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1976/10/23 S3553 Foreign Sovereign Immunities Act of 1976 (vetoed)
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1976/10/23 S3553 Foreign Sovereign Immunities Act of 1976 (vetoed)
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The original documents are located in Box 70, folder "10/23/76 S3553 Foreign Sovereign
Immunities Act of 1976 (vetoed)" of the White House Records Office: Legislation Case
Files at the Gerald R. Ford Presidential Library
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Exact duplicates within this folder were not digitized.
Rocket VET0E/23(76)
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON. D.C. 20503
(EFF. (MEMO
OCT 18 1976
on 22(76)
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bills
(1) H.R. 11315 - Foreign Sovereign Immunities
Act of 1976
Sponsor - Rep. Rodino (D) New Jersey and
Rep. Hutchinson (R) Michigan
(2) S. 3553
Foreign Sovereign Immunities
Act of 1976
Sponsor - Sen. Hruska (R) Nebraska,
Sen. Eastland (D) Mississippi, and
Sen. Scott (R) Pennsylvania
Last Day for Action
October 23, 1976 - Saturday
GERALD FORD LIBRARY
Purpose
Defines the jurisdiction of United States courts in suits
against foreign states; defines the jurisdictional immunities
of a foreign state; and authorizes removal of suits brought
in State courts against foreign states.
Agency Recommendations
Office of Management and Budget
Approval of H.R. 11315
Disapproval of S. 3553
(Memorandum of disapproval
attached)
Department of State
Approval of H.R. 11315
(Signing statement
attached)
Department of Justice
Approval of H.R. 11315
Administrative Office of the
United States Courts
No objection to either bill
Department of Commerce
No objection to either bill,
but defers to Justice
Securities and Exchange Commission
No recommendation received
Digitized from Box 70 of the White House Records Office Legislation Case Files at the Gerald R. Ford Presidential Library
2
Discussion
The broad purposes of this legislation are to facilitate
litigation against foreign states and to minimize
irritations in foreign relations arising out of such
litigation.
Currently, the incompleteness of the law of sovereign
immunity in the United States has created a substantive
uncertainty for the courts in cases involving foreign
states. This, coupled with the growth in trade between
the United States and foreign countries, makes it increasingly
important to provide precise statutory guidance to American
courts to adjudicate disputes between private parties and
foreign states arising out of their commercial activities
and other activities which are of a private law nature.
Accordingly, the bills would establish exclusive standards
to be used in resolving questions of sovereign immunity
raised by foreign states before Federal and State
courts. The legislation is intended to preempt any other
Federal or State law, excluding applicable international
agreements, and to bring U.S. practice into conformity
with that of most other nations. It would accomplish this
purpose by leaving sovereign immunity decisions exclusively
to the courts, thereby discontinuing the current practice
of judicial deference to "suggestions of immunity" from
the Executive branch. (i.e., when the Department of State
receives requests from foreign states for sovereign.
immunity and determines whether to request the Department
of Justice to suggest the defense in Federal courts, it
adheres to the so-called "restrictive theory of immunity."
Under that theory, immunity is only granted in suits arising
out of a foreign state's governmental acts and is not
extended to suits arising out of its commercial or
proprietary acts, or other acts affecting private persons.)
This legislation is the product of a joint endeavor by the
Departments of State and Justice, which began almost a
decade ago to modernize the law of foreign state immunity
in the United States. It reflects several years of
consultation with the organized bar and the academic
community. The bill is substantially similar to legislation
submitted by the Departments of State and Justice to the
Congress.
FORD i LIBRARY GERALD
3
In its haste to adjourn, the Congress passed identical
Senate and House bills. At the time the Senate passed
H.R. 11315, it attempted to vacate its earlier passage of
S. 3553 but was unable to do so because it had left the
Senate's jurisdiction. The House, unaware that the Senate
had passed the House bill, also passed the Senate bill.
Summary of H.R. 11315 and S. 3553
The legislation consists of three principal parts:
(1) definition of the jurisdiction of the United States
courts in actions against foreign states; (2) codification
with judicial standards of the so-called "restrictive
theory of sovereign immunity", i.e., the jurisdictional
immunities of foreign states; and (3) removal of suits
brought in State courts against foreign states to Federal
courts.
Original Jurisdiction of Federal Courts in Actions Against
Foreign States
Original jurisdiction, both subject matter and personal,
would be established in the U.S. District Court in any
claim, without regard to the amount in controversy, against
any foreign state or its entity when either that foreign
state has waived immunity in the case or the case is based
on its commercial or property transactions in the U.S.
