Embassy bank accounts and State immunity from execution: Doing justice to the financial interests of creditors

Abstract

Embassy bank accounts are among the properties of statesmost widely presentin foreign states. Accordingly, they constitute an ideal target for attachment by creditors. International instruments have largely upheld state immunity from execution regarding bank accounts, however. Likewise, state practice largely – and apparently increasingly – supports state immunity from measures of attachment, by applying a presumption that funds in embassy bank accounts are used for governmental non-commercial purposes. This approach is overly deferential to the state. Instead, it is argued that domestic courts should require that the state, at least partially, discharge the burden of proof regarding the nature (commercial/sovereign) of the funds in the bank account. A failure to discharge this burden should result in a rejection of immunity. Only such an approach adequately balances the interests of states and creditors, and does sufficient justice to the creditor’s right of access to a court. In addition, it is argued that such a balance is also brought about by construing literally general waivers of immunity from attachment, as not requiring an additional specific waiver regarding embassy bank accounts.