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FAQ / Q. What is the difference between a foreign State, political subdivision, agency or instrumentality?A. Section 1330(a) of the Act gives federal district courts original jurisdiction in personam against foreign states, which are defined as including political subdivisions, agencies, and instrumentalities of foreign states. The Act provides distinct methods of service on a foreign state or political subdivision (28 USC 1608(a)) or service on an agency or instrumentality of a foreign state (28 USC 1608(b)). In order to serve the defendant, the claimant must determine into which category the defendant falls. If in doubt, a claimant should serve the defendant according to both sets of provisions. See Born & Westin, 340-344 (1989) and George, 19 Int'l Law. 51 (1985). The term "political subdivisions" includes all governmental units beneath the central government, including local governments according to the Act's legislative history. Section 1603(b) defines an "agency or instrumentality" of a foreign state as an entity (1) which is a separate legal person, corporate or otherwise, and (2) which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof, and (3) which is neither a citizen of the a state of the United States as defined in Sec. 1332(c) and (d) nor created under the laws of any third country. An instrumentality of a foreign state includes a corporation, association, or other juridical person a majority of whose shares or other ownership interests are owned by the state, even when organized for profit. For a discussion of the responsibilities of states for the obligations of their instrumentalities, see Restatement (Third) of the Foreign Relations Law of the United States, Sec. 452, p. 399-401 (1986). See also, the legislative history of the Act at 1976 U.S. Code Cong. & Ad. News 6614-6618, in particular, which states in part: "[A]s a general matter, entities which meet the definition of an 'agency or instrumentality of a foreign state' could assume a variety of forms, organizations, such as a shipping line or an airline, a steel company, a central bank, an export association, a governmental procurement agency or a department or ministry which acts and is suable in its own name. Id. at 6614. For a discussion of case law regarding the status of quasi-commercial entities in socialist states, see Born & Westin, p. 343-344 (1989); See also, Note, Breaking Out of the Capitalist Paradigm: The Significance of Ideology in Determining the Sovereign Immunity of Soviet and Eastern-Bloc Commercial Entities, 2 Hous. J. Int'l. L. 425 (1980); Note, Foreign Sovereign Immunity: Communist and Socialist Organizations - Effects of State's System of Property Ownership on Determination of Agency or Instrumentality Status Under the Foreign Sovereign Immunities Act of 1976, 9 Ga. J. Int'l & Comp. L. 111 (1979); But see, Yessenin-Bolpin v. Novosti Press Agency 443 F. Supp. 849, 852 (S.D.N.Y. 1978); Outboard Marine Corp. v. Pezetel, D.C. Del. 1978, 461 F. Supp. 384; Harris v. VAO Intourist Moscow, D.C. N.Y. 1979, 481 F. Supp. 1056; United Euram Corp. v. Union of Soviet Socialist Republics, D.C N.Y. 1978, 461 F. Supp. 609; S&S Mach. Co. v. Masinenexportimport, 706 F. 2d 411 (2d Cir.), cert. denied, 464 U.S. 850 (1983); Edlow Int'l Co. v. Nuklearna Elektrarna Krsko, 441 F Supp. 827 (D.D.C. 1977); Dayton v. Czechoslovak Socialist Republic, 834 F. 2d 203 (D.C. Cir. 1987). Keywords: corporation, |
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