Chinese state entities argue they have 'sovereign immunity' in U.S. courts

[Eugene]

Source: Reuters

World | Wed May 11, 2016 6:31am EDT

Chinese state entities argue they have 'sovereign immunity' in U.S. courts

BEIJING | BY MATTHEW MILLER AND MICHAEL MARTINA

Some Chinese state-owned entities, backed by the key government agency that oversees major state industrial companies, have adopted a controversial defense when they face U.S. lawsuits: You can't touch us because we enjoy sovereign immunity.

Aviation Industry Corporation of China (AVIC), China's biggest state-owned aerospace and defense company, has used the strategy twice, while state-owned China National Building Materials Group Co (CNBM), a state-owned building products company, successfully used it in a case involving allegations that Chinese-made drywall led to health problems for U.S. homeowners.

China's Foreign Ministry in October complained to the U.S. government over attempts by plaintiff lawyers to serve the drywall lawsuit on the State-owned Assets Supervision and Administration Commission (SASAC), which is responsible for 106 government-owned enterprises with 4.7 trillion yuan ($722 billion) in assets, including CNBM and AVIC. The ministry argued in a diplomatic note that U.S. courts have no jurisdiction over suits against a country's "state-owned properties."

The legal argument concerns whether companies controlled by the Chinese government can be protected under the U.S. Foreign Sovereign Immunities Act (FSIA), which was passed by Congress in 1976, even when their U.S. subsidiaries are involved in commercial disputes.

The use of sovereign immunity by Chinese state-owned conglomerates is a reflection of how China's state capitalism and legal regime is increasingly running into conflict with Western regulation and jurisprudence, particularly as the country's overseas investment rapidly grows.

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Read more: http://www.reuters.com/article/us-china-usa-companies-lawsuits-idUSKCN0Y2131

[GreenPartyVoter]

1. No one could ever have seen that coming!

[Kip Humphrey]

2. Easy solution: for all companies claiming sovereign immunity to US law, ban their products since

consumers cannot be protected from injurious or dangerous products sold in the US by these sovereign companies.

Have a nice day!