Immunity of foreign Central Banks: a comparison between the legislations in Argentina and China

Alexis Rodrigo Laborías

Resumo:Nas últimas décadas, um dos assuntos mais debatidos no referente à imunidade dos Estados estrangeiros é o grau de defesa que tem que ser reconhecido aos órgãos estaduais independentes, incluindo os bancos centrais ou autoridades monetárias equivalentes. A Argentina e a China não adoptaram as mesmas medidas em relação à aplicação das regras da imunidade soberana: enquanto a Argentina adotou a teoria restritiva, a China ainda adere à doutrina tradicional, rejeitando o exercício da sua jurisdição, sem o consentimento do Estado estrangeiro. Embora a existência dessas diferenças, os dois países adotaram normas semelhantes em relação aos bancos centrais estrangeiros e as suas reservas monetárias, a China no ano 2005 e logo a Argentina no ano 2014. Nesse sentido, o artigo descreve primeiramente o quadro geral do foco argentino no relativo ao princípio da imunidade soberana; e segundamente, faz um analises e posterior comparação da referida legislação, com o fim de estudar a compatibilidade e validade que a mesma possui no direito internacional.

Palavras-chave: Direito Internacional. Imunidade do Estado estrangeiro. Bancos centrais. Reservas monetárias. Imunidade de Execução.

Abstract: During the last decades, one of the most debated aspects of State immunity has been the degree of this defence recognized to separate governmental agencies, among them the Central Banks or similar monetary authorities. Argentina and China followed a diverse path on the rule of sovereign immunity: while the former embraces the restrictive approach, the latter still adheres to the traditional doctrine, rejecting to exercise its jurisdiction without a waiver by the foreign State. Despite these differences, they enacted similar regulations concerning foreign Central Banks and its monetary reserves, first in China (2005) and more recently in Argentina (2014). In this regard, firstly this article describes the general framework of Argentina’s restrictive approach to the principle of sovereign immunity, and secondly, it analyses and compares the above mentioned legislations in force in both countries, with the aim of studying the compatibility between them and its appropriateness within the framework of international law.

Keywords: International law. Foreign State immunity. Central Banks. Monetary reserves. Immunity from execution.

Resumen: En las últimas décadas, uno de los aspectos más debatidos de la inmunidad de los Estados extranjerosfue el grado de dicha defensa que debe reconocerse a las agencias estatales independientes, entre ellas los Bancos Central o autoridades monetarias equivalentes. Argentina y China siguieron caminos diferentes respecto de la regla de la inmunidad soberana: mientras que Argentina adopta un enfoque restringido, China todavía adhiere a la doctrina tradicional, rechazando el ejercicio de su jurisdicción sin el previo consentimiento del Estado extranjero. A pesar de estas diferencias, ambos países aprobaron similares regulaciones respeto de los Bancos Centrales extranjeros y sus reservas monetarias, primero en China (2005) y luego en Argentina (2014). En este sentido, este artículo describeen primer lugar el marco general del enfoque argentino sobre el principio de la inmunidad soberana; y en segundo lugar, analiza y compara las legislaciones antes mencionadas con el objetivo de estudiar su compatibilidad y su validez para el derecho internacional.

Palabras-clave: Derecho Internacional. Inmunidad del Estado extranjero. Bancos Centrales. Reservas monetarias. Inmunidad de ejecución.

Sumário:Introduction. 1. The Argentine standpoint regarding the immunity of foreign States.  2. Immunity of foreign Central Banks. 2.1. General considerations. 2.2. Immunity from jurisdiction. 2.3. Immunity from attachment and execution. 2.4. The principle of reciprocity. 2.5. The problematic implementation through agreements. Conclusion.


The People’s Republic of China and the Argentine Republic normalized their diplomatic relations in 1972, when the latter recognized the authorities in Beijing as the sole legal Government of China.[1] During the following three decades, they concluded approximately 50 agreements, dealing with a broad variety of subject matters. In contrast, the signature of treaties notably increased its pace since 2004, reaching nowadays almost 120 bilateral texts.[2]

Specifically in the last four years, China and Argentina entered into a new round of negotiations in several fields of reciprocal interest, including cooperation on the pacific uses of outer space, nuclear technology, foreign trade, extradition, economic development and investments. Among these, one of the most interesting topics in the bilateral agenda was the proposal to exchange part of the monetary reserves in both Central Banks, allocating them in each foreign territory. In this way, the two countries could have an alternative destination to place their reserves, instead of delivering them to the traditional international financial centers, as the United States of America, the United Kingdom or Switzerland.

As China had already passed a Law regarding this topic,[3] the Argentine Executive Power urged to have a similar statute. Additionally, the South American country sought to render its opinion regarding the independence of a monetary authority and the immunity enjoyed by its reserves, in the light of the controversy before the courts of the United States and the attachments suffered by the national Central Bank.[4] Consequently, a bill was introduced on June 25, 2014, only a couple of weeks before the Chinese President travelled to Argentina to conclude several bilateral agreements. This bill was quickly accepted by the Senate and the House of Deputies, and was passed as Law No. 26,961 in theearly days of August.[5]

In this respect, the main objective of this article is to make some comments upon this Argentine statute, within the general framework of the country’s perspective regarding the immunity of foreign States, and compare it with the Chinese equivalent regulation, analyzing its compatibility and appropriateness with international law.

