(Slip Opinion) OCTOBER TERM, 2024 1

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

REPUBLIC OF HUNGARY ET AL. v. SIMON ET AL.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 23–867. Argued December 3, 2024—Decided February 21, 2025 The Foreign Sovereign Immunities Act of 1976 (FSIA) provides foreign states with presumptive immunity from suit in the United States. 28 U. S. C. §1604. To sue a foreign sovereign in United States courts, plaintiffs must satisfy one of the exceptions to immunity set forth in the FSIA. The FSIA’s expropriation exception permits claims when “rights in property taken in violation of international law are in issue” and either the property itself or any property “exchanged for” the ex- propriated property has a commercial nexus to the United States. 28 U. S. C. §1605(a)(3). Respondents, Jewish survivors of the Hungarian Holocaust and their heirs, sued Hungary and its national railway (MÁV) in federal court, seeking damages for property allegedly seized during World War II. Respondents’ complaint alleged that Hungary and MÁV liquidated the expropriated property, commingled the proceeds with other gov- ernment funds, and later used funds from those commingled accounts in connection with commercial activities in the United States. The District Court determined that this “commingling theory” satisfied §1605(a)(3)’s commercial nexus requirement. The D. C. Circuit af- firmed, reasoning that requiring plaintiffs to trace the particular funds from the sale of their specific expropriated property to the United States would make the exception a “nullity” in cases involving liqui- dated property. Held: Alleging commingling of funds alone cannot satisfy the commercial nexus requirement of the FSIA’s expropriation exception. Pp. 9–22. (a) The expropriation exception requires plaintiffs to trace either the specific expropriated property itself or “any property exchanged for such property” to the United States (or to the possession of a foreign state instrumentality engaged in United States commercial activity). 2 REPUBLIC OF HUNGARY v. SIMON

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The provision’s plain text treats tangible and fungible property alike: For both kinds of property, plaintiffs must plead some facts that enable the reasonable tracing of the property to the United States. Thus, when property is expropriated and exchanged for cash that is then commingled with other funds, plaintiffs must still plausibly allege that the specific proceeds from their property have the required commercial connection to the United States. Plaintiffs might satisfy this requirement in various scenarios: for ex- ample, by identifying a United States account holding proceeds from expropriated property (as in Banco Nacional de Cuba v. Sabbatino, 376 U. S. 398), or by showing that a foreign sovereign spent all funds from a commingled account in the United States shortly after the commin- gling occurred. But an allegation that a foreign sovereign liquidated property decades ago, commingled the proceeds with general funds, and later used some portion of those funds for commercial activities in the United States cannot establish a plausible nexus. This is espe- cially true when commingled funds have been used for various activi- ties worldwide or when the commingled funds are within a foreign sov- ereign’s treasury. The Court does not today address all circumstances where commin- gling allegations might contribute to establishing the required nexus, nor does the Court determine the applicability of common-law tracing principles. The Court holds only that commingling allegations alone cannot satisfy §1605(a)(3)’s commercial nexus requirement. Pp. 9–15. (b) This interpretation aligns with the FSIA’s structure, history, and purpose. The Act generally codifies the restrictive theory of sovereign immunity, which shields foreign states from suits based on public (ra- ther than commercial) acts. Although the FSIA allows claims based on the public act of expropriation, this Court has previously rejected the suggestion that Congress intended the exception to be a “radical departure” from restrictive immunity principles. Federal Republic of Germany v. Philipp, 592 U. S. 169, 183. The exception’s text mirrors the Second Hickenlooper Amendment, which Congress enacted to permit adjudication of claims after Sab- batino. In that case, the expropriated property’s proceeds were trace- able to a segregated New York account. The FSIA’s text requiring identification of specific property, combined with the facts of Sab- batino, counsels against respondents’ expansive commingling theory. Additionally, the Court interprets the FSIA to avoid producing fric- tion in international relations or inviting reciprocal actions against the United States in foreign courts. Congress included the commercial nexus requirement and the “in violation of international law” limita- tion to help ensure the exception would “conform fairly closely” with international law. §1605(a)(3); Bolivarian Republic of Venezuela v. Cite as: 604 U. S. ____ (2025) 3

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Helmerich & Payne Int’l Drilling Co., 581 U. S. 170, 181. Accepting respondents’ theory would expand greatly the circumstances in which foreign sovereigns could be sued in United States courts for public acts, potentially inviting retaliatory measures against the United States. Pp. 15–17. (c) Respondents’ counterarguments are unpersuasive. First they contend that §1605(a)(3) requires different treatment for fungible ver- sus non-fungible property, but the statute’s text draws no such distinc- tion. The ordinary meaning of “exchanged for” requires identifying the specific property received in the exchange: here, the proceeds from sell- ing the expropriated property. Commingling those proceeds with other funds does not transform the entire commingled account into property “exchanged for” the expropriated property. Indeed, the statute’s re- quirement that property be “present in the United States” reinforces the need to trace specific property, as Congress imposed this geo- graphic constraint for “any” property, including money. Second, respondents argue that the concerns about tracing raised in Sabbatino support their position. But the text of §1605(a)(3), which added the commercial nexus requirement not found in the Second Hickenlooper Amendment, reflects Congress’s intent to limit the ex- ception’s scope, not expand it. The Second Hickenlooper Amendment itself, moreover, permitted claims based upon a confiscation or “traced through” one. 23 U. S. C. §2370(e)(2). Finally, respondents contend that rejecting their commingling the- ory would render the expropriation exception a nullity for liquidated property claims. But the Court does not categorically reject all com- mingling-based claims: It holds only that a commingling theory alone cannot satisfy the commercial nexus requirement. This holding ac- cords with the statute’s text and purpose of providing only a limited departure from the restrictive theory of sovereign immunity. Pp. 17– 22. 77 F. 4th 1077, vacated and remanded.

SOTOMAYOR, J., delivered the opinion for a unanimous Court. Cite as: 604 U. S. ____ (2025) 1

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NOTICE: This opinion is subject to formal revision before publication in the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, [email protected], of any typographical or other formal errors.

SUPREME COURT OF THE UNITED STATES _________________

No. 23–867 _________________

REPUBLIC OF HUNGARY, ET AL., PETITIONERS v. ROSALIE SIMON, ET AL. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT [February 21, 2025]

JUSTICE SOTOMAYOR delivered the opinion of the Court. To sue a foreign sovereign in the courts of the United States, plaintiffs must follow the strictures of the Foreign Sovereign Immunities Act of 1976 (FSIA). In general, the FSIA provides that foreign sovereigns and their agencies cannot be haled into this Nation’s courts at all, but the Act sets forth exceptions to that general immunity. One such exception is the expropriation exception. Plaintiffs may sue foreign sovereigns who expropriate their property, provided certain conditions are satisfied, including that the property (or any property “exchanged for” the expropriated property) has a commercial nexus to the United States. 28 U. S. C. §1605(a)(3). Respondents, Jewish survivors of the Hungarian Holo- caust and their heirs, filed this suit in the District Court for the District of Columbia against Hungary and one of its agencies, seeking damages for the alleged expropriation of their property during World War II. Respondents maintain that the expropriated property has had a commercial nexus to the United States because the Hungarian defendants liq- uidated it, commingled the proceeds from that property with money in a government treasury account, and then 2 REPUBLIC OF HUNGARY v. SIMON

