this end the provisions\nof this Act are severable.\nSEC. 8. This Act shall take effect ninety days after the date of its\nenactment.\n[The action of the American Bar Association approving the bill\nH.R. 11315 is described in the following letter:]\nAMERICAN BAR ASSOCIATION,\nChicago, Ill., August 30, 1976.\nHon. PETER W. RODINO, Jr.,\nChairman, Committee on the Judiciary, U.S. House of Representa-\ntives, Washington, D.C.\nDEAR MR. CHAIRMAN: At the meeting of the House of Delegates of\nthe American Bar Association held August 9-11, 1976, the following\nLIBRARY\nH. R. 11315\nUNITED\nRinety-fourth Congress of the United States of America\nAT THE SECOND SESSION\nBegun and held at the City of Washington on Monday, the nineteenth day of January,\none thousand nine hundred and seventy-six\nAn Art\nTo define the jurisdiction of United States courts in suits against foreign states,\nthe circumstances in which foreign states are immune from suit and in which\nexecution may not be levied on their property, and for other purposes.\nBe it enacted by the Senate and House of Representatives of the\nUnited States of America in Congress assembled, That this Act may\nbe cited as the Foreign Sovereign Immunities Act of 1976\".\nSEC. 2. (a) That chapter 85 of title 28, United States Code, is\namended by inserting immediately before section 1331 the following\nnew section:\n\"§ 1330. Actions against foreign states\n(a) The district courts shall have original jurisdiction without\nregard to amount in controversy of any nonjury civil action against a\nforeign state as defined in section 1603 (a) of this title as to any claim\nfor relief in personam with respect to which the foreign state is not\nentitled to immunity either under sections 1605-1607 of this title or\nunder any applicable international agreement.\n(b) Personal jurisdiction over a foreign state shall exist as to every\nclaim for relief over which the district courts have jurisdiction under\nsubsection (a) where service has been made under section 1608 of this\ntitle.\n\" (c) For purposes of subsection (b), an appearance by a foreign\nstate does not confer personal jurisdiction with respect to any claim\nfor relief not arising out of any transaction or occurrence enumerated\nin sections 1605-1607 of this title.\"\n(b) By inserting in the chapter analysis of that chapter before-\n\"1331. Federal question ; amount in controversy costs.\"\nthe following new item\n\"1330. Action against foreign states.\".\nSEC. 3. That section 1332 of title 28, United States Code, is amended\nby striking subsections (a) (2) and (3) and substituting in their place\nthe following:\n(2) citizens of a State and citizens or subjects of a foreign\nstate;\n(3) citizens of different States and in which citizens or sub-\njects of a foreign state are additional parties; and\n\" (4) a foreign state, defined in section 1603(a) of this title, as\nplaintiff and citizens of a State or of different States.\".\nSEC. 4. (a) That title 28, United States Code, is amended by insert-\ning after chapter 95 the following new chapter:\n\"Chapter 97.-JURISDICTIONAL IMMUNITIES OF FOREIGN\nSTATES\n\"Sec.\n\"1602. Findings and declaration of purpose.\n\"1603. Definitions.\n\"1604. Immunity of a foreign state from jurisdiction.\n\"1605. General exceptions to the jurisdictional immunity of a foreign state.\n\"1606. Extent of liability.\nH. R. 11315-2\n\"1607. Counterclaims.\n\"1608. Service; time to answer default.\n\"1609. Immunity from attachment and execution of property of a foreign state.\n\"1610. Exceptions to the immunity from attachment or execution.\n\"1611. Certain types of property immune from execution.\n\"§ 1602. Findings and declaration of purpose\n\"The Congress finds that the determination by United States courts\nof the claims of foreign states to immunity from the jurisdiction of\nsuch courts would serve the interests of justice and would protect the\nrights of both foreign states and litigants in United States courts.\nUnder international law, states are not immune from the jurisdiction\nof foreign courts insofar as their commercial activities are concerned,\nand their commercial property may be levied upon for the satisfaction\nof judgments rendered against them in connection with their commer-\ncial activities. Claims of foreign states to immunity should henceforth\nbe decided by courts of the United States and of the States in con-\nformity with the principles set forth in this chapter.