From NML Capital, Ltd. v. Banco Central de law Republica Argentina, 2011 U.S. App. LEXIS 13655 (2d Cir. July 5, 2011):

The question presented is whether certain assets held in the United States in an account of interested non-party-appellant Banco Central de la República Argentina ("BCRA") at the Federal Reserve Bank of New York ("FRBNY") are immune from attachment and execution under the Foreign Sovereign Immunities Act of 1976, 28 U.S.C. §§ 1602 et seq. ("FSIA"). For ease of reference, we refer to those assets at the "FRBNY Funds."

Footnote 1 Although, as a general matter, only a party of record may appeal a judgment, United States ex rel. Louisiana v. Jack, 244 U.S. 397, 402 (1917), a nonparty may appeal in certain circumstances "when the nonparty has an interest that is affected by the trial court's judgment." Hispanic Soc'y v. New York City Police Dep't, 806 F.2d 1147, 1152 (2d Cir. 1986). BCRA is such a party. See, e.g., Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 313 F.3d 70, 81 (2d Cir. 2002) (recognizing the standing of non-party Republic of Indonesia to appeal a judgment that allowed a party to garnish property allegedly owned by the Republic.); United States v. Int'l Bhd. of Teamsters, 931 F.2d 177, 183-84 (2d Cir. 1991) (recognizing the standing of non-party union affiliates whose practices were directly affected by an order approving a settlement between the government and the union). Indeed, plaintiffs do not contest BCRA's standing. See Palmieri v. Allstate Ins. Co., 445 F.3d 179, 188 (2d Cir. 2006) (issues not raised on appeal are treated as waived).

In order to decide whether the FRBNY funds are immune from attachment or execution, we must first decide two questions of first impression in this Circuit: (1) does the exercise of sovereign immunity for "property . . . of a foreign central bank or monetary authority held for its own account" pursuant to 28 U.S.C. § 1611(b)(1)2 depend upon whether the central bank or monetary authority is entitled to a presumption of independence under First National City Bank v. Banco Para El Comercio Exterior de Cuba, 462 U.S. 611 (1983) ("Bancec"); and (2) what is the proper meaning of the phrase "property . . . of a foreign central bank or monetary authority held for its own account" in § 1611(b)(1)? ***

The FSIA "provides the sole basis for obtaining jurisdiction over a foreign state in the courts of this country." Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 443 (1989). Because "subject matter jurisdiction . . . depends on the existence of one of the specified exceptions to foreign sovereign immunity," a court may not exercise subject matter jurisdiction over the property of a foreign state defendant unless that property is subject to attachment under the FSIA. Verlinden B.V. v. Cent. Bank of Nig., 461 U.S. 480, 493 (1983); see also Weinstein v. Islamic Republic of Iran, 609 F.3d 43, 48 (2d Cir. 2010) (discussing a district court's subject matter jurisdiction over a foreign state pursuant to 28 U.S.C. § 1605).

(ii)

The statutory framework for the attachment, arrest, and execution of foreign state property under the FSIA is relatively straightforward. Unless the property of a foreign state, as defined in § 1603(a), is subject to one of the exceptions set forth in FSIA § 1610, it is immune from attachment, arrest, and execution pursuant to FSIA § 1609. See Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993). Moreover, even if § 1610 would otherwise bring foreign state property within the jurisdiction of a court, § 1611(b)(1) "overrides [the] exceptions" in § 1610, see Banque Compafina v. Banco de Guatemala, 583 F. Supp. 320, 321 (S.D.N.Y. 1984), and provides that "the property of a foreign state shall be immune from attachment and from execution, if — (1) the property is that of a foreign central bank or monetary authority held for its own account." 28 U.S.C. § 1611(b)(i); see generally De Letelier v. Republic of Chile, 748 F.2d 790, 793 (2d Cir. 1984) ("[U]nder [FSIA] § 1609 foreign states are immune from execution upon judgments obtained against them, unless an exception set forth in §§ 1610 or 1611 of the FSIA applies.").

