Sec. 613(a) of Title 22 of the United States Code reads as follows:

§ 613. Exemptions.

The requirements of section 612 (a) of this title shall not apply to the following agents of foreign principals:

(a) A duly accredited diplomatic or consular officer of a foreign government who is so recognized by the Department of State, while said officer is engaged exclusively in activities which are recognized by the Department of State as being within the scope of the functions of such officer;

SEC. 612(a) of Title 22 requires, inter alia, an agent of a foreign principal to file a registration statement.

Art. 55(1) of the Vienna Convention on Consular Relations done on Apr. 24, 1963 (TIAS 6820; 21 UST 77; 596 UNTS 261; entered into force for the United States on Dec. 24, 1969), reads as follows:

Without prejudice to their privileges and immunities, it is the duty of all persons enjoying such privileges and immunities to respect the laws and regulations of the receiving State. They also have a duty not to interfere in the internal affairs of that State.

Rights and Duties of Consular Officers

Liability of Consular Officers

Section 111 of the Foreign Relations Authorization Act, Fiscal Year 1978 (the "1978 Act"), Public Law 95-105, 91 Stat. 844, approved on August 17, 1977, repealed 22 U.S.C. 1199, which authorized suit against and provided criminal penalties for any U.S. consular officer who "willfully neglects or omits to perform reasonably any duty imposed upon him by law. . . ." A report submitted by Representative Dante B. Fascell of the International Relations Committee of the House of Representatives concerning H.R. 6689, which was signed into law as the 1978 Act, described the reasons for the repeal of 22 U.S.C. 1199 and the general standard of conduct for other Federal employees that are now applicable to consular officers:

This section repeals 22 U.S.C. 1199 which authorizes suits against U.S. consular officers for damages as a result of willful neglect or failure to perform, in a timely fashion, any duty imposed by law or by order or instructions pursuant to law. Suit is similarly authorized for any willful misfeasance or abuse of power, or any corrupt conduct in office.

Consular officers are the only group of Federal employees who are singled out in this manner. All other Federal employees are subject to civil and criminal liability for acts taken by them in accordance with their official duties.

In the case of civil liability, Federal employees possess a qualified "good faith, reasonable grounds" immunity, the scope of which depends upon their functions and responsibilities. The source of this immunity is not statutory, but is found in case law. With respect to personal liability for criminal acts performed within the scope of official duties, Federal employees generally are governed by 18 U.S.C. 201 (bribery and graft) and 18 U.S.C. 641 (embezzlement and theft).

The committee feels that there is no valid reason to treat consular officers differently from Federal employees as a group. Furthermore, the existence of 22 U.S.C. 1199 constitutes a potential for harassment of consular officers. This is illustrated by the fact that since 1925 only 4 suits have been brought against consular officers under 22 U.S.C. 1199, and those suits have been filed within the last year. While repeal of this action will not affect suits commenced before the date of enactment, it will insure that, henceforth, consular officers will be afforded the same treatment with regard to personal liability for acts taken within the scope of their official duties as are other officers and employees of the United States.

H. Rep. No. 95-231, 95th Cong., 1st Sess. 21.

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Special Missions and Trade Delegations

Trade Delegations

State Bank of India

On May 20, 1977, the U.S. National Labor Relations Board (Board) issued a unanimous decision in the case of the State Bank of India, 229 N.L.R.B. No. 137, 95 LRRM 1141, holding that under the National Labor Relations Act, 29 U.S.C. 151 et seq., the Board should assert jurisdiction over a stipulated unit of employees working in the State Bank of India's branch office in Chicago, Illinois (Employer). The Board ordered an election to determine if the employees desire to be represented by a union. The ruling, which was signed by Chairman John H. Fanning and Members Howard Jenkins, Jr., John A. Penello, Betty Southard Murphy, and Peter Walther, overruled previous decisions where the Board had consistently exercised its discretion to decline jurisdiction over employees in the United States of agencies or instrumentalities of foreign states which engaged in commercial ac

tivities.

The Board found that the Employer, licensed by the State of Illinois "to engage in a general banking business" in Chicago, was an Indian corporation performing the usual functions of a commercial bank as well as the functions of an agent of the Reserve Bank of India. Slip op. at 5. The union which sought to represent the bank's tellers, account clerks, bookkeepers, receptionists, communications employees, and typists, is the Chicago Joint Board, Amalgamated Clothing and Textile Workers Union, American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) (Union).

The Employer contended that the Board should continue to decline jurisdiction because of its close relationship as an agent or "an instrumentality" of a foreign government. Id. 8. The Employer asserted

that the petitioning Union had "failed to demonstrate an 'affirmative intention of the Congress' to confer jurisdiction over an employer that is virtually the alter ego of the Government of India and an integral part of that country's national and international monetary policies." Id. 9.

On the basis of stipulated facts, the Board found that the Employer was engaged in commerce within the meaning of the Act and that the Employer had "failed to demonstrate any congressional intent to exclude such employers from the coverage of the Act or to preclude the Board from exercising jurisdiction." Id. 7, 8. The Board indicated that the "fact that the Employer was organized under the laws of a foreign nation is immaterial to the Board's statutory authority to assert jurisdiction when, as here, such corporation is authorized to and does engage in business operations within the sovereign jurisdiction of the United States and the Board." (Footnote omitted.) Id. 7-8. In arriving at its decision, the Board relied upon decisions by the United States Supreme Court and the Foreign Sovereign Immunities Act of 1976, Public Law 94-583, enacted October 21, 1976, 90 Stat. 2891:

[W]e are not unmindful that the Employer contends that the Supreme Court's decision in McCulloch v. Sociedad Nacional de Marineros [372 U.S. 10 (1963)] contains an "explicit admonition that the Board not extend its jurisdiction into areas of international significance without a clear congressional mandate" in the following

statement:

"We therefore conclude, as we did in Benz [v. Compania Naviera Hidalgo, 353 U.S. 138 (1957)], that for us to sanction the exercise of local sovereignty under such conditions in this delicate field of international relations there must be present the affirmative intention of the Congress clearly expressed.' 353 U.S., at 147. Since neither we nor the parties were able to find any such clear expression, we hold that the Board was without jurisdiction to order the election." [Emphasis supplied.] [372 U.S. at 21-22.]

In both Benz and McCulloch, the Court searched for specific statutory language clearly expressing an affirmative intent to apply the Act to crews working foreign flag ships, at least while temporarily within the "local sovereignty" of the United States by coming within American waters. In McCulloch, the Board had asserted jurisdiction over foreign flag vessels because the foreign corporate owner was a wholly owned subsidiary of an American corporation and the two corporations were held to be joint employers. The Court held that the Board had no jurisdiction, discretionary or otherwise, over the "internal management and affairs" of the foreign flag vessels, relying on the absence of language clearly expressing an affirmative intention to cover such vessels. Neither case dealt with the issue of foreign governments or their agents as employers doing business within the Territorial United States. In finding that the

Board lacked jurisdiction, the Court cautioned that its holding was not to imply "any impairment of our own sovereignty, or limitation of the power of Congress" in this field. The holdings merely reaffirm that "[a]ll legislation is prima facie territorial" and "extraterritorial effect may not be given to laws by implication." Thus, the Act was to be given this normal territorial interpretation and construed as applying generally only to conduct taking place within, or having effect within, the territory of the United States. The Court explained (372 U.S. at 18):

We held [in Benz] that the Act did not apply, searching the language and the legislative history and concluding that the latter "inescapably describes the boundaries of the Act as including only the workingmen of our own country and its possessions." Id., at 144. [Emphasis supplied.]

Within these boundaries, there is no basis for believing that the Act was intended to exclude any employees in our country whose employer in this country is an "employer" engaged in "commerce" within the meaning of the Act.

There is no question of our sovereignty, merely an assertion that "sovereign immunity" must be implied. Such a contention is addressed to our discretion to decline, not our power to assert, jurisdiction.