1. The Argentine standpoint regarding the immunity of foreign States

The practice of the Argentine Republic concerning the immunity from jurisdiction and execution of a foreign State can be analyzed from two different but concurring aspects: the legislative regulations and the case-law perspective.[6] The primary source to understand the participation of foreign States before Argentine courts is laid out in the National Constitution, as Article 116 provides,“The Supreme Court and the lower courts of the Nation are empowered to hear and decide (…) actions arising between (…) one province or the inhabitants thereof against a foreign state or citizen.” In a complementary fashion, the abrogated Civil Code declared in Articles 34, 35 and 42 that foreign States were regarded juridical persons under the Argentine law, with their corresponding rights and obligations; they were entitled to go to trial to defend those rights, and its assets could be subject to enforcement actions.[7]  These general provisions were interpreted by the Argentine Supreme Court as allowing claims against foreign States, provided the principle of sovereign immunity was respected.[8]  It is important to highlight that neither the National Constitution nor the Civil Code make any express reference to this principle, which was inferred from customary international law by the local courts, each time a specific controversy arose.[9]

The first legislation regarding this topic was Law No. 13,998 (October 1950), later abrogated and replaced by Decree-Law No. 1,285 (February 1958). The relevant passage in the aforesaid Law is Article 24, section 1, paragraph 2, which provides that no lawsuit shall be brought against a foreign State without prior consent given by its diplomatic representative accredited in Argentina.[10] This strict rule was mitigated in October 1963, with the passing of Decree-Law No. 9,015, stipulating the possibility for the Executive Branch to declare the lack of reciprocity regarding a particular foreign State, in the event a lawsuit against Argentina was accepted in those foreign courts.[11] To this day, this legal tool has never been used by the Argentine Government.

In May 1995, Law No. 24,488 was enacted to regulate the Jurisdictional Immunities of Foreign States before Argentine Courts.[12] This Law grants the above mentioned immunity as a general principle, limiting it in eight situations, which cover both the traditional exceptions (express waiver, counterclaims) and the modern trends in international law (commercial or industrial activity, labour matters, injuries and damages).[13] Law No. 24.488 also includes some procedural rules, as well as the possibility to admit in the judicial proceedings a brief of amicus curiae by the Ministry of Foreign Affairs and Worship, which is not mandatory for the tribunal intervening.

As for the case-law, three different periods can be identified, which follow in a relative pace the legislative evolution.[14] In a first period (roughly, between the early decisions by the Supreme Court in the middle 18th century, up to 1950) the tribunals accepted the sovereign immunity rule, regarding it as an elementary principle of the law of Nations.[15] Additionally, in some judgments a reference was made to the commercial activity of the foreign State, by then a developing theory in international law.[16]The second period spans between 1950 and 1993, within the framework of Law No. 13.998 and Decree-Law No. 1,285/1958.The Supreme Court regarded the immunity as an almost inexpugnable principle, with the only limitation of the express waiver given bythe foreign State’s diplomatic representative. Although some lower courts in the Judicial Branch tried to diverge this position, the Supreme Court was very strict in this topic: without acceptance of the Argentine jurisdiction the lawsuit ought to be dismissed.[17]

The third period starts in December 1994, when the Supreme Court shifted its previous opinion in the now famous Manauta controversy.[18] In the early ‘90s, some former local employees of the Embassy of the Russian Federation filed a lawsuit, accusing the foreign State of avoiding the legal obligations arising from their labour contracts. Having sent the Embassy a notification to accept the Argentine jurisdiction, and after some months with no answer, the lower court and the Appeals Chamber dismissed the claim. In so deciding, the judges considered that the Russian Federation was implicitly rejecting the waiver, thus benefiting from the principle of sovereign immunity. However, the Supreme Court reversed the decision invoking a change in the customary rule of the jurisdictional immunities of foreign States. The Tribunal stated that the general principle, as laid out in Decree-Law No. 1,285/1958, should be understood within the framework of international law, and though the local regulations were the same, international customary law had changed. After citing State practice, international instruments, case-law and doctrine from different countries, the Supreme Court decided that the current customary rule prevented a respondent State to enjoy immunity in labour cases, where no sovereign activities were involved. Accordingly, it decided that the trial ought to be held, accepting the jurisdiction of the Argentine courts in this type of controversy.[19]

Briefly, it can be stated that twenty years after the decision in the Manauta case and the passing of Law No. 24,488, the restrictive approach for a State’s jurisdictional immunity is a well established principle in Argentina.[20]

On the contrary, until 2014 there were no regulations for the immunity from attachment or execution. The case-law in Argentina on this issue, limited in number,[21] is coherent with the principles of customary international law.[22] In that regard, both an attachment prior to the trial and the enforcement of a final judgment should be considered as an exceptional circumstance, as this type of immunity is also regarded by the Argentine courts as a general principle. The claimant has the burden of proof concerning the characteristics of the assets to be attached, avoiding those connected with a government non-commercial purpose.[23]

It is important to stress that in past contentious cases, the Argentine Supreme Court decided that no enforcement action could be taken against the specific assets involved, among them, an embassy’s building or a bank account. However, the Tribunal never mentioned that those measures of constraint were absolutely forbidden in Argentina

In this regard, the passing of Law No. 26,961 introduces an innovative component in the local legal framework, even implicitly recognizing the possibility to attach foreign Central Banks’ assets, under conditions of reciprocity. As will be explained further on, this regulation must be interpreted in a complementary way to the general rules on State immunity, to avoid erroneous conclusions about its possible extension to any foreign property located in Argentina.

2. Immunity of foreign Central Banks

2.1. General considerations

The bill that became Law No. 26.961 was justified by the Executive Branch as part of a deal with China to increase the bilateral economic and commercial cooperation, as well as having an additional source of international financing.[24] Analyzing the legislative process’ time-line, the urgency of the Argentine Government can be appreciated, and this led to the bill’s confusing phrasing and misleading articles. The modifications proposed in the Senate made some improvements but, at the same time, introduced other mistakes. The outcome is a Law with a brief unintelligible text as well as controversial when compared to the local regulations already in force regarding the jurisdictional immunity of foreign States.