\n\"§ 1603. Definitions\n\"For purposes of this chapter-\n\"(a) A 'foreign state', except as used in section 1608 of this title,\nincludes a political subdivision of a foreign state or an agency or\ninstrumentality of a foreign state as defined in subsection (b).\n\"(b) An 'agency or instrumentality of a foreign state' means\nany entity--\n\"(1) which is a separate legal person, corporate or other-\nwise, and\n\"(2) which is an organ of a foreign state or political\nsubdivision thereof, or a majority of whose shares or other\nownership interest is owned by a foreign state or political\nsubdivision thereof, and\n\"(3) which is neither a citizen of a State of the United\nStates as defined in section 1332 (c) and (d) of this title, nor\ncreated under the laws of any third country.\n\" (c) The 'United States' includes all territory and waters, con-\ntinental or insular, subject to the jurisdiction of the United States.\n(d) A 'commercial activity' means either a regular course of\ncommercial conduct or a particular commercial transaction or act.\nThe commercial character of an activity shall be determined by\nreference to the nature of the course of conduct or particular\ntransaction or act, rather than by reference to its purpose.\n(e) A 'commercial activity carried on in the United States by\na foreign state' means commercial activity carried on by such state\nand having substantial contact with the United States.\n\"§ 1604. Immunity of a foreign state from jurisdiction\n\"Subject to existing international agreements to which the United\nStates is a party at the time of enactment of this Act a foreign state\nshall be immune from the jurisdiction of the courts of the United\nStates and of the States except as provided in sections 1605 to 1607 of\nthis chapter.\n\"§ 1605. General exceptions to the jurisdictional immunity of a\nforeign state\n\"(a) A foreign state shall not be immune from the jurisdiction of\ncourts of the United States or of the States in any case-\n\"(1) in which the foreign state has waived its immunity either\nexplicitly or by implication, notwithstanding any withdrawal of\nH. R. 11315-3\nthe waiver which the foreign state may purport to effect except\nin accordance with the terms of the waiver;\n(2) in which the action is based upon a commercial activity\ncarried on in the United States by the foreign state; or upon an\nact performed in the United States in connection with a commer-\ncial activity of the foreign state elsewhere; or upon an act outside\nthe territory of the United States in connection with a commercial\nactivity of the foreign state elsewhere and that act causes a direct\neffect in the United States;\n(3) in which rights in property taken in violation of inter-\nnational law are in issue and that property or any property\nexchanged for such property is present in the United States in\nconnection with a commercial activity carried on in the United\nStates by the foreign state; or that property or any property\nexchanged for such property is owned or operated by an agency or\ninstrumentality of the foreign state and that agency or instru-\nmentality is engaged in a commercial activity in the United States;\n\"(4) in which rights in property in the United States acquired\nby succession or gift or rights in immovable property situated in\nthe United States are in issue; or\n((5) not otherwise encompassed in paragraph (2) above, in\nwhich money damages are sought against a foreign state for\npersonal injury or death, or damage to or loss of property,\noccurring in the United States and caused by the tortious act or\nomission of that foreign state or of any official or employee of that\nforeign state while acting within the scope of his office or employ-\nment; except this paragraph shall not apply to—\n\"(A) any claim based upon the exercise or performance or\nthe failure to exercise or perform a discretionary function\nregardless of whether the discretion be abused, or\n\" (B) any claim arising out of malicious prosecution, abuse\nof process, libel, slander, misrepresentation, deceit, or inter-\nference with contract rights.