In 1976, Congress sought to codify the application of sovereign immunity with the passing of the Foreign Sovereign Immunities Act (FSIA). As foreign governments began to routinely act as participants in international commerce, Congress intended that the FSIA waive sovereign immunity when a foreign government engages in commercial activity that has a “direct effect” in the United States. This exception permits suits against foreign governments in U.S. courts when there is a breach a commercial contract that directly affects economic interests in the United States. Under U.S. contract law, a binding unilateral contract may form when one party performs the acts requested in an open offer, such as providing the whereabouts of a wanted fugitive in return for a reward. A recent Eleventh Circuit case, Guevara v. Republic of Peru, displayed the court’s inconsistent application of the FSIA’s commercial activity exception to fugitive reward offers, and prohibits the judicial enforcement of these contracts, even when offered by a foreign government and entered into on U.S. soil. The Guevara decision illustrates the unsettled interpretation and application of the FSIA by U.S. courts, and may have very damaging effects on U.S. participation in the pursuit of international fugitives.
Timothy E. Donahue,
Wanted: A Practical Application of the Foreign Sovereign Immunities Act to Foreign Reward Offers,
B.C. Int'l & Comp. L. Rev.