Jurisdiction could not be established when it would contra-
vene existing treaties or other international agreements
preserving immunity.
Jurisdictional Immunities of Foreign States
--- Codification of the restrictive theory of sovereign immunity.
The so-called "restrictive theory of sovereign immunity".
that the sovereign immunity of foreign states should be
limited to cases involving acts of a foreign state which
are governmental in nature, as opposed to acts which are
either commercial in nature or those acts which private
persons normally perform--would be refined and codified.
As law it would be applicable to the foreign state, a
political subdivision of the state, or an agency or
instrumentality of the foreign state having status as a
FORD i LIBRARY GERALD
4
legal entity or separate person (e.g., a trading corporation,
shipping line, export associations, etc.). Consequently,
the engagement of foreign governments in a non-governmental
activity, which is either commercial or private in nature,
would constitute an implied waiver of sovereign immunity
with respect to that activity and it would be subject to
suit in a Federal court.
In this regard, specific categories of exceptions to
jurisdictional immunity would be established.
1. Waiver
A foreign state may waive immunity, either explicitly
by renouncing its immunity by treaty, implicitly by
agreeing to arbitration of a case under the laws of
another country, or by filing a responsive pleading
in a suit. However, mere appearance by the foreign
state in another action unrelated would not confer
personal jurisdiction or constitute a waiver of
immunity. In transactions in which a foreign state
has agreed to waiver of sovereign immunity, that
waiver could only be withdrawn in a manner consistent
with the expression of waiver in the original agreement.
2. Commercial Activity
"Commercial activity" includes the broad spectrum of
activity from a singular commercial transaction to the
regular conduct of a commercial enterprise. Under this
definition, the fact that goods or services are to be
procured via contract for public purposes would be
irrelevant; the commercial nature of the transaction
itself establishes the basis for the court's
jurisdiction. In the final analysis, the court would make
the determination whether or not an activity of a foreign
state is commercial or public, thereby requiring the
foreign state to plead sovereign immunity as an
affirmative defense, if the case does not relate to
either a treaty or other international agreement
maintaining the immunity of that foreign state or
to debt obligations incurred for general public
purposes.
FORD i LIBRARY 9ERALD
5
3. Ownership or Expropriation of Property
Immunity would be denied in cases involving a foreign
government's ownership of real or "immovable" property
located in the U.S. or when property owned by an
entity of the U.S. and located in the foreign country
has been seized or nationalized without compensation
as required by international law.
4. Non-commercial Torts
Immunity would be denied a foreign state in all tort
claims for monetary damages caused by the tortious
acts or omissions of a foreign state or its officials
or employees acting within the scope of their
authority and occurring within U.S. jurisdiction,
unless specifically excepted in statute or treaty.
Immunity of foreign diplomats or consular representa-
tives, themselves, would be unaffected.
5. Maritime Liens
Immunity would be denied to foreign states in cases
where a suit in admiralty is brought to enforce
a maritime lien based upon a commercial activity of
that foreign state or its vessels.
Thus, the liability of a foreign state or its entity in
cases where immunity is denied would be identical to that
of a private individual defendant. The only exception
would be that the foreign state cannot be held liable for
interest on the monetary value of the claim prior to
judgment or for punitive damages.
-- Extent of liability.
If a foreign state, political subdivision, agency, or
instrumentality is not entitled to immunity from jurisdiction,
it would be subject to the same liability as a private party
under like circumstances. However, the tort liability of the
foreign state or its political subdivision would not extend
to punitive damages.
FORD & LIBRARY 9ERALD
6
-- Counterclaims
Foreign states would be denied immunity in certain instances
when a counterclaim is brought against the foreign state
which has brought an action or intervened in an action
in a Federal or State court.
--- Service of Process
A hierarchy of procedures for service of process would be
established by the bill. Sequentially, these methods for
service of process are:
1. A special agreement between plaintiff and defendant
foreign state would be made on the preferred procedure
for service of process.
2. If no special arrangement exists, service would be
accomplished: (a) in accordance with an applicable
international convention on service of judical documents;
(b) by the provision of a letter rogatory (letter from
the U.S. Court to the court of the foreign state requesting
the foreign court to assist the U.S. court) or request
for ultimate service in a foreign country as directed
by the authority of that state (this is a preliminary
administrative step leading to service of process in a
foreign country); or (c) by registered mail to the foreign
minister or official in charge of the foreign affairs
of the foreign state.
3. If 30 days have passed without proof that service was
made by any of the preceding methods, service would be
made through diplomatic channels as a last resort.
Service on foreign agencies or instrumentalities (e.g.,
foreign companies, trading associations, etc.) would be made
in a manner similar to the hierarchy of methods outlined
above, except diplomatic channels would not be used. In
addition, service could also be made in accordance with the
law and procedures of the foreign state.
No judgment of default could be entered against a foreign
state or its entities unless sixty days have elapsed and
the court determines that the claimant has substantially
proved the validity of the claim with evidence.
GERALD FORD LIBRARY
7
-- Attachment and Execution of Property
The legislation would affirm that the property of a foreign
state is generally immune from attachment and execution.
However, in addition to explicit or implied waiver, other
exceptions to immunity would be established when property
is: (1) used for commercial purposes in the U.S. and upon
which the claim is based; (2) taken in violation of inter-
national law; (3) acquired by succession or gift; (4) immovable;
or (5) under a contractual obligation.
-- Property of International Organizations, Central Bank
Funds and Military Property
Property held by international organizations, which have been
designated by the President pursuant to the International
Organizations Immunities Act, would not be subject to attach-
ment and execution, e.g., the International Monetary Fund
and the World Bank. In addition, funds of a foreign central
bank deposited in the U.S. for that bank's "own account"
and military property would also be similarly immune.
-- Venue
Venue would be established in the judicial district:
(1) where the cause of action substantially occurred;
(2) for suits in admiralty to enforce a maritime lien
against a vessel or cargo of a foreign state where the
vessel is located; (3) where the agency or instrumentality
is licensed to do business or doing business; and (4) for
the District of Columbia.
Removal of Cases from State Courts
Suits in State courts with a party foreign state would be
removed to the U.S. District Court at the discretion of
the foreign state, even when there are multiple defendants
of which one or more may be a citizen of the State in which
the action was brought. This provision responds to the
potential sensitivity of actions against foreign states
by ensuring for them the opportunity to litigate their
R.
casesin the U.S. District Court. Consequently, a foreign
FORD
state has the option of litigating under Federal law
rather than being subjected to the differing laws and
GERA
judicial procedures of the States.
Finally, the legislation would take effect 90 days after
enactment.
8
Recommendation
In its attached views letter, the Department of Justice
advises that "in view of the Senate's action vacating
its passage of S. 3553, there is most serious doubt that
S. 3553 has been properly enrolled, and we recommend that
no action be taken on S. 3553." We concur and recommend
that you approve H.R. 11315 and take no action on S. 3553.
A proposed signing statement is enclosed with the State
views letter for your consideration. We have also
prepared for your consideration a brief memorandum of
disapproval which explains why no action is being taken on
S. 3553.
Paul Paul H. O'Neill Chein
Acting Director
Enclosures
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
Johnsty 14-19-76:00 q.m.
OCT 18 1976
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bills
(1) H.R. 11315 - Foreign Sovereign Immunities
Act of 1976
Sponsor - Rep. Rodino (D) New Jersey and
Rep. Hutchinson (R) Michigan
(2) S. 3553 - Foreign Sovereign Immunities
Act of 1976
Sponsor - Sen. Hruska (R) Nebraska,
Sen. Eastland (D) Mississippi, and
Sen. Scott (R) Pennsylvania
Last Day for Action
October 23, 1976 - Saturday
FORD i GERALD LIBRARY
Purpose
Defines the jurisdiction of United States courts in suits
against foreign states; defines the jurisdictional immunities
of a foreign state; and authorizes removal of suits brought
in State courts against foreign states.
Agency Recommendations
Office of Management and Budget
Approval of H.R. 11315
Disapproval of S. 3553
(Memorandum of disapproval
attached)
Department of State
Approval of H.R. 11315
(Signing statement
attached)
Department of Justice
Approval of H.R. 11315
Administrative Office of the
United States Courts
No objection to either bill
Department of Commerce
No objection to either bill,
but defers to Justice
Securities and Exchange Commission
No recommendation received
Attached document was not scanned because it is duplicated elsewhere in the document
MEMORANDUM OF DISAPPROVAL
I am withholding my approval from S. 3553, the Foreign
Sovereign Immunities Act of 1976, for technical reasons.
In its haste to adjourn, the Congress passed identical
Senate and House bills on this subject. At the time the
Senate passed the House bill, H.R. 11315, it attempted
to vacate its earlier passage of S. 3553 but was unable
to do so because it had left the Senate's jurisdiction.
The House, unaware that the Senate had passed the House
bill, also passed the Senate bill.
In view of the Senate's action in attempting to vacate
its passage of S. 3553, there is doubt that S. 3553 has
been properly enrolled, and therefore I am separately
approving H.R. 11315 and must withhold my approval from
S. 3553.
THE WHITE HOUSE
October
, 1976
MEMORANDUM OF DISAPPROVAL
I am withholding my approval from S. 3553, the Foreign
Sovereign Immunities Act of 1976, for technical reasons.