\n(b) A foreign state shall not be immune from the jurisdiction of\nthe courts of the United States in any case in which a suit in admiralty\nis brought to enforce a maritime lien against a vessel or cargo of the\nforeign state, which maritime lien is based upon a commercial activity\nof the foreign state: Provided, That-\n\"(1) notice of the suit is given by delivery of a copy of the\nsummons and of the complaint to the person, or his agent, having\npossession of the vessel or cargo against which the maritime lien\nis asserted; but such notice shall not be deemed to have been\ndelivered, nor may it thereafter be delivered, if the vessel or cargo\nis arrested pursuant to process obtained on behalf of the party\nbringing the suit-unless the party was unaware that the vessel or\ncargo of a foreign state was involved, in which event the service\nof process of arrest shall be deemed to constitute valid delivery of\nsuch notice; and\n\"(2) notice to the foreign state of the commencement of suit\nas provided in section 1608 of this title is initiated within ten days\neither of the delivery of notice as provided in subsection (b) (1)\nof this section or, in the case of a party who was unaware that the\nvessel or cargo of a foreign state was involved, of the date such\nparty determined the existence of the foreign state's interest.\nWhenever notice is delivered under subsection (b) (1) of this section,\nthe maritime lien shall thereafter be deemed to be an in personam\nH. R. 11315-4\nclaim against the foreign state which at that time owns the vessel or\ncargo involved: Provided, That a court may not award judgment\nagainst the foreign state in an amount greater than the value of the\nvessel or cargo upon which the maritime lien arose, such value to be\ndetermined as of the time notice is served under subsection (b) (1) of\nthis section.\n\"§ 1606. Extent of liability\n\"As to any claim for relief with respect to which a foreign state is\nnot entitled to immunity under section 1605 or 1607 of this chapter,\nthe foreign state shall be liable in the same manner and to the same\nextent as a private individual under like circumstances; but a foreign\nstate except for an agency or instrumentality thereof shall not be\nliable for punitive damages; if, however, in any case wherein death\nwas caused, the law of the place where the action or omission occurred\nprovides, or has been construed to provide, for damages only punitive\nin nature, the foreign state shall be liable for actual or compensatory\ndamages measured by the pecuniary injuries resulting from such death\nwhich were incurred by the persons for whose benefit the action was\nbrought.\n\"§ 1607. Counterclaims\n\"In any action brought by a foreign state, or in which a foreign state\nintervenes, in a court of the United States or of a State, the foreign\nstate shall not be accorded immunity with respect to any\ncounterclaim-\n\"(a) for which a foreign state would not be entitled to\nimmunity under section 1605 of this chapter had such claim been\nbrought in a separate action against the foreign state; or\n\"(b) arising out of the transaction or occurrence that is the\nsubject matter of the claim of the foreign state; or\n\"(c) to the extent that the counterclaim does not seek relief\nexceeding in amount or differing in kind from that sought by the\nforeign state.\n\"§ 1608. Service; time to answer; default\n\"(a) Service in the courts of the United States and of the States\nshall be made upon a foreign state or political subdivision of a for-\neign state:\n\"(1) by delivery of a copy of the summons and complaint in\naccordance with any special arrangement for service between the\nplaintiff and the foreign state or political subdivision; or\n\"(2) if no special arrangement exists, by delivery of a copy\nof the summons and complaint in accordance with an applicable\ninternational convention on service of judicial documents; or\n\"(3) if service cannot be made under paragraphs (1) or (2),\nby sending a copy of the summons and complaint and a notice of\nsuit, together with a translation of each into the official language\nof the foreign state, by any form of mail requiring a signed\nreceipt, to be addressed and dispatched by the clerk of the court\nto the head of the ministry of foreign affairs of the foreign state\nconcerned, or\n\"(4) if service cannot be made within 30 days under para-\ngraph (3), by sending two copies of the summons and complaint\nand a notice of suit, together with a translation of each into the\nofficial language of the foreign state, by any form of mail requir-\ning a signed receipt, to be addressed and dispatched by the clerk\nof the court to the Secretary of State in Washington, District of\nH. R. 11315-5\nColumbia, to the attention of the Director of Special Consular\nServices-and the Secretary shall transmit one copy of the papers\nthrough diplomatic channels to the foreign state and shall send\nto the clerk of the court a certified copy of the diplomatic note\nindicating when the papers were transmitted.