What a US court decision means for sovereign immunity for foreign central banks

Author: | Published: 30 Mar 2012

On July 5 2011, the US Court of Appeals for the Second Circuit held that the immunity provided to foreign central bank assets under the Foreign Sovereign Immunities Act (FSIA) does not depend on whether the foreign central bank is independent from the parent state. In the view of the court, the issue as to whether the assets of a foreign central bank are attachable assets under the FSIA depends on whether the assets are used for central bank functions.

On this basis, the US Court of Appeals for the Second Circuit rejected the attachments made by the bondholders of the Republic of Argentina on the assets held in the Banco Central de la República Argentina's (BCRA) account at the Federal Reserve Bank of New York (FRBNY) The case was NML Capital v Banco Central de la República Argentina.

Background
By way of background, in December 2001, the Republic of...