In its haste to adjourn, the Congress passed identical
Senate and House bills on this subject. At the time the
Senate passed the House bill, H.R. 11315, it attempted
to vacate its earlier passage of S. 3553 but was unable
to do so because it had left the Senate's jurisdiction.
The House, unaware that the Senate had passed the House
bill, also passed the Senate bill.
In view of the Senate's action in attempting to vacate
its passage of S. 3553, there is doubt that S. 3553 has
been properly enrolled, and therefore I am separately
approving H.R. 11315 and must withhold my approval from
S. 3553.
THE WHITE HOUSE
October , 1976
MEMORANDUM OF DISAPPROVAL
I am withholding my approval from S. 3553, the Foreign
Sovereign Immunities Act of 1976, for technical reasons.
In its haste to adjourn, the Congress passed identical
Senate and House bills on this subject. At the time the
Senate passed the House bill, H.R. 11315, it attempted to
vacate its earlier passage of S. 3553 but was unable to do
so because it had left the Senate's jurisdiction. The House,
unaware that the Senate had passed the House bill, also passed
the Senate bill.
In view of the Senate's action in attempting to vacate
its passage of S. 3553, there is doubt that S. 3553 has been
properly enrolled, and therefore I am separately approving
H.R. 11315 and must withhold my approval from S. 3553.
THE WHITE HOUSE,
GERALD FORD LIBRARY
MEMORANDUM OF DISAPPROVAL
I am withholding my approval from S. 3553, the Foreign
Sovereign Immunities Act of 1976, for technical reasons.
In its haste to adjourn, the Congress passed identical
Senate and House bills on this subject. At the time the
Senate passed the House bill, H.R. 11315, it attempted to
vacate its earlier passage of S. 3553 but was unable to do
so because it had left the Senate's jurisdiction. The House,
unaware that the Senate had passed the House bill, also passed
the Senate bill.
In view of the Senate's action in attempting to vacate
its passage of S. 3553, there is doubt that S. 3553 has been
properly enrolled, and therefore I am separately approving
H.R. 11315 and must withhold my approval from S. 3553.
Hundred R. 7nd
THE WHITE HOUSE,
October 21, 1976
FORD CLEANED
LIBRARY
S. 3553
FORD
Ainety-fourth Congress of the United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Monday, the nineteenth day of January,
one thousand nine hundred and seventy-six
An Art
To define the jurisdiction of United States courts in suits against foreign states,
the circumstances in which foreign states are immune from suit and in which
execution may not be levied on their property, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That this Act may
be cited as the "Foreign Sovereign Immunities Act of 1976".
SEC. 2. (a) That chapter 85 of title 28, United States Code, is
amended by inserting immediately before section 1331 the following
new section:
"§ 1330. Actions against foreign states
"(a) The district courts shall have original jurisdiction without
regard to amount in controversy of any nonjury civil action against
a foreign state as defined in section 1603(a) of this title as to any
claim for relief in personam with respect to which the foreign state
is not entitled to immunity either under sections 1605-1607 of this title
or under any applicable international agreement.
"(b) Personal jurisdiction over a foreign state shall exist as to
every claim for relief over which the district courts have jurisdiction
under subsection (a) where service has been made under section 1608
of this title.
"(c) For purposes of subsection (b), an appearance by a foreign
state does not confer personal jurisdiction with respect to any claim
for relief not arising out of any transaction or occurrence enumerated
in sections 1605-1607 of this title."
(b) By inserting in the chapter analysis of that chapter before-
"1331. Federal question; amount in controversy; costs."
the following new item:
"1330. Actions against foreign states.".
SEC. 3. That section 1332 of title 28, United States Code, is amended
by striking subsections (a) (2) and (3) and substituting in their place
the following:
(2) citizens of a State and citizens or subjects of a foreign
state;
(3) citizens of different States and in which citizens or sub-
jects of a foreign state are additional parties; and
"(4) a foreign state, defined in section 1603 (a) of this title,
as plaintiff and citizens of a State or of different States.".
SEC. 4. (a) That title 28, United States Code, is amended by insert-
ing after chapter 95 the following new chapter:
"Chapter 97.-JURISDICTIONAL IMMUNITIES OF FOREIGN
STATES
"Sec.
"1602. Findings and declaration of purpose.
"1603. Definitions.
"1604. Immunity of a foreign state from jurisdiction.
"1605. General exceptions to the jurisdictional immunity of a foreign state.