\nAs used in this subsection, a 'notice of suit' shall mean a notice\naddressed to a foreign state and in a form prescribed by the Secretary\nof State by regulation.\n(b) Service in the courts of the United States and of the States\nshall be made upon an agency or instrumentality of a foreign state:\n\" (1) by delivery of a copy of the summons and complaint in\naccordance with any special arrangement for service between the\nplaintiff and the agency or instrumentality or\n'(2) if no special arrangement exists, by delivery of a copy\nof the summons and complaint either to an officer, a managing or\ngeneral agent, or to any other agent authorized by appointment\nor by law to receive service of process in the United States; or\nin accordance with an applicable international convention on\nservice of judicial documents; or\n\"(3) if service cannot be made under paragraphs (1) or (2),\nand if reasonably calculated to give actual notice, by delivery of\na copy of the summons and complaint, together with a translation\nof each into the official language of the foreign state-\n((A) as directed by an authority of the foreign state or\npolitical subdivision in response to a letter rogatory or\nrequest or\n(B) by any form of mail requiring a signed receipt, to\nbe addressed and dispatched by the clerk of the court to the\nagency or instrumentality to be served, or\n(C) as directed by order of the court consistent with the\nlaw of the place where service is to be made.\n(c) Service shall be deemed to have been made—\n\"(1) in the case of service under subsection (a) (4), as of the\ndate of transmittal indicated in the certified copy of the diplo-\nmatic note; and\n\"(2) in any other case under this section, as of the date of\nreceipt indicated in the certification, signed and returned postal\nreceipt, or other proof of service applicable to the method of\nservice employed.\n(d) In any action brought in a court of the United States or of\na State, a foreign state, a political subdivision thereof, or an agency\nor instrumentality of a foreign state shall serve an answer or other\nresponsive pleading to the complaint within sixty days after service\nhas been made under this section.\n\"(e) No judgment by default shall be entered by a court of the\nUnited States or of a State against a foreign state, a political sub-\ndivision thereof, or an agency or instrumentality of a foreign state,\nunless the claimant establishes his claim or right to relief by evidence\nsatisfactory to the court. A copy of any such default judgment shall\nbe sent to the foreign state or political subdivision in the manner\nprescribed for service in this section.\n\"§ 1609. Immunity from attachment and execution of property of\na foreign state\n\"Subject to existing international agreements to which the United\nStates is a party at the time of enactment of this Act the property\nH. R. 11315-6\nin the United States of a foreign state shall be immune from attach-\nment arrest and execution except as provided in sections 1610 and\n1611 of this chapter.\n\"§ 1610. Exceptions to the immunity from attachment or execution\n(a) The property in the United States of a foreign state, as defined\nin section 1603 (a) of this chapter, used for a commercial activity in\nthe United States, shall not be immune from attachment in aid of\nexecution, or from execution, upon a judgment entered by a court\nof the United States or of a State after the effective date of this\nAct, if-\n(1) the foreign state has waived its immunity from attach-\nment in aid of execution or from execution either explicitly or\nby implication, notwithstanding any withdrawal of the waiver\nthe foreign state may purport to effect except in accordance with\nthe terms of the waiver, or\n\" (2) the property is or was used for the commercial activity\nupon which the claim is based, or\n(3) the execution relates to a judgment establishing rights in\nproperty which has been taken in violation of international law\nor which has been