(iii)

The District Court's holding was predicated on the conclusion that immunity under § 1611(b)(1) is dependent on a central bank's independence. That is, if a central bank lacks sufficient independence to preserve the presumption of juridical separateness under Bancec, our analysis under the FSIA must, according to plaintiffs, "stop at [§] 1610," see Transcript of Oral Argument 40, because the property of the Republic in the present matter is not entitled to the immunity conferred in § 1611(b)(1). As a result, after "disregarding the formal separateness of the Republic and BCRA and treating the [FRBNY F]unds in the hands of BCRA . . . as the funds of the Republic," EM Ltd., 720 F. Supp. 2d at 302, the District Court determined under § 1610 that (1) the Republic had "made the requisite waivers of immunity as to its property . . . [which] includ[es] the [FRBNY Funds]," id. at 302 (emphasis supplied); and (2) the FRBNY Funds should be considered "property [of the Republic] used for commercial activity in the United States," id. at 303. The District Court declined to conduct an analysis of the FRBNY Funds' immunity under § 1611 because "the [FRBNY Funds were] in fact not the property of BCRA held for its own account, but [were] the property of the Republic." Id. at 304.

We think that the District Court misread the FSIA when it concluded that a court facing the question of whether the assets of a central bank are attachable property under the FSIA must first decide whether the central bank is entitled to the presumption of independence from its parent state under Bancec. We hold that the plain language, history, and structure of § 1611(b)(1) immunizes property of a foreign central bank or monetary authority held for its own account without regard to whether the bank or authority is independent from its parent state pursuant to Bancec. If foreign central bank property is immune from attachment under § 1611(b)(1), the fact that "a relationship of principal and agent [has been] created" between the foreign state and its central bank under Bancec is irrelevant, see Bancec, 462 U.S. at 629. *** [F]oreign central banks are not treated as generic "agencies and instrumentalities" of a foreign state under the FSIA; they are given "special protections" befitting the particular sovereign interest in preventing the attachment and execution of central bank property. EM I, 473 F.3d at 485. Plaintiffs cannot evade this statutory requirement by using Bancec to turn assets that would otherwise be considered property of a central bank held for its own account into property of the Republic that is not entitled to immunity. ***

(iv)

Having concluded that the immunity of the FRBNY Funds under the FSIA turns not on whether the BCRA is entitled to a presumption of independence from the Republic under Bancec, but on whether the funds are property of the BCRA "held for its own account" under § 1611(b)(1), we must now decide whether the FRBNY Funds meet that test.

The definition of the phrase "held for its own account" in § 1611(b)(1) is a matter of first impression in this Circuit. See EM I, 473 F.3d at 485 (declining to "decide which interpretation of § 1611(b)(1)'s 'held for its own account' language is correct"). The parties and amici propose three competing definitions. ***

[O]ne practitioner of central banking law has proposed a modified central bank functions test, pursuant to which "property of a central bank is immune from attachment if the central bank uses such property for central banking functions as such functions are normally understood, irrespective of their commercial nature." Patrikis, Foreign Central Bank Property, 1982 U. Ill. L. Rev. at 277. Conversely, "if an activity is to be regarded as commercial, as distinguished from a central bank activity, it should be an activity of the foreign central bank not generally regarded as a central banking activity." Id. at 277-78. This test was adopted by the district court in Weston, see 823 F. Supp. at 1113, and, more recently, by another district court in Olympic Chartering, S.A. v. Ministry of Indus. & Trade of Jordan, 134 F. Supp. 2d 528, 534 (S.D.N.Y. 2001) ("If the funds at issue are used for central bank functions as these are normally understood, then they are immune from attachment, even if used for commercial purposes.").

We think that this modified test—which combines the "plain language" of the statute and "central bank activities" tests as conjunctive requirements—accords with the text and purpose of §1611(b)(1), and we therefore adopt this test for purposes of determining whether central bank property is "held for its own account." Where funds are held in an account in the name of a central bank or monetary authority, the funds are presumed to be immune from attachment under § 1611(b)(1). This presumption is consistent with the recognition that "FSIA immunity is immunity not only from liability, but also from the costs, in time and expense, and other disruptions attendant to litigation." Kelly v. Syria Shell Petroleum Dev. B.V., 213 F.3d 841, 849 (5th Cir. 2000); see also EM I, 473 F.3d at 486 (district courts must calibrate the "'delicate balancing between permitting discovery to substantiate exceptions to statutory foreign sovereign immunity and protecting a sovereign's or sovereign agency's legitimate claim to immunity from discovery'") (quoting First City, Texas-Houston, N.A. v. Rafidain Bank, 150 F.3d 172, 176 (2d Cir. 1998) (quotation marks omitted))). A plaintiff, however, can rebut that presumption by demonstrating with specificity that the funds are not being used for central banking functions as such functions are normally understood, irrespective of their "commercial" nature.