What Is the Propriety of Service Of Process on Foreign Central Banks?

As observed by one author,¹³ “[i]t is possible, but unlikely, that in a particular instance a foreign central bank might be deemed to be part of the foreign state itself, comparable to the case of a ministry of finance or treasury. In modern practice, a central bank is much more likely to be organized as a separate entity, at least in part because some degree of separation from the government is perceived as important to the credible conduct of monetary policy by a central bank.”¹⁴

Terms: ‘Organ’ and ‘Agency’

As seen, the plaintiff in Deutsche Bundesbank did not test the German Bank’s bad service defense, and therefore, the court had no reason to scrutinize its cogency. A different plaintiff, however, might have gone the extra step to show that Congress itself intended the terms “organ”¹⁵ and “agency or instrumentality” to include foreign central banks. The House Report¹⁶ states that:

The more resourceful plaintiff might also have cited Ernest T. Patrikis, then deputy general counsel of the Federal Reserve Bank of New York, who, when the FSIA was under discussion in Congress, said that central banks are organs under the FSIA.¹⁸ In such a case, service could conceivably be made under §1608(b)(2) which allows service by delivery of the summons “to either 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.” Although a plaintiff might not have an easy time proving proper service under (b)(2),¹⁹ nevertheless it cannot be ruled out that a given court might deem service under this alternative method valid if the foreign central bank were served at its United States premises.²⁰

Substantial/Strict Compliance

Why then shouldn’t service which is in “substantial compliance” with §1608(b)(2) be sufficient when made on a central bank’s representative office in the United States?

The rationale for differentiating between service of process which is in “substantial compliance” with the FSIA’s service procedures, and which is generally accepted when service upon an agency or instrumentality of a foreign state is at issue, and, on the other hand, “strict compliance” when service is made upon a foreign state is concisely explained by the U.S. Court of Appeals for the District of Columbia Circuit in Transaereo v. La Fuerza Aerea Boliviana,²¹ discussing the House Report²²: