Supreme Court’s Opinion
In a 7-2 opinion authored by Justice Brett Kavanaugh, the Supreme Court agreed with the Second Circuit that the allegations against Halkbank are plainly “offenses against the laws of the United States” and fall within the purview of 18 U.S.C. § 3231. The Court rejected Halkbank’s argument that this language must be read in the context of other federal civil and bankruptcy statutes that expressly refer to actions against foreign sovereigns. Specifically, the Court noted that such a reading would create an atextual limitation on the broad sweep of jurisdiction conferred by §3231 and create a new rule that would require Congress to specifically indicate its intent to include foreign states and their instrumentalities in all jurisdictional statutes.
Unlike the Second Circuit, the Supreme Court reached the issue of whether the FSIA applies to criminal actions and held that the FSIA confers immunity only in civil cases. Accordingly, the Court did not reach questions pertaining to the scope of the FSIA’s commercial activity exception. The Court reasoned that the FSIA grants district courts jurisdiction over nonjury civil actions and delineates procedures pertaining to such actions such as removal to federal court, service of process, and availability of default judgments and damages. The Court also observed that the FSIA is silent as to criminal matters and is codified among other civil procedure statutes rather than in Title 18 with the criminal code.
Finally, the Supreme Court concluded that the Second Circuit failed to fully consider all of the arguments related to common-law immunity, which may exist in circumstances in which the FSIA does not. The Court vacated the Second Circuit’s judgment on this issue and remanded the case for further consideration on whether a foreign sovereign or its instrumentality may enjoy common-law immunity from criminal prosecution.
Implications
The FSIA provides immunity to foreign sovereigns and their instrumentalities in both federal and state actions. Thus, as Justice Neil Gorsuch expressed in oral argument, the Court’s holding that the FSIA only pertains to civil cases could open the door to state criminal prosecutions of foreign states.1 After Jam v. Int’l Fin. Corp., 139 S. Ct. 759 (2019), the same may be true for international organizations. Such prosecutions could have severe implications for national security. In Justice Sonia Sotomayor’s words, “individual prosecutors, whether it’s federal or state, [have] the right to insult another nation by giving them this unbridled power to initiate suits.”2
The Supreme Court’s majority opinion does little to assuage these concerns. The Court notes that Halkbank did not produce any examples of a state prosecution of a foreign state or its instrumentality. The Court also suggests that if such an action arises in the future, the United States could file a brief supporting the sovereign’s immunity, or the action could be preempted by foreign affairs preemption. Yet these suggestions would require the foreign sovereign or international organization to endure the tangible and intangible consequences of a pending criminal action, even if the charges are erroneous or brought by a rogue state prosecutor. Alternatively, Congress could enact legislation extending FSIA immunity to criminal cases.
For now, whether foreign sovereigns and their instrumentalities enjoy immunity from criminal prosecution pursuant to the common law remains an open question. Accordingly, foreign sovereigns and their instrumentalities and international organizations may be at risk.
A copy of the opinion can be found here.
1See Transcript of Oral Argument at 53, Turkiye Halk Bankasi A.S. v. United States (21-1450).
2Id. at 60.