The 2005 Chinese Law fulfilled a very particular purpose, only similar to the Argentine statute from the point of view of a political and economic necessity. Until that year, China did not have any specific stipulation on sovereign immunities and was considered a supporter of the traditional rule, as the only accepted exception was a waiver by the defendant State.[25] According to WANG (1999, p. 168):“From the Chinese point of view, State immunity was utilized by other countries as a shield to protect their sovereignty while at the same time it was used as a sword to impose imperialism on the comparatively weaker countries. Therefore, it was quite natural for China to adhere to the principle of absolute State immunity.”[26]

When Hong Kong reunited with China in 1997, the existing regulation on this topic, the 1978 UK State Immunity Act, ceased to be in force in that territory. As commented by ZHU (2007, p. 74), the Chinese Government considered the importance of keeping Hong Kong as a reliable destination for international investments (including foreign Central Banks’ reserves), as well as offering this protection also in mainland China and Macao.[27] Consequently, the Law on Judicial Immunity from Compulsory Measures Concerning the Property of Foreign Central Banks served these purposes, embracing an enhanced defence only limited by the concept of reciprocity. 

Only a month before this Law was approved, another political and juridical decision was taken in this field: China signed – but did not ratify- the UN Convention in September 2005. This international instrument, not yet in force, considers the immunity from jurisdiction as a general principle (Article 5), limiting it with a number of exceptions (Articles 7 to 17). As regards the measures of constraint, it is notoriously conservative, as they are only allowed with the respondent State’s express consent (Article 18) or, in the case of post-judgment measures, if the specific assets are in use or intended for use by the State for other than government non-commercial purposes (Article 19). Additionally, Article 21, section 1, paragraph c), expressly stipulates that the property of a Central Bank shall not be considered to serve a commercial purpose.[28] In the opinion of QI (2008, p. 330), the signature of the UN Convention “(…) though seemingly inconsistent with the traditional position of China on State Immunity, signals a rational and timely adjustment and forecasts an emerging policy shift.” Nevertheless, later case-law proved that the traditional position remained unaltered. In 2011, the Hong Kong Court of Final Appeal decided the Congo v. FG Hemisphere controversy, arising from measures of constraint to enforce arbitral awards. In the judgment, the majority of the Court regarded the immunity as an absolute rule, unless a waiver was given by the respondent State.[29]  Consequently –and despite the fact that the minority in the above mentioned case adopted the opposite view regarding the territory of Hong Kong- in China there seems to be no departure from the traditional rule of immunity for the time being.

2.2. Immunityfromjurisdiction

After these general considerations, and starting the analysis with the Argentine regulation, Law No. 26,961 states in Article 1:

“It is hereby established that foreign Central Banks or other foreign monetary authorities are immune from the jurisdiction of Argentine courts except for the following cases: a) Express written consent in an international treaty, a contract, an arbitration agreement, or by means of a written statement after the initiation of a judicial or arbitral proceeding; b) Counterclaim arising out of the same legal relationship or the same facts as the principal claim; and c) When the claim is based on an activity beyond the scope of its specific functions and the jurisdiction of the Argentine courts arises from the alleged contract or international law.”

This first Article establishes the general rule of immunity from jurisdiction of foreign Central Banks or other monetary authorities, along with three exceptions. The logic of the provision is to preserve the jurisdictional immunity as a right for the foreign entity. Certainly, this privilege can be waived.[30] It should also be noted that Article 1 only applies to immunity from jurisdiction, not from execution or attachment, which is mentioned in the second Article of this Law. In a preliminarily perspective, it is evident that the legislative technique is slightly incorrect. In accordance with Law No. 24,488, the wording should have simply mentioned that Central Banks are immune from the jurisdiction of the Argentine courts as provided by this Law. In that way, a second article could have been entirely devoted to the three exceptions, in a more orderly fashion.

From the point of view of a judicial proceeding, considering the immunity as a general rule implies that the plaintiff must prove the existence of a valid exception to allow the intervention of the local jurisdiction.[31] In addition, these three exceptions should be considered as an exhaustive list. The first one arises when the defendant has expressed its consent to the jurisdiction of the Argentine courts, either before or after a dispute has taken place.[32] The waiver may be implemented in a treaty, a contract or an arbitration agreement. Furthermore, if the foreign entity is sued in the judicial or arbitral sphere, it can accept such dispute resolution forum through a written statement, apart from any existing obligation.[33]The second exception takes place when the respondent Bank files a counterclaim based on the same legal relationship or the same facts as the principal claim.[34] As in the previous case, the rationale for this exception is the waiver given by the foreign Central Bank, implicitly derived from the new application, which must have certain connection points with the main lawsuit.

The third exception is perhaps the most troublesome because, unlike the preceding ones, is not directly linked to an explicit or implicit waiver by the foreign entity. This exception provides that the procedural defence may not be invoked when the claim is connected with an activity beyond the scope of the specific functions of the Central Bank, and the jurisdiction of the Argentine courts arises from the contract alleged or international law. It is worth noticing that the Law’s phrasing makes a reference to the functions performed by the agency in question, but not to the commercial nature of such acts, as it is usual in the provisions of national and international regulations concerning State immunity.[35]

If a particular controversy arises, it should be necessary to identify the specific functions of the respondent entity, and from that starting point determine whether the activity in question goes beyond the habitual tasks or may be inconsistent with them. The specific powers of each Central Bank undoubtedly arise from its organizational statute or other related provisions. To some extent, these functions are described in Law No. 26,961, Article 2, first paragraph, and can be regarded as a court’s guide for the purposes of interpreting this exception. However, its applicability may give rise to certain difficulties. For instance, if a foreign Central Bank recruits local staff to meet the needs of a bureau in the Argentine territory, a labour lawsuit should be dismissed, since there is a link between the employment contract and the entity's functions. In opposition, the same claim could be accepted if brought against a foreign State, who cannot invoke immunity when sued for labour matters by Argentine nationals or residents in the country, under contracts signed in Argentina or abroad, and they cause effects within the nation’s territory (Law No. 24,488, Article 2, section d).

