Legal Definitions - FSIA

The term FSIA stands for the Foreign Sovereign Immunities Act.

The Foreign Sovereign Immunities Act is a United States federal law that governs when a foreign country (or its agencies and instrumentalities) can be sued in U.S. courts. Generally, foreign countries are immune from lawsuits in the United States, meaning they cannot be brought before U.S. courts without their consent. The FSIA establishes specific, limited exceptions to this general rule of immunity, outlining the circumstances under which a foreign state can be sued in the U.S.

Here are a few examples illustrating how the FSIA applies:

• Commercial Activity Exception: Imagine a U.S. company, "Global Tech Solutions," enters into a contract with "State Telecom," a telecommunications company wholly owned and operated by the government of Country X, to provide specialized software. State Telecom fails to pay for the software as agreed. Global Tech Solutions wants to sue State Telecom in a U.S. court for breach of contract. Under the FSIA, State Telecom, despite being an arm of a foreign government, would likely not be immune from suit because its purchase of software was a "commercial activity" carried out in the United States. The FSIA allows lawsuits against foreign states for actions arising out of their commercial activities.

• Tortious Act Exception: Consider a scenario where a U.S. citizen is severely injured in a car accident in Miami, Florida. The accident was caused by a vehicle owned by the Ministry of Culture of Country Y, and driven by one of its officials who was on an official visit and acting within the scope of their employment. The U.S. citizen wishes to sue Country Y for damages. The FSIA includes an exception for certain "tortious acts" (civil wrongs causing harm) that occur in the United States. If the official's negligent driving was not a discretionary function of their government role, the FSIA might allow the U.S. citizen to sue Country Y in a U.S. court, as the incident occurred entirely within U.S. territory and caused personal injury.

• Waiver of Immunity Exception: Suppose the government of Country Z seeks a large loan from a major U.S. bank, "American Capital Bank." During the negotiation of the loan agreement, American Capital Bank insists on a clause stating that Country Z explicitly "waives its sovereign immunity" and agrees to be subject to the jurisdiction of U.S. courts in the event of a default on the loan. Country Z agrees and signs the contract. If Country Z later defaults on the loan, American Capital Bank can sue Country Z in a U.S. court. The FSIA recognizes that a foreign state can explicitly or implicitly waive its immunity, and in this case, the contractual waiver would allow the lawsuit to proceed.