Foreign Immunities Exceptions

Foreign Immunities Exceptions in the United States

Foreign Sovereign Immunities Act Exceptions: Waiver

Section 1605(a)(1) provides an exception to immunity when the foreign state has waived its immunity “either explicitly or by implication, notwithstanding any withdrawal of the waiver which the foreign state may purport to effect except in accordance with the terms of the waiver.” Like other exceptions, this provision operates to limit the statutory grant of federal question jurisdiction.

Explicit waivers

Explicit waivers are typically found in contractual provisions, although they could arise from independent statements (for example, by a duly authorized governmental official). They are normally construed narrowly by U.S. courts in favor of the sovereign.107 In some situations, treaty provisions may also qualify, although the U.S. Supreme Court cautioned in Argentine Republic v. Amerada Hess Shipping Corp. that federal courts should not lightly imply a waiver based upon ambiguous treaty language.

Implied waivers

As a rule, courts are even more reluctant to find implied waivers, requiring strong evidence of the foreign state’s intent. As noted in In re Republic of the Philippines, implied waivers have traditionally been found only when:

  • a foreign state has agreed to arbitration in another country,
  • a foreign state has agreed that a contract is governed by the law of another foreign country, or
  • a foreign state has filed a responsive pleading in a case without raising the defense of sovereign immunity.

Allegations of implicit waiver by foreign government conduct in violation of the norms of international law (including acts alleged to be contrary to jus cogens, such as torture or genocide) have not been successful.

Foreign Sovereign Immunities Act Exceptions: Commercial Activity

The “commercial activity” exception in § 1605(a)(2) lies at the heart of the restrictive theory of immunity, and not surprisingly it is the most litigated exception. Availability of the exception rests on the answers to several related questions:

  • Does the activity of the state or government in question qualify as a “commercial activity”?
  • Is the plaintiff’s specific claim “based upon” that activity (or upon an act in connection with that activity)?
  • Does the activity in question have a sufficient jurisdictional nexus to the United States?

Definition of commercial activity

Section 1603(d) defines “commercial activity” as “either a regular course of commercial conduct or a particular commercial transaction or act.” It is important to note that the provision also provides that “[t]he commercial character of the 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.”

“Based upon,”

The complaint must be “based upon” a commercial activity.

Jurisdictional nexus

Under § 1605(a)(2), a foreign state is not immune if the action brought against that state is based upon:

  • A commercial activity carried on in the United States by the foreign state; or
  • An act performed in the United States in connection with a commercial activity of the foreign state elsewhere (i.e., outside the United States); or
  • An act outside the United States that was taken in connection with a commercial activity of the foreign state outside of the U.S. and that caused a direct effect in the United States.


Section 1605(a)(3) grants jurisdiction against foreign states in any case “in which rights in property taken in violation of international law are in issue.”

Rights in property

Most courts have concluded that the alleged “taking” in question must relate to physical or tangible property, not the right to receive payment. Bank accounts have been held to be a form of intangible property and thus not within the scope of the expropriation exception.

Taken in violation of international law

The term “taken” is not defined in the FSIA, but the provision was intended to refer to the nationalization or expropriation of property by a foreign sovereign without payment of prompt, adequate, and effective compensation as required by international law. Judicial administration and sale of a financially struggling company does not constitute a “taking.”

Commercial nexus

The so-called “fourth prong” requires a connection between the taking and commercial activity in the United States. As is often the case under the FSIA, standards established for the foreign state differ from those established for its agencies and instrumentalities.

Non-Commercial Torts in the United States

Under § 1605(a)(5), a foreign state is not immune for acts (not otherwise covered by the commercial activity exception) in which money damages are sought for personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state or of any official or employee of that foreign state while acting within the scope of his or her office or employment.

Discretionary functions excluded

The non-commercial tort exception does not apply to two important categories of claims, namely those “based upon the exercise or performance or the failure to exercise or perform a discretionary function regardless of whether the discretion is abused”; and “arising out of malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights.”

Not extraterritorial

The exception covers only torts occurring within the territorial jurisdiction of the United States. The exception does not apply when a tort occurring outside the United States is merely said to have had an effect in the United States.

No punitive damages

Under 28 U.S.C. § 1606, punitive damages are not recoverable against a foreign state but are recoverable against an agency or instrumentality. As noted in Part V.F. infra, special rules apply to damages in actions under § 1605A against state sponsors of terrorism.


Under § 1605(a)(6), a foreign state, agency, or instrumentality is not immune from the jurisdiction of U.S. courts in any proceeding to enforce an arbitration agreement.

State-Sponsored Terrorism

Since 1996, when Congress amended the FSIA to remove the immunity of foreign states for certain acts of state-sponsored terrorism, more and more cases have been brought under this provision.

The new rule

Under the 2008 amendment, a designated state sponsor of terrorism has no immunity in a case in which money damages are sought for personal injury or death that was caused by an act of torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources for such an act if such act or provision of material support or resources is engaged in by an official, employee, or agent of such foreign state while acting within the scope of his or her office, employment, or agency.


As the quoted provision indicates, the exception applies only to actions for money damages arising from specifically enumerated categories of acts which were engaged in by foreign officials, employees, or agents “acting within the scope of [their] office, employment, or agency.”

Designated state sponsors

For these purposes, a foreign state must have been formally designated by the Secretary of State as a government that has “repeatedly provided support for acts of international terrorism” pursuant to § 6(j) of the Export Administration Act of 1979, § 620A of the Foreign Assistance Act of 1961, § 40 of the Arms Export Control Act, or any other relevant provision of law. The list of designated state sponsors of terrorism is published officially. As of December 2013, four countries were on the list: Cuba, Iran, Sudan, and Syria.

The FSIA and State-Sponsored Terrorism Exception

By its terms, § 1605A(c) provides a private right of action under federal law for money damages against designated foreign state sponsors of terrorism (including their political subdivisions and agencies or instrumentalities). In relation to this section, see the entry and its sections about:

  • Exclusivity
  • Statute of limitations
  • Default
  • Discovery






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