Another difficulty connected with the carrying out of commercial acts can arise, e.g., with the procurement of goods or services. According to Law No. 24,488, Article 2, section c), a foreign State cannot invoke immunity when sued for performing commercial activities. When interpreting this provision, the Argentine Supreme Court determined that a commercial activity should be defined taking into account the nature of the act in question.[36] However, if the foreign Central Bank is sued for carrying out certain acts of a commercial nature, it could invoke the fulfilment of its specific functions to be granted the immunity defence.

From the two examples above it can be appreciated that Law No. 26,961 created a special regime more favourable to this particular foreign defendant, which is different –and to some extent, even contradictory- to the general situation regarding foreign States.

The second requirement for this exception is that the jurisdiction of the Argentine courts arises from the specific contract or international law. Firstly, notice should be taken that if a waiver is given in a contract, the assumption would be similar to the one discussed in the first exception to this Article. The second possibility takes place if the jurisdiction of the Argentine courts arises from international law. While interpreting the equivalent provision in Law No. 24,488, Article 2, section c), the Supreme Court stated:“(...) general international law only imposes as a principle the existence of a reasonable connection between the jurisdiction of a State and the proceedings or controversy, without specifying such connection. In that regard, international law imposes the principle of reasonableness of contacts, allowing either the conventional or municipal systems of private international law to determine the individual connections.”[37]

This means that, for the purposes of this exception, and in the absence of a contract between the parties, the tribunal must determine whether international law renders an authorization to settle the merits of the controversy, seeking a reasonable connection with the contentious case.

This first Article of the Argentine Law has no equivalent in the Chinese regulation. As will be commented further on, the latter only deals with immunity from attachment or execution. Consequently, the rule of jurisdictional immunity is subject to the specific interpretation given by the Chinese courts in each particular conflict. According to QI (2008, p. 326): “(…) China’s position on State immunity has been consistent, characterized by its general adherence to the absolute doctrine and its occasional acceptance of exceptions to immunity subject to its voluntary consents to reciprocal or mutual commitments under different regimes of agreement.” The evidence to support this appreciation is drawn from “(…) discrete domestic legislations, treaty practice and cases engaging China.” (QI 2008, p. 316).[38]

In this regard, the differences between both countries are evident, as Argentina explicitly regulated the traditional rule on jurisdictional immunity in 1950,the courts adopted the restrictive approach in 1994 and the specific legislation was passed in 1995.

2.3. Immunity from attachment and execution

The second Article of the Argentine Law, consisting of two distinct paragraphs, reads as follows:

‘For the purposes of this Law, a foreign monetary authority shall be understood as the foreign governmental agencies responsible for designing, analyzing, enforcing and adopting the necessary credit and exchange measures for regulating currency circulation and liquidity of the foreign exchange and financial market, as well as ensuring the normal functioning of internal and external payments of the economy, guarding the stability of the currency value. The assets of a foreign Central Bank or a foreign monetary authority enjoy immunity from execution and/or attachment in Argentine courts regarding any enforcement action that may affect the aforesaid assets.’

The first paragraph describes the typology of a “foreign monetary authority”, with the focus on the usual functions of these entities. In a specific lawsuit, it is the judge’s responsibility to determine whether a defendant entity fulfils this category.[39] Otherwise, the general scheme in Law No. 24,488 should be applied, provided the foreign entity can be regarded as part of the State’s organization. 

The Chinese Law has a similar but less descriptive phrasing in Article 2, first paragraph,stating that, “For the purposes of this Law, a foreign central bank means the central bank of a foreign country and of a regional economic integration organization, or the financial administration institution exercising the functions of a central bank.”[40] The second paragraph adds another description, which has no equivalent in the Argentine regulation:“For the purposes of this Law, the property of foreign central banks includes the cash, notes, bank deposits, securities, foreign exchange reserve and gold reserve of the foreign central banks and the banks’ immovable property and other property.” The specific functions are not described, so the intervening Chinese court has a wide range of possibilities while considering whether the defendant agency should be granted the procedural defence under this Law. As in Argentina, the opinion of the Executive Branch on the subject matter should be quite relevant to reach a judicial decision. A particularly interesting detail about this Article is the extension of the immunity to the monetary authority of a regional economic integration organization.[41]

Continuing the analysis of Law No. 26,961, the second paragraph in Article 2 is the centerpiece of the whole regime, but unfortunately the wording and location in the text does not help to determine that feature. According to the explanation of the Executive Branch, as delivered to the National Congress with the original bill, the Government’s major concern was to set a clear rule for the property of foreign Central Banks, which would allow Argentina to be regarded as a safe destination for investments.[42] Therefore, it is stipulated that the assets of these entities cannot be affected by any kind of enforcement measures, either before a lawsuit is initiated or after a judgment is issued.

Certainly, it is reasonable to interpret that any foreign Central Bank enjoys in Argentina, as a minimum standard, the same protection due to its own State. Nevertheless, while not having a specific local regulation to enable the protection of a foreign State’s property, the courts can interpret customary law and possibly decide that a specific asset can be attached, if it is not devoted to a government non-commercial purpose. On the contrary, the provision in Article 2, second paragraph, mentions that no enforcement action can be taken against the specific assets involved. Thus, a wider and almost absolute immunity from execution is recognized for these foreign agencies.

As it appears clearly from a textual interpretation, the above mentioned rule has no exceptions. Nonetheless, it can be presumed that through an express waiver the foreign Central Bank can accept both the local jurisdiction and specific measures of constrain. It is a right for a governmental entity either to benefit from that defence or to waive it under particular circumstances.