exchanged for property taken in violation of\ninternational law, or\n(4) the execution relates to a judgment establishing rights in\nproperty-\n(A) which is acquired by succession or gift, or\n'(B) which is immovable and situated in the United\nStates: Provided. That such property is not used for pur-\nposes of maintaining a diplomatic or consular mission or\nthe residence of the Chief of such mission, or\n\"(5) the property consists of any contractual obligation or\nany proceeds from such a contractual obligation to indemnify\nor hold harmless the foreign state or its employees under a policy\nof automobile or other liability or casualty insurance covering\nthe claim which merged into the judgment.\n(b) In addition to subsection (a), any property in the United\nStates of an agency or instrumentality of a foreign state engaged in\ncommercial activity in the United States shall not be immune from\nattachment in aid of execution, or from execution, upon a judgment\nentered by a court of the United States or of a State after the effective\ndate of this Act, if-\n\"(1) the agency or instrumentality has waived its immunity\nfrom attachment in aid of execution or from execution either\nexplicitly or implicitly, notwithstanding any withdrawal of the\nwaiver the agency or instrumentality may purport to effect except\nin accordance with the terms of the waiver, or\n(2) the judgment relates to a claim for which the agency or\ninstrumentality is not immune by virtue of section 1605 (a) (2),\n(3), or (5), or 1605(b) of this chapter, regardless of whether\nthe property is or was used for the activity upon which the claim\nis based.\n(c) No attachment or execution referred to in subsections (a)\nand (b) of this section shall be permitted until the court has ordered\nsuch attachment and execution after having determined that a rea-\nsonable period of time has elapsed following the entry of judgment\nand the giving of any notice required under section 1608(e) of this\nchapter.\nH. R. 11315-7\n\"(d) The property of a foreign state, as defined in section 1603 (a)\nof this chapter, used for a commercial activity in the United States,\nshall not be immune from attachment prior to the entry of judgment\nin any action brought in a court of the United States or of a State,\nor prior to the elapse of the period of time provided in subsection (c)\nof this section, if-\n(1) the foreign state has explicitly waived its immunity from\nattachment prior to judgment, notwithstanding any withdrawal\nof the waiver the foreign state may purport to effect except in\naccordance with the terms of the waiver, and\n\"(2) the purpose of the attachment is to secure satisfaction of\na judgment that has been or may ultimately be entered against\nthe foreign state, and not to obtain jurisdiction.\n\"§ 1611. Certain types of property immune from execution\n\"(a) Notwithstanding the provisions of section 1610 of this chapter,\nthe property of those organizations designated by the President as\nbeing entitled to enjoy the privileges, exemptions, and immunities pro-\nvided by the International Organizations Immunities Act shall not\nbe subject to attachment or any other judicial process impeding the\ndisbursement of funds to, or on the order of, a foreign state as the\nresult of an action brought in the courts of the United States or of\nthe States.\n(b) Notwithstanding the provisions of section 1610 of this chap-\nter, the property of a foreign state shall be immune from attachment\nand from execution, if-\n\"(1) the property is that of a foreign central bank or monetary\nauthority held for its own account, unless such bank or authority,\nor its parent foreign government, has explicitly waived its\nimmunity from attachment in aid of execution, or from execution,\nnotwithstanding any withdrawal of the waiver which the bank,\nauthority or government may purport to effect except in accord-\nance with the terms of the waiver; or\n\"(2) the property is, or is intended to be, used in connection\nwith a military activity and\n\"(A) is of a military character, or\n(B) is under the control of a military authority or\ndefense agency.\"\n(b) That the analysis of \"PART IV.-JURISDICTION AND VENUE\" of title\n28, United States Code, is amended by inserting after—\n\"95. Customs Court.\",\nthe following new item:\n\"97. Jurisdictional Immunities of Foreign States.\".