Wanted!: A Practical Application of the Foreign Sovereign Immunities Act to Foreign Reward Offers

Abstract

In 1976, Congress sought to codify the application sovereign immunity with the passing of the Foreign Sove-reign Immunities Act (FSIA). As foreign governments began to routinely act as participants in international commerce, Congress intended the FSIA waive sovereign immunity where 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 American 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 11th 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 con-tracts, even when offered by a foreign government and en-tered 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.