The interaction between immunity from jurisdiction, as regulated in Article 1 and that of execution just described, has as consequence that a proceeding against a foreign Central Bank can be initiated and continued until the delivery of a judgment. However, a court’s final decision may not necessarily result in an enforcement action to obtain financial compensation. The above mentioned does not mean that this kind of judgment is simply a written document without legal value. The intervening judicial authority may require payment, without performing specific acts of enforcement, in addition to reporting the decision to the Central Bank of the Argentine Republic and the Ministry of Foreign Affairs and Worship, to suggest the use of political and diplomatic means of compliance with the judgment.[43]

With a different phrasing, the Chinese Law establishes the same principle in Article 1:

“The People's Republic of China grants to foreign central banks’ property the judicial immunity from the compulsory measures of property preservation and execution, except where a foreign central bank, or a government to which a central bank is subordinate, gives up such immunity in writing, and where the property which is designated to be used for property preservation and execution.”

As can be appreciated, the immunity from execution is granted as a general principle and according to ZHU (2007, p. 76):“(…) the Chinese Courts, including the courts in HK SAR [Hong Kong Special Administrative Region] and Macao SAR, should not take any judicial measures of constraint in the whole civil proceedings, in whatsoever expressions used, such as attachment, injunction, arrest, order or execution, and in whatsoever stages, whether the pre-judgment stage or the post-judgment stage.”[44]

This broad principle is limited by two exceptions. The first one is the classical waiver, which must be expressed in writing. This means that the jurisdiction of the Chinese courts can be granted in an international agreement, a contract or even in a specific written statement. The second exception is yet another manifestation of the consent of the defendant foreign Central Bank, by designating certain assets to be affected by future enforcement actions.[45]

2.4. Theprinciple of reciprocity

The third Article of Law No. 26,961 introduces the concept of reciprocity, as a specific limit to the immunity granted:

“The immunity referred to in the preceding Article, shall apply to the same extent as the assets of the Central Bank of the Argentine Republic, in its capacity as national monetary authority, enjoy immunity under the law of the country of origin of the foreign Central Bank or foreign monetary authority concerned.”

The effect of Article 3 is to limit the principle in Article 2 to specific situations where strict reciprocity is granted; that is to say, to the same extent as the assets of the Argentine Central Bank are protected in a foreign State. As the regulations in Article 3 applies only to the ‘preceding Article’, this would reaffirm that the jurisdictional immunity in Article 1 is recognized as a right for the foreign agencies involved, with the three exceptions already explained, and without the need of reciprocity considerations. 

The use of reciprocity is a practical tool in a State’s foreign affairs, provided it is used wisely and in a limited fashion. As previously mentioned, this concept was included in Decree-Law No. 9,015/1963, as a way to add another limit to the principle of State immunity. In fact, until the passing of Law No. 24,488, the use of reciprocity was the only exception which did not involve the foreign State’s acceptance of the jurisdiction of the Argentine courts. This tool was never used by the Executive Branch, becoming only a theoretical proposition.

It must be reaffirmed that a reasonable interpretation of Articles 2 and 3 renders the conclusion that a foreign Central Bank is granted, as a minimum standard, the same immunity for its assets as the one enjoyed by the property of any foreign State. On that basis, a wider immunity from attachment and execution can be granted, on conditions of reciprocity. Besides, if the assets of the national Central Bank are subject to enforcement measures in a foreign country, Argentina can adopt the same kind of measures to the property of such foreign counterpart.

In the Chinese Law, the challenging topic of reciprocity is expressly covered by its Article 3:

“Where a foreign country grants no immunity to the property of the central bank of the People's Republic of China or to the property of the financial administration institutions of the special administrative regions of the People's Republic of China, or the immunity granted covers less items than what are provided for in this Law, the People's Republic of China shall apply the principle of reciprocity.”

In this perspective, the principle under analysis is applicable as a consequence of a previous act by a foreign State, which affects the property of the Chinese Central Bank or the other institutions mentioned. That previous act should not necessarily be understood as an illegal one, but simply as the local implementation of the rule of immunity from attachment, which can be more limited in certain jurisdictions than in others. According to ZHU (2007, p. 80), this provision in the Chinese Law,“(…) will not be problematic for the States with the same level of protection, such as the UK or possibly the USA. However, it might give rise to disputes with the States which provide the protection below the Chinese level, in particular those States taking the restrictive immunity stance.”

On this matter, it is evident the special interest of the Argentine Government to avoid any possible divergence with the Chinese Central Bank, and to be included in the limited number of jurisdictions granting a special protection to those foreign agencies.

2.5. Theproblematicimplementationthroughagreements

The last provision in Law No. 26,961 is Article 4, which states,“The Central Bank of the Argentine Republic will sign the relevant international instruments within the framework of its own rules and the powers conferred in this Law.” The Chinese Law has no equivalent regulation.

This Article grants the Argentine Central Bank the capacity to conclude international treaties in a limited fashion, that is to say, only in connection with the purposes of the Law. The original bill stipulated that those instruments were a way to implement the law’s regulations. However, when the bill was modified by the Senate that explanation was suppressed, with the unfortunate result of a confusing phrasing, as it is not clear which is the purpose of those treaties.

If Article 4 is interpreted textually, and considering the original bill, it would seem that any immunity (either jurisdictional or from execution and attachment) is only granted once the Argentine Central Bank signs a treaty with a beneficiary counterpart. Thus, foreign Central Banks, despite being part of a State’s organization, would have no immunity unless an agreement is concluded. This interpretation clearly implies a violation of customary international law and Law No. 24,488, both of which grant jurisdictional immunity as a general principle and subject to certain exceptions.

With the premise of avoiding an illogical result, Article 4 must be interpreted in a coherent fashion with the other three clauses in Law No. 26,961. In that respect, this Law should be read as a specific regime, which has innumerable links with the general provisions in Law No. 24,488. Consequently, it can be established that the immunity set forth in Article 1 is a general rule, partially consistent with Articles 1 and 2 in Law No. 24,488, and is granted without the need of any specific agreement. The substantial difference between a foreign State and its Central Bank can be found in the exceptions to the general rule, which might allow the jurisdiction of the Argentine courts. 