Our conclusion that there is no valid justification for declining jurisdiction is reinforced by Congress' recent enactment of the Foreign Sovereign Immunities Act of 1976. That act manifests a congressional intent to deny "sovereign immunity" to a "foreign state's private or commercial acts" occurring within the United States. That act, which became effective January 19, 1977, defines a "foreign state" to include "an agency or instrumentality of a foreign state," defines such terms, and provides that there is no immunity from the jurisdiction of the courts of the United States or of the States in any case in which the action is based upon a "commercial activity carried on in the United States by a foreign state." Excepting punitive damages, the foreign state "shall be liable in the same manner and to the same extent as a private individual under like circumstances." The bill, which was drafted over many years and had involved extensive consultations within the administration, among bar associations, and in the academic community, was sponsored by the Departments of State and Justice. It was regarded as urgently needed "in a modern world where foreign state enterprises are every day participants in commercial activities." While we recognize that the Foreign Sovereign Immunities Act of 1976 affords judicial, not administrative, determinations of rights growing out of such activities, we believe that it is further support for our decision to treat foreign state enterprises coming within our jurisdiction as we would private individuals under like circumstances.

29 N.L.R.B. No. 137, slip op. 8, 9, 10, 11, 13, 14. (Footnotes omitted).

The Board described at 3 and 4 of the slip opinion the activities of the Bank as follows:

The Employer, which was at one time India's largest privately owned bank, was nationalized in 1955 and incorporated under a special act as the State Bank of India. By law, the government must hold at least 55 percent of the State Bank's shares. At present over 92 percent of the State Bank's stock is owned by the Reserve Bank of India, which in turn is a wholly owned and controlled agency of the Indian Government. The State Bank is run by 18 directors, of whom 16 are appointed by, or subject to approval by, the Indian Government. By law, no fewer than nine must be directly appointed by the Central Government. At present, 8 percent of the State Bank's stock is held by, and two of its directors were elected by, private persons of unspecified nationality in India. The goals of the State Bank are largely determined by the State Bank Act, orders of the Reserve Bank, and direct requests by the Indian Central Government. In addition, Indian law provides that the State Bank must act as agent for the Reserve Bank of India (herein sometimes called RBI). RBI performs many of the functions performed by the Federal Reserve Bank, the Treasury, and other Federal Government agencies in the United States, e.g. collects taxes, holds Central Government moneys, pays checks for Central Government employees, determines and holds required reserves of banks, prints bank notes which are legal tender, and so on.

The State Bank, with central offices in Bombay, India, does approximately one-third of the total banking business in India and acts as agent for the RBI in any location where it is established and RBI is not, performing such functions as listed above. In addition, its directors and officers have such governmental functions as the authority to authenticate official documents, to attest pension applications by Indian government employees and to certify passport applications of Indian citizens.

In addition to its domestic Indian banking business, the State Bank of India carries on international banking throughout the world.

...

The Board stated at p. 7 of its slip opinion that the parties entered into the following stipulation concerning the operation in interstate commerce of the Bank and its impact thereon:

State Bank of India, organized under the laws of India and licensed to do business in the State of Illinois, is a financial institution located at 10 South LaSalle Street, Chicago, Illinois. During the past year, a representative period, it had a gross volume of business in excess of $1 million; and, during the same period engaged in interstate financial transactions from its location at Chicago, Illinois, in excess of one hundred thousand dollars.

The parties stipulated, and the Board found at 15 of its slip opinion, that the following employees constitute a unit appropriate for the purposes of collective bargaining within the meaning of the Act:

All full-time and regular part-time employees, including tellers, new account clerks, receptionists, telex and mail-room employees, bookkeeping employees, and typists employed at the Employer's branch office in Chicago, Illinois, but excluding all officers, managerial employees, professional employees, confidential employees, temporary employees, maintenance employees, guards and supervisors as defined in the Act.

An N.L.R.B. Bulletin dated June 20, 1977, indicated that "[t]ellers, account clerks and other clerical employees of the State Bank of India's branch in Chicago voted for union representation in an election. . . ."

SK Products Corporation

The National Labor Relations Board (Board) gave further definition to its decision in State Bank of India, supra, in S K Products Corp., 230 N.L.R.B. No. 186, 95 LRRM 1498, issued on July 27, 1977, a case involving a U.S. trading company wholly owned by a foreign