Administration seeks additional authority to waive new exceptions to sovereign immunity.

• Author: Crook, John R.

In December 2007, Congress adopted a provision in the National Defense Authorization Act for fiscal year 2008 significantly limiting the ability of states designated by the United States as sponsors of terrorism to claim sovereign immunity in suits by terrorism victims. The legislation, contained in section 1083 of the act, also authorized punitive damages and greatly increased judgment holders' ability to enforce judgments against the assets of state commercial enterprises and other state property in the United States.

President Bush vetoed the original version of this legislation, believing that section 1083 significantly conflicted with U.S. goals of restoring Iraq's economy and of encouraging U.S.-Iraqi economic and investment ties. In January 2008, Congress amended the legislation to authorize the president to waive section 1083, but only as to Iraq. Observers predicted that limiting the waiver authority to Iraq would significantly undermine U.S. efforts to expand U.S. relations with Libya, in the wake of Libya's termination of its nuclear program, its substantial payments toward claims from the destruction of Pan Am 103 in 1988, and other positive developments. (1)

In March 2008, the secretaries of state, defense, commerce, and energy wrote jointly to congressional leaders proposing legislation to authorize the president to waive section 1083 also with respect to Libya and other states that have been removed from the U.S. list of state sponsors of terrorism. (2) Excerpts from the secretaries' letter to the speaker of the house follow:

When states, at our urging, take the necessary steps for this change in status under U.S. law, the United States has a strong interest in developing commercial and security relationships with them to provide a continuing incentive to stand with us against the threats of global terrorism. Indeed, in some cases offering them such relationships encourages states to end their support for terrorism. In its current form, Section 1083 still operates to hamper severely this vital foreign policy and national security goal.... Section 1083 applies both to current state sponsors of terrorism and states such as Libya, which is no longer designated a state sponsor after having met the conditions necessary.... It subjects them without distinction to a new set of potential lawsuits retroactively, significantly...