in cases against foreign states which would make it unnecessary to attach the assets of foreign states for purposes of jurisdiction.

The most important changes include (1) further definition of "commercial activity carried on in the United States by a foreign state" and "public debt" in Section 1603; (2) clarification of the limitations of immunity in tort actions (Section 1605(5)), in respect of counterclaims (Section 1607), and in case of execution of judgment (Section 1610); and (3) substantial revision of Section 1608 relating to service of process to conform with Article XXII of the Convention on Diplomatic Relations, signed at Vienna April 18, 1961, and with the Federal Rules of Civil Procedure.

In addition, important new provisions have been added to preserve the jurisdiction of the courts of the United States in cases in which a suit in admiralty is brought to enforce a maritime lien against a vessel or cargo of a foreign state (Section 1605(b)), and to avoid interference with disbursements to foreign states by certain international organizations located in the United States (Section 1611(a)). These and other changes are discussed in the enclosed Analysis.

The text of the revised bill, which was introduced in Congress on Dec. 19, 1975, as H.R. 11315, 94th Cong., 1st Sess., follows:

A BILL

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 1975."

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 of process 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."; and

(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 C de, 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 subjects 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 inserting after Chapter 95 the following new chapter:

"Chapter 97 JURISDICTIONAL IMMUNITIES OF FOREIGN STATES

"Sec.

"1604. Immunity of a foreign state from jurisdiction.

"1605. General exceptions to the jurisdictional immunity of a foreign state. "1606. Claims involving the public debt.

"1607.

Counterclaims.

"1608. Service of process; 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 commercial activities. Claims of foreign states to immunity should henceforth 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 sections 1606 and 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 and instrumentality of a foreign state' means any 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 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.

"8 1604. Immunity of a foreign state from jurisdiction

"Subject to existing and future international agreements to which the United States is a party, 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 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 commercial 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 international 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 instrumentality is engaged in a commercial activity in the United States;

"(4) in which rights in property in the United States acquired by succession or gift or rights in immovable property situated in the United States are in issue; or

"(5) not otherwise encompassed in paragraph (2) above, in which money damages are sought against a foreign state for personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state or of any official or employee of that foreign state while acting within the scope of his office or 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 interference 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 service 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 served, nor may it thereafter be served, if the vessel or cargo is arrested pursuant to process obtained on behalf of the party bringing the suit-unless the party was unaware that the vessel or cargo of a foreign state was involved, in which event the service of process of arrest shall be deemed to constitute valid service 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 of the service of process as provided in subsection (b)(1) of this section.

"Whenever notice is served under subsection (b)(1) of this section, 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.

"(c) As to any claim for relief with respect to which a foreign state is not entitled to immunity under this section or under sections 1606 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 itself, as distinguished from a political subdivision thereof or from an agency or instrumentality of a foreign state, shall not be liable in tort for interest prior to judgment or for punitive damages;

"If, however, in any case wherein death was caused, the law of the place where the action or omission occurred provides, or has been construed to provide, for damages only punitive in nature, the foreign state shall be liable for actual or compensatory damages measured by the pecuniary injuries

resulting from such death which were incurred by the persons for whose benefit the action was brought.

"§ 1606. Claims involving the public debt

"(a) For purposes of this section, a 'foreign state' shall not include a political subdivision of a foreign state or an agency or instrumentality of a foreign state.

"(b) Notwithstanding the provisions of section 1605 of this Chapter, a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States in any case relating to debt obligations incurred for general governmental purposes unless

“(1) the foreign state has waived its immunity explicitly, notwithstanding any withdrawal of the waiver which the foreign state may purport to effect except in accordance with the terms of the waiver; or

"(2) the case arises under provisions codified as sections 77a through 80b21 of Title 15, United States Code, as amended, or any other statute which may hereafter be administered by the United States Securities and Exchange Commission.

"§ 1607. Counterclaims

"In any action brought by a foreign state, or in which a foreign state intervenes, in a court of the United States or of a State, the foreign state shall not be accorded immunity with respect to any counterclaim

"(a) for which a foreign state would not be entitled to immunity under sections 1605 and 1606 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 of process; time to answer; default

"Subject to existing and future international agreements to which the United States is a party

"(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 delivering a copy of the summons and of the complaint in accordance with any special arrangement for service between the plaintiff and the foreign state or political subdivision; or

"(2) if no special arrangement exists, and if service is reasonably calculated to give actual notice,

"(A) by service of a copy of the summons and of the complaint, together with a translation into the official language of the foreign state, as directed by an authority of the foreign state or of the political subdivision in response to a letter rogatory or request, or

"(B) by sending a copy of the summons and of the complaint, together with a translation 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 official in charge of the foreign affairs of the foreign state which is, or whose political subdivision is, named in the complaint; or

"(3) if proof of service is not made within 60 days after service has been initiated under paragraphs (1) or (2) of this subsection, and if

"(A) the claim for relief arises out of an activity or act in the United States of a diplomatic or consular representative of the foreign state for which the foreign state is not immune from jurisdiction under section 1605 of this Title, or

"(B) the foreign state uses diplomatic channels for service upon the United States or any other foreign state, or

"(C) the foreign state has not notified the Secretary of State prior to the institution of the proceeding in question that it prefers that service not be made through diplomatic channels,

by sending two copies of the summons and of the complaint, together with a translation 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 Secretary of State at Washington, District of Columbia, to

the attention of the Director of Special Consular Services, and the Secretary shall send one copy through diplomatic channels to the foreign state and shall send a certified copy of the diplomatic note to the clerk of the court in which the action is pending. The Secretary shall maintain and publish in the Federal Register a list of foreign states upon which service may be made under subparagraphs (B) and (C) of this paragraph, and such list shall be conclusive for purposes of subparagraphs (B) and (C);

"(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 delivering a copy of the summons and of the 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 delivering a copy of the summons and of the complaint 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

"(3) if service cannot be made under paragraphs (1) or (2) of this subsection, and if service is reasonably calculated to give actual notice,

"(A) by service of a copy of the summons and of the complaint, together with a translation into the official language of the foreign state, as directed by an authority of the foreign state or of a political subdivision in response to a letter rogatory or request, or

"(B) by sending a copy of the summons and of the complaint, together with a translation 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 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) for the purposes of this section, service of process shall be deemed to have been made

"(1) in the case of subsections (a)(1) and (b)(1), when delivered in accordance with the terms of the special arrangements;

"(2) in the case of subsections (a)(2)(A) and (b)(3)(A), when delivered as directed by an authority of the foreign state or political subdivision;

"(3) in the case of subsections (a)(2)(B) and (b)(3)(B), when received abroad by mail, as evidenced by the returned, signed receipt;

"(4) in the case of subsection (b)(2), when delivered to an officer, managing or general agent or appointed agent in the United States;

"(5) in the case of subsection (a)(3), when sent through diplomatic channels, as evidenced by a certified copy of the diplomatic note of transmittal; "(6) in the case of subsection (b)(3)(C), when served as directed by order of the court.

"(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 or to a cross-claim, or a reply to a counterclaim, within 60 days after the service of the pleading in which a claim is asserted; and

"(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 subdivision 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 of process in this section.

"§ 1609. Immunity from attachment and execution of property of a foreign state

"Subject to existing and future international agreements to which the United States is a party, the property in the United States of a foreign state shall be immune from attachment and from execution except as provided in sections 1610 and 1611 of this Chapter.

"§ 1610. Exceptions to the immunity from attachment or execution

"(a) The property in the United States of a foreign state, as defined in section 1603(a) of this Chapter, used for a commercial activity in the United States, shall not be immune from attachment in aid of execution, or from