"1606. Extent of liability.
"1607. Counterclaims.
S. 3553-2
"1608. Service; time to answer default.
"1609. Immunity from attachment and execution of property of a foreign state.
"1610. Exceptions to the immunity from attachment or execution.
"1611. Certain types of property immune from execution.
"§ 1602. Findings and declaration of purpose
"The Congress finds that the determination by United States courts
of the claims of foreign states to immunity from the jurisdiction of
such courts would serve the interests of justice and would protect the
rights of both foreign states and litigants in United States courts.
Under international law, states are not immune from the jurisdiction
of foreign courts insofar as their commercial activities are concerned,
and their commercial property may be levied upon for the satisfaction
of judgments rendered against them in connection with their com-
mercial activities. Claims of foreign states to immunity should hence-
forth be decided by courts of the United States and of the States
in conformity with the principles set forth in this chapter.
"§ 1603. Definitions
"For purposes of this chapter-
(a) A 'foreign state', except as used in section 1608 of this title,
includes a political subdivision of a foreign state or an agency
or instrumentality of a foreign state as defined in subsection (b).
'(b) An 'agency or instrumentality of a foreign state' means
any entity-
"(1) which is a separate legal person, corporate or other-
wise, and
"(2) which is an organ of a foreign state or political sub-
division thereof, or a majority of whose shares or other
ownership interest is owned by a foreign state or political
subdivision thereof, and
"(3) which is neither a citizen of a State of the United
States as defined in sections 1332 (c) and (d) of this title,
nor created under the laws of any third country.
(c) The 'United States' includes all territory and waters,
continental or insular, subject to the jurisdiction of the United
States.
(d) A 'commercial activity' means either a regular course of
commercial conduct or a particular commercial transaction or
act. The commercial character of an activity shall be determined
by reference to the nature of the course of conduct or particular
transaction or act, rather than by reference to its purpose.
(e) A 'commercial activity carried on in the United States by
a foreign state' means commercial activity carried on by such
state and having substantial contact with the United States.
"§ 1604. Immunity of a foreign state from jurisdiction
"Subject to existing international agreements to which the United
States is a party at the time of enactment of this Act a foreign state
shall be immune from the jurisdiction of the courts of the United
States and of the States except as provided in sections 1605-1607 of
this chapter.
"§ 1605. General exceptions to the jurisdictional immunity of a
foreign state
"(a) A foreign state shall not be immune from the jurisdiction of
courts of the United States or of the States in any case-
"(1) in which the foreign state has waived its immunity either
explicitly or by implication, notwithstanding any withdrawal of
S. 3553-3
the waiver which the foreign state may purport to effect except
in accordance with the terms of the waiver;
(2) in which the action is based upon a commercial activity
carried on in the United States by the foreign state; or upon an
act performed in the United States in connection with a commer-
cial activity of the foreign state elsewhere; or upon an act outside
the territory of the United States in connection with a commercial
activity of the foreign state elsewhere and that act causes a direct
effect in the United States;
(3) in which rights in property taken in violation of interna-
tional law are in issue and that property or any property
exchanged for such property is present in the United States in
connection with a commercial activity carried on in the United
States by the foreign state; or that property or any property
exchanged for such property is owned or operated by an agency
or instrumentality of the foreign state and that agency or instru-
mentality is engaged in a commercial activity in the United
States;
'(4) in which rights in property in the United States acquired
by succession or gift or rights in immovable property situated in
the United States are in issue; or
" (5) not otherwise encompassed in paragraph (2) above, in
which money damages are sought against a foreign state for per-
sonal injury or death, or damage to or loss of property, occurring
in the United States and caused by the tortious act or omission
of that foreign state or of any official or employee of that foreign
state while acting within the scope of his office or employment;
except this paragraph shall not apply to-
(A) any claim based upon the exercise or performance or
the failure to exercise or perform a discretionary function
regardless of whether the discretion be abused, or
"
(B) any claim arising out of malicious prosecution, abuse
of process, libel, slander, misrepresentation, deceit, or inter-
ference with contract rights.
