,,ii  #aadth ,,congress  #b;d ,session  
,s4 #ccbc  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,september #ad1
 #bjaf ,mr4 ,grassley introduced the    
following bill2 which was read twice and
 referred to the ,committee on the      
,judiciary  ,a ,,bill  ,to improve the  
,foreign ,sovereign ,immunities ,act of 
#aigf1 and for other purposes4  #a4     
,short title  ,this ,act may be cited as
 the ,state-,owned ,entity ,transparency
 and ,accountability ,reform ,act of    
#bjaf4  #b4 ,findings ,congress finds   
the following3 7#a7 ,as ,congress       
expressed when it enacted the ,foreign  
,sovereign ,immunities ,act of #aigf    
7,public ,law #id-ehc2 #ij ,stat4       
#bhia71 under international law1 foreign
 states are immune from the jurisdiction
 of the courts of the ,united ,states   
and of the ,states1 subject to certain  
exceptions4 ,one of these exceptions1   
the commercial activity exception1      
generally subjects foreign states to the
 jurisdiction of courts of the ,united  

,states in actions relating to a foreign
 state's commercial activities4  7#b7   
,as the ,supreme ,court observed #g     
years after ,congress enacted the       
,foreign ,sovereign ,immunities ,act of 
#aigf1 increasingly ''' governments     
throughout the world have established   
separately constituted legal entities to
 perform a variety of tasks4 ,first     
,national ,city ,bank v4 ,banco ,para   
,el ,comercio ,exterior de ,cuba1 #dfb  
,u4,s4 #faa 7#aihc7 7referred to in this
 section as ,bancec74 ,these state      
instrumentalities are typically         
established as ''' separate juridical   
entities1 with powers to hold and sell  
property and to sue and be sued4 ,run by
 states as distinct economic            
enterprises1 they operate on an         
enterprise basis while enjoying a       
greater degree of flexibility and       
independence from close political       
control than is generally enjoyed by    
government agencies4 ,these same        
features frequently prompt governments  

in developing countries to establish    
separate juridical entities as the      
vehicles through which to obtain the    
financial resources needed to make      
large-scale national investments4  7#c7 
,because government instrumentalities   
established as juridical entities       
distinct and independent from their     
sovereign should normally be treated as 
such1 courts have accorded them a       
presumption of independent status for   
purposes of assessing jurisdiction under
 the ,foreign ,sovereign ,immunities    
,act of #aigf4  7#d7 ,however1 the      
,supreme ,court explained in ,bancec    
that courts have consistently refused to
 give effect to the corporate form where
 it is interposed to defeat legislative 
policies4 ,as a result1 courts will     
refuse to presume an instrumentality's  
independence from a foreign state if a  
corporate entity is so extensively      
controlled by its owner that a          
relationship of principal and agent is  
created or respecting the corporate form

 would work fraud or injustice4         
,transamerica ,leasing1 ,inc4 v4 ,la    
,republica de ,venezuela1 #bjj ,f4#c;d  
#hdc1 #hdh-di 7,d4,c4 ,cir4 #bjjj74     
7#e7 ,as state instrumentalities have   
developed over time1 their corporate    
structure has commonly become more      
complex4 ,in many cases1 the structure  
of state instrumentalities has also     
become more opaque4 ,at the same time1  
as a result of globalization1 such      
entities are increasingly involved in   
commerce and trade involving companies  
and consumers of the ,united ,states4   
,the result is that companies and       
consumers of the ,united ,states seeking
 to sue a foreign state-owned entity    
under the commercial activity exception 
of the ,foreign ,sovereign ,immunities  
,act of #aigf may struggle to determine 
which juridical entity--for example1    
which member or affiliate of an         
instrumentality--to sue4  7#f7 ,as they 
have grown larger1 more opaque1 and more
 involved in commercial activity with   

companies and consumers of the ,united  
,states1 state instrumentalities have   
continued aggressively to assert that   
they are immune to suit in courts of the
 ,united ,states4  7#g7 ,in some cases1 
courts also have struggled to determine 
the correct juridical entity subject to 
their jurisdiction based on the         
commercial activity exception4 ,in      
others1 courts have rejected claims     
against instrumentalities for failure to
 show an intra-instrumentality alter ego
 relationship4  7#h7 ,in light of the   
sometimes opaque structure of state     
instrumentalities and their increasing  
interactions with companies and         
consumers of the ,united ,states1 it is 
necessary to preserve potential claims  
of people of the ,united ,states against
 such entities based on their commercial
 activities4 ,therefore1 for purposes of
 determining jurisdiction under the     
commercial activity exception to the    
,foreign ,sovereign ,immunities ,act of 
#aigf only1 companies and consumers of  

the ,united ,states should not be       
required to prove an alter ego          
relationship between members of an      
instrumentality to establish            
subject-matter jurisdiction1 as follows4
  #c4 ,amendment ,section #afjc7;d7 of  
title #bh1 ,united ,states ,code1 is    
amended-- 7#a7 by inserting 7#a7 before 
,a2 and  7#b7 by adding at the end the  
following3  7#b7 ,for purposes of       
section #afje7;a77#b71 a commercial     
activity of an agency or instrumentality
 of a foreign state shall be            
attributable to any corporate affiliate 
of the agency or instrumentality that-- 
7,a7 directly or indirectly owns a      
majority of shares of the agency or     
instrumentality2 and  7,b7 is also an   
agency or instrumentality of a foreign  
state4  4