As for the immunity from execution, the solution must be a similar reasonable one. It should be remembered that, prior to the enactment of Law No. 26,961, Argentina did not have any specific legislation on this topic. In each lawsuit that was raised, national courts applied customary international law, respecting the foreign State right to its property. Consequently, the assets of a foreign Central Bank in Argentina also enjoy the same level of protection, even without signing an agreement. If a controversy arises, the principle of reciprocity should be taken into consideration to determine the extent of that protection. Accordingly, the Executive Branch can impose a limit to the immunity enjoyed by a foreign State (Decree-Law No. 9,015/1963) or a Central Bank (Law No. 26,961, Article 3).

In addition, a wider immunity can be granted if a treaty is signed between the Argentine Central Bank and a foreign institution, as mentioned in Articles 2 and 3 of Law No. 26,961. This international agreement will introduce a difference between the State’s assets, which can exceptionally be attached if devoted to a commercial non-governmental purpose, and those belonging to a Central Bank, which could be protected from any enforcement action that may affect them.


As mentioned in the previous pages, Argentina had two concrete interests which justified the passing of Law No. 26,961. Firstly, the increased cooperation with China and the necessity to facilitate the arrival of investments from the Asian country. In that regard, the local regulation was an important piece of that legal machinery, as required by the previous Chinese Law on this topic and the fulfilment of the reciprocity requirement. Secondly, Argentina issued that Law to stress a difference with the United States of America, confirming its own perspective concerning the immunity from enforcement measures granted to the assets of a Central Bank.[46]

As for the articles in Law No. 26,961, they are evidently inaccurate in different aspects and even contradictory within the framework of the country’s adherence to the restrictive approach of immunity from jurisdiction. Argentina is in a delicate situation, when considering the still pending conflict that arose after the default of the external debt in 2002 and the attempts by debtors to attach any assets available. Thus, enabling a restrictive approach to the situation of foreign property in Argentina would allow the applicability of the same doctrine to the national assets allocated in different countries. Hopefully, the limited scope of Law No. 26,961 should prevent an extensive interpretation. In any case, the Argentine advance on this risky topic is limited by the concept of reciprocity, which can be evaluated by the Executive Branch in order to decide the adoption of countermeasures in the same area.

From the point of view of China, the passing of its own Law also reflected a particular interest, namely the existing situation in Hong Kong and also as a provision for other future financial centers. This decision can also be appreciated as a significant dose of pragmatism, as part of the country’s effort to participate in the world economy. As SUCHARITKUL (2005, p. 26) comments, “But China is, after all, Chinese and, as such, appears to be much more pragmatic and practical, as well as flexible and enduring, than anyone could have imagined.” Besides the political or economic motives of this decision, it also represents a confirmation of the immunity of sovereign States and its agencies as a general rule, and the express waiver as the only limit to that principle.

In a theoretical perspective, both regulations are compatible and will serve the purpose of enhancing bilateral financial cooperation. In fact, the Argentine Law sought that compatibility and was clearly drafted following the phrasing of the Chinese regulation. Probably, in a near future the two countries (or its Central Banks) will conclude a bilateral agreement to perfect their relationship in this area, complementing the already in force Currency Swap Arrangement.

As previously stated, a possible contradiction may arise in specific proceedings in Argentina, between the general rules on State immunity and the specific ones for Central Banks. In this regard, a lawsuit against China could be accepted on the grounds of the applicability of the restrictive approach (e.g., a controversy arising out of labour contracts or commercial transactions). On the contrary, much of the undertakings of China’s Central Bank will be protected, unless it carries out an activity beyond the scope of its specific functions.

As a final remark, it must be mentioned that it is still under debate whether this protection should be granted in every State, on the basis of a customary rule, or only in the territory of those with a local regulation.[47] Along with FOX and WEBB (2012, p. 523), it can be mentioned that there is no general acceptance for this enhanced protection. For the time being, local legislation like the Argentine and Chinese laws can be considered as being in accordance with international law, as there is no general rule that prohibits granting a stronger protection to Central Banks. Consequently, it is a right for the beneficiary foreign agency to apply for this defence in case of controversy.