(b) A foreign state shall not be immune from the jurisdiction of
the courts of the United States in any case in which a suit in admiralty
is brought to enforce a maritime lien against a vessel or cargo of
the foreign state, which maritime lien is based upon a commercial
activity of the foreign state, provided that-
" (1) notice of the suit is given by delivery of a copy of the
summons and of the complaint to the person, or his agent, having
possession of the vessel or cargo against which the maritime lien
is asserted; but such notice shall not be deemed to have been
delivered, nor may it thereafter be delivered, if the vessel or cargo
is arrested pursuant to process obtained on behalf of the party
bringing the suit-unless the party was unaware that the vessel
or cargo of a foreign state was involved, in which event the serv-
ice of process of arrest shall be deemed to constitute valid delivery
of such notice; and
(2) notice to the foreign state of the commencement of suit as
provided in section 1608 of this title is initiated within ten days
either of the delivery of notice as provided in subsection (b) (1)
of this section or in the case of a party who was unaware that the
vessel or cargo of a foreign state was involved, of the date such
party determined the existence of the foreign state's interest.
Whenever notice is delivered under subsection (b) (1) of this section,
CORRECTED SHEET NO. 2
S. 3553-4
the maritime lien shall thereafter be deemed to be an in personam
claim against the foreign state which at that time owns the vessel or
cargo involved: Provided, That a court may not award judgment
against the foreign state in an amount greater than the value of the
vessel or cargo upon which the maritime lien arose, such value to be
determined as of the time notice is served under subsection (b) (1)
of this section.
"§ 1606. Extent of liability
"As to any claim for relief with respect to which a foreign state is
not entitled to immunity under section 1605 or 1607 of this chapter,
the foreign state shall be liable in the same manner and to the same
extent as a private individual under like circumstances; but a foreign
state except for an agency or instrumentality thereof shall not be liable
for punitive damages;
"If, however, in any case wherein death was caused, the law of the
place where the action or omission occurred provides, or has been con-
strued to provide, for damages only punitive in nature, the foreign
state shall be liable for actual or compensatory damages measured by
the pecuniary injuries resulting from such death which were incurred
by the persons for whose benefit the action was brought.
"§ 1607. Counterclaims
"In any action brought by a foreign state, or in which a foreign state
intervenes, in a court of the United States or of a State, the for-
eign state shall not be accorded immunity with respect to any
counterclaim-
"(a) for which a foreign state would not be entitled to immu-
nity under section 1605 of this chapter had such claim been
brought in a separate action against the foreign state; or
"(b) arising out of the transaction or occurrence that is the
subject matter of the claim of the foreign state; or
"(c) to the extent that the counterclaim does not seek relief
exceeding in amount or differing in kind from that sought by the
foreign state.
"§ 1608. Service; time to answer; default
'(a) Service in the courts of the United States and of the States
shall be made upon a foreign state or political subdivision of a foreign
state:
"(1) by delivery of a copy of the summons and complaint in
accordance with any special arrangement for service between the
plaintiff and the foreign state or political subdivisions; or
"(2) if no special arrangement exists, by delivery of a copy of
the summons and complaint in accordance with an applicable
international convention on service of judicial documents; or
"(3) if service cannot be made under paragraphs (1) or (2)
by sending a copy of the summons and complaint and a notice of
suit, together with a translation of each into the official language
of the foreign state, by any form of mail requiring a signed
receipt, to be addressed and dispatched by the clerk of the court
to the head of the ministry of foreign affairs of the foreign state
concerned, or
"(4) if service cannot be made within 30 days under paragraph
(3), by sending two copies of the summons and complaint and a
notice of suit, together with a translation of each into the official
language of the foreign state, by any form of mail requiring a
signed receipt, to be addressed and dispatched by the clerk of the
S. 3553-5
court to the Secretary of State in Washington, District of Colum-
bia, to the attention of the Director of Special Consular Service-
and the Secretary shall transmit one copy of the papers through
diplomatic channels to the foreign state and shall send to the
clerk of the court a certified copy of the diplomatic note indicat-
ing when the papers were transmitted.
As used in this subsection, a 'notice of suit' shall mean a notice
addressed to a foreign state and in a form prescribed by the Secretary
of State by regulation.
"(b) Service in the courts of the United States and of the States
shall be made upon an agency or instrumentality of a foreign state:
(1) by delivery of a copy of the summons and complaint in
accordance with any special arrangement for service between the
plaintiff and the agency or instrumentality; or
"(2) if no special arrangement exists, by delivery of a copy of
the summons and complaint either to an officer, a managing or
general agent, or to any other agent authorized by appointment
or by law to receive service of process in the United States; or in
accordance with an applicable international convention on serv-
ice of judicial documents; or
"(3) if service cannot be made under paragraphs (1) or (2),
and if reasonably calculated to give actual notice, by delivery of
a copy of the summons and complaint, together with a translation
of each into the official language of the foreign state-
"(A) as directed by an authority of the foreign state or
political subdivision in response to a letter rogatory or
request or
" (B) by any form of mail requiring a signed receipt, to be
addressed and dispatched by the clerk of the court to the
agency or instrumentality to be served, or
"(C) as directed by order of the court consistent with the
law of the place where service is to be made.
(c) Service shall be deemed to have been made-
(1) in the case of service under subsection (a) (4), as of the
date of transmittal indicated in the certified copy of the diplo-
matic note; and
"(2) in any other case under this section, as of the date of
receipt indicated in the certification, signed and returned postal
receipt, or other proof of service applicable to the method of serv-
ice employed.
"(d) In any action brought in a court of the United States or of a
State, a foreign state, a political subdivision thereof, or an agency
or instrumentality of a foreign state shall serve an answer or other
responsive pleading to the complaint within sixty days after service
has been made under this section.
"(e) No judgment by default shall be entered by a court of the
United States or of a State against a foreign state, a political sub-
division thereof or an agency or instrumentality of a foreign state,
unless the claimant establishes his claim or right to relief by evidence
satisfactory to the court. A copy of any such default judgment shall
be sent to the foreign state or political subdivision in the manner
prescribed for service in this section.
"§ 1609. Immunity from attachment and execution of property of
a foreign state
"Subject to existing international agreements to which the United
States is a party at the time of enactment of this Act, the property in
S. 3553-6
the United States of a foreign state shall be immune from attachment,
arrest and execution except as provided in sections 1610 and 1611
of this chapter.
"§ 1610. Exceptions to the immunity from attachment of execution
"(a) The property in the United States of a foreign state, as defined
in section 1603 (a) of this chapter, used for a commercial activity in the
United States, shall not be immune from attachment in aid of execu-
tion, or from execution, upon a judgment entered by a court of the
United States or of a State after the effective date of this Act, if-
"(1) the foreign state has waived its immunity from attach-
ment in aid of execution or from execution either explicitly or by
implication, notwithstanding any withdrawal of the waiver the
foreign state may purport to effect except in accordance with the
terms of the waiver, or
"(2) the property is or was used for the commercial activity
upon which the claim is based, or
"(3) the execution relates to a judgment establishing rights in
property which has been taken in violation of international law
or which has been exchanged for property taken in violation of
international law, or
(4) the execution relates to a judgment establishing rights in
property-
(A) which is acquired by succession or gift, or
(B) which is immovable and situated in the United
States: Provided, That such property is not used for pur-
poses of maintaining a diplomatic or consular mission or
the residence of the Chief of such mission, or
"(5) the property consists of any contractual obligation or any
proceeds from such a contractual obligation to indemnify or hold
harmless the foreign state or its employees under a policy of
automobile or other liability or casualty insurance covering the
claim which merged into the judgment.
"(b) In addition to subsection (a), any property in the United
States of an agency or instrumentality of a foreign state engaged in
commercial activity in the United States shall not be immune from
attachment in aid of execution, or from execution, upon a judgment
entered by a court of the United States or of a State after the effective
date of this Act, if-
"(1) the agency or instrumentality has waived its immunity
from attachment in aid of execution or from execution either
explicitly or implicitly, notwithstanding any withdrawal of the
waiver the agency or instrumentality may purport to effect
except in accordance with the terms of the waiver, or
"(2) the judgment relates to a claim for which the agency or
instrumentality is not immune by virtue of sections 1605 (a) (2),
(3) or (5), or 1605(b) of this chapter, regardless of whether
the property is or was used for the activity upon which the claim
is based.
"(c) No attachment or execution referred to in subsections (a) and
(b) of this section shall be permitted until the court has ordered such
attachment and execution after having determined that a reasonable
period of time has elapsed following the entry of judgment and the
giving of any notice required under section 1608(e) of this chapter.
"(d) The property of a foreign state, as defined in section 1603 (a)
of this chapter, used for a commercial activity in the United States,
S. 3553-7
shall not be immune from attachment prior to the entry of judgment
in any action brought in a court of the United States or of a State,
or prior to the elapse of the period of time provided in subsection
(c) of this section, if-
"(1) the foreign state has explicitly waived its immunity from
attachment prior to judgment, notwithstanding any withdrawal
of the waiver the foreign state may purport to effect except in
accordance with the terms of the waiver, and
(2) the purpose of the attachment is to secure satisfaction of
a judgment that has been or may ultimately be entered against
the foreign state, and not to obtain jurisdiction.
"§ 1611. Certain types of property immune from execution
"(a) Notwithstanding the provisions of section 1610 of this chapter,
the property of those organizations designated by the President as
being entitled to enjoy the privileges, exemptions, and immunities pro-
vided by the International Organizations Immunities Act shall not
be subject to attachment or any other judicial process impeding the
disbursement of funds to, or on the order of, a foreign state as the
result of an action brought in the courts of the United States or the
States.
'(b) Notwithstanding the provisions of section 1610 of this chapter,
the property of a foreign state shall be immune from attachment and
from execution, if-
"(1) the property is that of a foreign central bank or monetary
authority held for its own account, unless such bank or authority,
or its parent foreign government, has explicitly waived its
immunity from attachment in aid of execution, or from execution,
notwithstanding any withdrawal of the waiver which the bank,
authority or government may purport to effect except in accord-
ance with the terms of the waiver; or
"(2) the property is, or is intended to be, used in connection
with a military activity and
(A) is of a military character, or
(B) is under the control of a military authority or
defense agency."
(b) That the analysis of "PART IV.-JURISIDICTION AND VENUE" of
title 28, United States Code, is amended by inserting after-
"95. Customs Court.",
the following new item:
"97. Jurisdictional Immunities of Foreign States.".
SEC. 5. That section 1391 of title 28, United States Code, is
amended by adding at the end thereof the following new subsection:
(f) A civil action against a foreign state as defined in section
1603 (a) of this title may be brought-
(1) in any judicial district in which a substantial part of
the events or omissions giving rise to the claim occurred, or a
substantial part of property that is the subject of the action is
situated;
"(2) in any judicial district in which the vessel or cargo of a
foreign state is situated, if the claim is asserted under section
1605 (b) of this title;
"(3) in any judicial district in which the agency or instru-
mentality is licensed to do business or is doing business, if the
action is brought against an agency or instrumentality of a
foreign state as defined in section 1603(b) of this title; or
LIBRARY
0801
S. 3553-8
"(4) in the United States District Court for the District of
Columbia if the action is brought against a foreign state or
political subdivision thereof.".
SEC. 6. That section 1441 of title 28, United States Code, is amended
by adding at the end thereof the following new subsection:
"(d) Any civil action brought in a State court against a foreign
state as defined in section 1603 (a) of this title may be removed by
the foreign state to the district court of the United States for the
district and division embracing the place where such action is pending.
Upon removal the action shall be tried by the court without jury.
Where removal is based upon this subsection, the time limitations of
section 1446(b) of this chapter may be enlarged at any time for cause
shown.".
SEC. 7. If any provision of this Act or the application thereof to
any foreign state is held invalid, the invalidity does not affect other
provisions or applications of the Act which can be given effect with-
out the invalid provision or application, and to this end the pro-
visions of this Act are severable.
SEC. 8. This Act shall take effect ninety days after the date of its
enactment.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.
FOR IMMEDIATE RELEASE
OCTOBER 22, 1976
Office of the White House Press Secretary
THE WHITE HOUSE
STATEMENT BY THE PRESIDENT
It is with great satisfaction that I announce that
I have signed H.R. 11315, the Foreign Sovereign Immunities
Act of 1976. This legislation, proposed by my Administration,
continues the longstanding commitment of the United States
to seek a stable international order under the law.
It has often been said that the development of an
international legal order occurs only through small but
carefully considered steps. The Foreign Sovereign
Immunities Act of 1976 which I sign today is such a step.
This legislation will enable American citizens and
foreign governments alike to ascertain when a foreign state
can be sued in our courts. In this modern world where
private citizens increasingly come into contact with foreign
government activities, it is important to know when the
courts are available to redress legal grievances.
This statute will also make it easier for our citizens
and foreign governments to turn to the courts to resolve
ordinary legal disputes. In this respect, the Foreign
Sovereign Immunities Act carries forward a modern and
enlightened trend in international law. And it makes this
development in the law available to all American citizens.
# # #
FORD & LIBRARY GERALD
FOR IMMEDIATE RELEASE
OCTOBER 22, 1976
Office of the White House Press Secretary
THE WHITE HOUSE
MEMORANDUM OF DISAPPROVAL
I am withholding my approval from S. 3553, the Foreign
Sovereign Immunities Act of 1976, for technical reasons.
In its haste to adjourn, the Congress passed identical
Senate and House bills on this subject. At the time the
Senate passed the House bill, H.R. 11315, it attempted to
vacate its earlier passage of S. 3553 but was unable to do
so because it had left the Senate's jurisdiction. The House,
unaware that the Senate had passed the House bill, also passed
the Senate bill.
In view of the Senate's action in attempting to vacate
its passage of S. 3553, there is doubt that S. 3553 has been
properly enrolled, and therefore I am separately approving
H.R. 11315 and must withhold my approval from S. 3553.
GERALD R. FORD
THE WHITE HOUSE,
October 21, 1976
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