\nSEC. 5. That section 1391 of title 28, United States Code, is amended\nby adding at the end thereof the following new subsection:\n(f) A civil action against a foreign state as defined in section\n1603 (a) of this title may be brought-\n\"(1) in any judicial district in which a substantial part of the\nevents or omissions giving rise to the claim occurred, or a sub-\nstantial part of property that is the subject of the action is\nsituated;\n\"(2) in any judicial district in which the vessel or cargo of a\nforeign state is situated, if the claim is asserted under section\n1605 (b) of this title;\nH. R. 11315-8\n\"(3) in any judicial district in which the agency or instru-\nmentality is licensed to do business or is doing business, if the\naction is brought against an agency or instrumentality of a foreign\nstate as defined in section 1603 (b) of this title; or\n\"(4) in the United States District Court for the District of\nColumbia if the action is brought against a foreign state or politi-\ncal subdivision thereof.\".\nSEC. 6. That section 1441 of title 28, United States Code, is amended\nby adding at the end thereof the following new subsection\n\"(d) Any civil action brought in a State court against a foreign\nstate as defined in section 1603(a) of this title may be removed by\nthe foreign state to the district court of the United States for the dis-\ntrict and division embracing the place where such action is pending.\nUpon removal the action shall be tried by the court without jury.\nWhere removal is based upon this subsection, the time limitations of\nsection 1446 (b) of this chapter may be enlarged at any time for cause\nshown.\".\nSEC. 7. If any provision of this Act or the application thereof to any\nforeign state is held invalid, the invalidity does not affect other pro-\nvisions or applications of the Act which can be given effect without\nthe invalid provision or application, and to this end the provisions of\nthis Act are severable.\nSEC. 8. This Act shall take effect ninety days after the date of its\nenactment.\nSpeaker of the House of Representatives.\nVice President of the United States and\nPresident of the Senate.\nFOR IMMEDIATE RELEASE\nOCTOBER 22, 1976\nOffice of the White House Press Secretary\nTHE WHITE HOUSE\nMEMORANDUM OF DISAPPROVAL\nI am withholding my approval from S. 3553, the Foreign\nSovereign Immunities Act of 1976, for technical reasons.\nIn its haste to adjourn, the Congress passed identical\nSenate and House bills on this subject. At the time the\nSenate passed the House bill, H.R. 11315, it attempted to\nvacate its earlier passage of S. 3553 but was unable to do\nso because it had left the Senate's jurisdiction. The House,\nunaware that the Senate had passed the House bill, also passed\nthe Senate bill.\nIn view of the Senate's action in attempting to vacate\nits passage of S. 3553, there is doubt that S. 3553 has been\nproperly enrolled, and therefore I am separately approving\nH.R. 11315 and must withhold my approval from S. 3553.\nGERALD R. FORD\nTHE WHITE HOUSE,\nOctober 21, 1976\n####\nFOR IMMEDIATE RELEASE\nOCTOBER 22, 1976\nOffice of the White House Press Secretary\nTHE WHITE HOUSE\nSTATEMENT BY THE PRESIDENT\nIt is with great satisfaction that I announce that\n. I have signed H.R. 11315, the Foreign Sovereign Immunities\nAct of 1976. This legislation, proposed by my Administration,\ncontinues the longstanding commitment of the United States\nto seek a stable international order under the law.\nIt has often been said that the development of an\ninternational legal order occurs only through small but\ncarefully considered steps. The Foreign Sovereign\nImmunities Act of 1976 which I sign today is such a step.\nThis legislation will enable American citizens and\nforeign governments alike to ascertain when a foreign state\ncan be sued in our courts. In this modern world where\nprivate citizens increasingly come into contact with foreign\ngovernment activities, it is important to know when the\ncourts are available to redress legal grievances.\nThis statute will also make it easier for our citizens\nand foreign governments to turn to the courts to resolve\nordinary legal disputes. In this respect, the Foreign\nSovereign Immunities Act carries forward a modern and\nenlightened trend in international law. And it makes this\ndevelopment in the law available to all American citizens.\n# # #"
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