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* Alexis Rodrigo LABORÍAS. Lawyer and Mg. in NationalDefense. Professor of Public International Law, Universidad de Buenos Aires (UBA) [InterimAdjunct] and Universidad Argentina de la Empresa (UADE) [Regular Adjunct], Buenos Aires, ArgentineRepublic. Researcher in thefield of International Law and ForeignInvestments at Instituto de Ciencias Sociales y Disciplinas Proyectuales (INSOD), Facultad de Ciencias Jurídicas y Sociales (UADE). Theviewsexpressedherein are those of theauthor and do notreflecttheviews of anypublicorprivateinstitution. Email: /
[1] Joint communique on the establishment of diplomatic relations (Bucharest, February16, 1972).
[2] The records were consulted in the “Digital Library of Treaties”, administered by the Argentine Ministry of Foreign Affairs and Worship, <>(Accessed  January 11, 2016).
[3] Law of the People's Republic of China on Judicial Immunity from Compulsory Measures Concerning the Property of Foreign Central Banks. It was adopted at the 18th meeting of the Standing Committee of the Tenth National People's Congress, 25 October 2005, <>(Accessed  January11, 2016).
[4] See EM Ltd., NML Capital Ltd. and others v. The Republic of Argentina (US District Court - Southern District of New York, April 7, 2010, and US Court of Appeals for the Second Circuit, July 5, 2011 and August 31, 2015). A synthesis of these proceedings and the arguments laid out by the claimants and the respondent country can be seen in the “Brief for the United States as Amicus Curiae” presented by the Solicitor General in May 2012, before the US Supreme Court. The subject matter of this controversy had a well-known precedent in 1992 in the case Republic of Argentina v. Weltover, Inc.(504 U.S. 607). Seecommentaries in theArgentine doctrine by ONETTO(1992) and ZUPPI (1992). For US academic writings see DELAUME(1994).
[5] Law on Immunity of foreign Central Banks or other Monetary Authorities. Passed on August 6, 2014, approved the following day by Decree of the Executive Power No. 1300/2014 and published in the Official Gazette on August 8, 2014. The translations from the original texts in Spanish (Argentine legislation, case-law and doctrine) correspond to the author, with the help from Public Translator Andrea Suleta.
[6] It must be borne in mind that Argentina has a civil law legal system.
[7] The Civil Code was in force between January 1871 and August 2015. In the latter date it was replaced by the new Civil and Commercial Code, which also has some regulations concerning foreign States in Articles 141, 146 and 147.
[8] For instance, in two classical judgments in the year 1916: Baima y Bessolino c/ Gobierno del Paraguay (Argentine Supreme Court 123:58, February 26, 1916) and Fisco Nacional c/ MonezCazón, Rodolfo (Arg SC 125:40, December 28, 1916). The numeric reference corresponds to the volume and page of the collection of jurisprudence by the Argentine Supreme Court (in Spanish, Fallos de la Corte Suprema de Justicia de la Nación).
[9] In several decisions the Supreme Court regarded the immunity of foreign States as an elementary principle of the law of Nations. E.g., Fisco Nacional c/ Monez Cazón, Ibarra y Cía. c/ Capitán del vapor español Ibaí(Arg SC 178:174, July 16, 1937) and Ventura, Giovanni s/extradición (Arg SC 311:1925, September 20, 1988).
[10] The still-in-force Decree-Law 1,285 holds the same Article number and a very similar phrasing.
[11] An explanation for this limitative clause can be found in CASTILLO ARGAÑARÁS (2005).
[12] Passed on May 31, 1995, approved (with a partial rejection) by Decree of the Executive Power No. 849/1995, and published in the Official Gazette on June 28, 1995.
[13] An English translation for this Law is included in DICKINSON (2004, pp. 461-468).
[14]According to DEL CASTILLO (2012, pp. 50-52).
[15] See the jurisprudence cited in footnotes 8-9 above.
[16] This phrasing, referred in the rulings with the Latin expression iuregestionis, can be seen in Romay, Antonio c/ Royal Commission on Wheat Supplies (Arg SC 135:259, November 14, 1921) and Ministerio de Marina Mercante de EE.UU. v. DoderoHnos. Ltda. (Arg SC 141:129, July 30, 1924).
[17] In Gómez, Samuel c/ EmbajadaBritánica (Arg SC 295:176, June 24, 1976), the Supreme Court expressly criticized the restrictive approach proposed by these lower courts.
[18]Manauta, Juan José y otros c/ Embajada de la Federación Rusa (ArgSC 317:1880, December22, 1994).
[19] Even though it is misleading by some doctrine and case-law, the passing of Law No. 24,488 was not a direct consequence of the decision in the Manauta case. Two bills regulating the immunity of foreign States were already under debate in House of Deputies as early as 1993, and in December 1994 a combination if these texts was approved. The analysis by the Senate was postponed until May 1995, when it was finally accepted.
[20]For a detailedanalysisonthistopic, thefollowingworksfromtheArgentine doctrine can be consulted: RIZZO ROMANO(1996),FELDSTEIN DE CÁRDENAS y LEONARDI DE HERBÓN (1996), GRACIARENA (2006), and DEL CASTILLO (2012).
[21]Seethe cases Gobierno de la República del Perú c/ Sociedad Industrial y Financiera Argentina S.A. (Arg SC 240:93, February 26, 1958), Blasson, Beatriz c/ Embajada de la República Eslovaca (Arg SC 322:2399, October6, 1999), Obras Sanitarias de la Nación c/ Embajada de la U.R.S.S.(Arg SC 324:1648, May21, 2001) and Manauta, Juan José c/ Embajada de la Federación Rusa (Arg SC 330:5139, December11, 2007).
[22] For the current status of the debate on this customary rule, see YANG (2012, pp. 343-422), and FOX and WEBB (2013, pp. 479-508).
[23] The International Court of Justice considered the following principle as part of customary law: “(…) there is at least one condition that has to be satisfied before any measure of constraint may be taken against property belonging to a foreign State: that the property in question must be in use for an activity not pursuing government non-commercial purposes, or that the State which owns the property has expressly consented to the taking of a measure of constraint, or that that State has allocated the property in question for the satisfaction of a judicial claim (…)”. See Jurisdictional Immunities of the State(Germany v. Italy: Greece intervening), Judgment, I.C.J. Reports 2012, 99, 148. The Court’s decision was based on the phrasing of Article 19 of the United Nations Convention on Jurisdictional Immunities of States and Their Property (further on, the UN Convention).
[24] Although this motivation was not mentioned in the Presidential Message No. 1024 (25 June 2014), which introduced the bill to the National Congress, it was expressly commented in the debate in the Senate by the representatives of the ruling political party. SeeSesiones de la Cámara de Senadores de la Nación (Debates of theSenate), 10 July 2014, pp. 4-5.
