Same Flag, Different Rules: The FSIA’s State-Instrumentality Divide

The Foreign Sovereign Immunities Act of 1976 (FSIA) shields foreign states from suit in the United States and protects certain sovereign property from seizure by court order. As we explained in our January 2021 Advisory, the term “foreign state” sweeps broadly; it covers not only the foreign sovereign itself but also its “political subdivisions” and its “agencies and instrumentalities.” But those different classifications matter. Whether a defendant is the foreign state itself, a political subdivision, or an agency or instrumentality can affect the rules governing service of process, the availability of certain immunity defenses, and the scope of attachment and execution protections.

Classifying an entity is not always straightforward. Foreign governments operate through an array of nominally distinct entities — ministries, regulatory bodies, subnational governments, state-owned enterprises, museums, universities, and sovereign wealth funds, to name a few — and courts do not always