[25] For a detailed analysis on the Chinese perspective see HOULI(1987), HUANG and MA (1988), QI (2008) andHANQIN (2012).
[26] In a recent work, this jurist commented that, “From China’s perspective, the doctrine of restricted sovereign immunity has not yet become a rule of international law because only a small number of nations -which by and large do not include developing countries- have adopted it”. See WANG (2015, p. 556).
[27] See also LITTLE(2004).
[28] This particular protection, both in the UN Convention and in national legislations, is criticized by some academic writings for not being representative of customary law or finding its exclusive foundation on a political decision. See CRAWFORD(1983, p. 118) and REMIRO BROTÓNS(2007, p. 1045). On the contrary, when deciding the controversy AIG Capital Partners Inc. v. Republic of Kazakhstan (2005, UK EWHC 2239, Comm), Mr. Justice Aikens commented that, although the UN Convention is not a peremptory norm of general international law, “(...) the grant of immunity to all the property of a State’s central bank is, in the eyes of the international community of States, legitimate.” [par. 80].
[29]Democratic Republic of the Congo and others v. FG Hemisphere Associates L.L. (FACV 5-7/2010). A commentary on this decision in BELL(2011).
[30] In that sense, the idea of an ‘absolute’ immunity is contradictory, as it is a State’s right that can be renounced at any moment. According to DEL CASTILLO (2012, pp.  49-50), and YANG (2012, p. 7).
[31] This procedural rule does not entail a mere passive role for the foreign defendant, until the exception is accepted. On the contrary, it should collaborate with the local court and even make some effort to give evidence supporting the applicability of the general rule of immunity. SeeDEL CASTILLO(2000).
[32] This first exception is consistent with the provisions of Law No. 24,488, Article 2, section a).
[33]Advisory Opinion on the Status of Eastern Carelia, Permanent Court of International Justice, Series B, No. 5 (1923), 27. Possibly, this option will have a clearer effect in the judicial proceedings than in arbitration.
[34] Again, this exception is consistent with Law No. 24,488, Article 2, section b).
[35] The wording “commercial transaction” or “commercial activity”, not strictly linked with the regulations for Central Banks, is included in the following instruments: European Convention on State Immunities (1972), Article 7; UN Convention (2004), Article 2, section c), and Article 10; Foreign Sovereign Immunities Act (US, 1976), Sections 1603(d) and 1605(a)(2); State Immunity Act (UK, 1978), Section 3; Foreign States Immunities Act (Australia, 1985), Section 11; State Immunity Act (Canada, 1985), Sections 2 and 5; Foreign States Immunity Law (Israel, 2008), Sections 1 and 3; Act on the Civil Jurisdiction with respect to a Foreign State (Japan, 2009), Article 8; and Law 16/2015 on privileges and immunities of foreign States (Spain, 2015), Article 9.
[36]Cereales Asunción SRL c/ Administración Nacional de Navegación y Puertos de Paraguay (Arg SC 321:2594, September29, 1998). The Tribunal considered as relevant precedents to interpret Law No. 24,488 in such way the European Convention on State Immunity, the then draft UN Convention, the Inter-American draft Convention on Jurisdictional Immunities of States (1983), the US FSIA and the UK SIA, various foreign case-law (US, Italy and Germany) and one particular work of doctrine (Harvard Research in International Law, Competence of courts in regard to foreign States, 1932).
[37]Cereales Asunción SRL [par. 14].
[38]The writer highlights the debate around the litigation in Jackson v. The People’s Republic of China, which represents a case-study for the position of China as defendant in foreign courts, specifically in the US (Ibid,p. 322). An additional commentary in FEINERMAN(1994).
[39] In this sense, the existence of an agreement between the foreign agency and the Central Bank of the Argentine Republic, under the terms of Law 26,961, Article 4, would serve as a valuable evidence for the intervening court.
[40] According to the definitions in the Argentine and Chinese regulations, the immunity should not be extended to other official banks, either connected with the National Government or its territorial divisions. These banks can be regarded as independent agencies and they deal mostly with commercial transactions. See the case Swiss-Israel Trade Bank v. Government of Salta and Banco Provincial de Salta, as commented by MANN(1973, p. 19).
[41] As the Article does not specify any requirement, it can be applied to those monetary authorities even without the signature of a headquarter agreement between China and the corresponding regional organization.
[42] Presidential Message No. 1024, cited above.
[43] Those were the parameters laid out in the case-law regarding enforcement actions in Argentina (see footnote 21). The Supreme Court decided to demand payment without allowing specific measures of constraint, while notifying the decision to the Executive Branch, in charge of the country’s foreign affairs.
[44]The author uses his own translation of the Chinese Law.
[45] A similar exception is regulated in Articles 18 and 19 of the UN Convention, when a State allocates or earmarks property for the satisfaction of the claim which is the object of a proceeding.
[46] As a way to settle this dispute, Argentina sought to institute proceedings against the US before the International Court of Justice, inviting the defendant to accept the Tribunal’s jurisdiction. See the ICJ Press release No. 2014/25 (7 August 2014) and the corresponding Press release No. 206/2014 by the Argentine Ministry of Foreign Affairs and Worship (8 August 2014). The latter contains the text of the Application in English and French, as well as a Spanish translation.
[47] State signatories of the UN Convention, an instrument not yet in force, can adopt this protective criterion to avoid acts that might be contrary to the object and purpose of this treaty.

Informações Sobre o Autor

Alexis Rodrigo Laborías

Advogado (Universidad de Buenos Aires). Professor de Direito Internacional Público na Universidad de Buenos Aires e na Universidad Argentina de la Empresa (UADE). Pesquisador e autor de várias publicações na área da sua especialidade

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Informações Bibliográficas


LABORíAS, Alexis Rodrigo. Immunity of foreign Central Banks: a comparison between the legislations in Argentina and China. In: Âmbito Jurídico, Rio Grande, XIX, n. 147, abr 2016. Disponível em: <>. Acesso em jan 2017.


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LABORíAS, Alexis Rodrigo. Immunity of foreign Central Banks: a comparison between the legislations in Argentina and China. In: Âmbito Jurídico, Rio Grande, XIX, n. 147, abr 2016. Disponível em: <>. Acesso em jan 2017.