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used, decades later, funds from that account in connection with commercial activity in the United States. The issue presented in this case is whether alleging commingling of funds alone can satisfy the commercial nexus requirement of the expropriation exception of the FSIA. The Court holds that it cannot. I A “This Court consistently has recognized that foreign sov- ereign immunity ‘is a matter of grace and comity on the part of the United States.’ ” Rubin v. Islamic Republic of Iran, 583 U. S. 202, 208 (2018) (quoting Verlinden B. V. v. Central Bank of Nigeria, 461 U. S. 480, 486 (1983)). For much of the Nation’s history, the United States adhered to the “clas- sical” or “absolute” theory of foreign sovereign immunity. Accordingly, “foreign states were ‘generally granted com- plete immunity from suit’ in United States courts.” Argen- tine Republic v. Amerada Hess Shipping Corp., 488 U. S. 428, 434, n. 1 (1989) (alteration omitted). Providing foreign states with such immunity served important national inter- ests and helped preserve the United States’ foreign rela- tions. See, e.g., Bolivarian Republic of Venezuela v. Helmerich & Payne Int’l Drilling Co., 581 U. S. 170, 179 (2017) (“To grant [foreign] sovereign entities an immunity from suit in our courts both recognizes the absolute inde- pendence of every sovereign authority and helps to induce each nation state, as a matter of international comity, to respect the independence and dignity of every other, includ- ing our own” (internal quotation marks and alteration omit- ted)). In 1952, however, the State Department adopted a “re- strictive” theory of foreign sovereign immunity, under which a foreign sovereign generally is immune from civil suit for sovereign acts but not for its commercial acts. See Verlinden, 461 U. S., at 486–487. Based on the “increasing Cite as: 604 U. S. ____ (2025) 3

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practice on the part of [foreign] governments of engaging in commercial activities,” the Department concluded it was “necessary [to have] a practice which will enable persons doing business with them to have their rights determined in the courts.” J. Tate, Changed Policy Concerning the Granting of Sovereign Immunity to Foreign Governments, 26 Dept. State Bull. 984, 985 (1952). The United States was not alone in adopting the restrictive theory; the Depart- ment observed that an emerging consensus had developed among nations in favor of this approach to sovereign im- munity. Ibid. Debates over the degree of immunity foreign sovereigns should enjoy in this Nation’s courts followed. In August 1960, protesting a reduction in the U. S. sugar quota for Cuba, Cuba expropriated $175,250.69 worth of sugar lo- cated in its country but belonging to a subsidiary of Com- pania Azucarera Vertientes-Camaguey de Cuba (CAV), a Cuban corporation owned by American stockholders. See Banco Nacional de Cuba v. Sabbatino, 376 U. S. 398, 401– 407 (1964). Farr Whitlock & Co., a U. S. commodity broker, had contracted with CAV to pay for the sugar in New York for delivery to a Farr Whitlock customer in Morocco; but af- ter Cuba expropriated the sugar, Farr Whitlock entered into an identical contract with an instrumentality of the Cuban Government. See id., at 401–404. Cuba then sent the sugar to Morocco, where Farr Whitlock’s customer pur- chased it. See id., at 405–406. After receiving payment in New York from its customer, however, Farr Whitlock refused to give the proceeds to Cuba. See ibid. CAV had claimed it was the rightful owner of the sugar, entitling it to the related proceeds, and agreed to indemnify Farr Whitlock in return for a promise not to turn the funds over to Cuba. See ibid. Shortly thereafter, the New York Supreme Court served Farr Whitlock with an order enjoining it from taking any action that might result 4 REPUBLIC OF HUNGARY v. SIMON

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in the proceeds leaving New York. See ibid. Then, pursu- ant to a subsequent court order, Farr Whitlock transferred the proceeds to Sabbatino, a court-appointed temporary re- ceiver of CAV’s New York assets, pending a judicial deter- mination of the funds’ ownership. See ibid. The National Bank of Cuba later brought suit in the Southern District of New York, asserting its ownership in the proceeds. Id., at 406. Following a decision by the Court of Appeals, the State Supreme Court terminated the CAV receivership and the proceeds from the expropriated sugar were placed in a New York escrow account. See id., at 407. The matter eventually reached this Court. The Court de- clined to decide whether Cuba’s expropriation had violated international law. Observing that there were “few if any issues in international law today on which opinion seems to be so divided as the limitations on a state’s power to expro- priate the property of aliens,” id., at 428, the Court instead invoked the “act of state” doctrine. That doctrine (the Court held) precludes United States courts from deciding the va- lidity of a foreign sovereign’s public acts. See id., at 436– 437. The Court thus “presumed [the] validity” of Cuba’s ex- propriation. Id., at 439. In dissent, Justice White protested that the Court’s holding effectively “validate[d]” Cuba’s “lawless act.” Ibid. Congress swiftly signaled its disapproval of Sabbatino. Within months, it passed the Second Hickenlooper Amend- ment to the Foreign Assistance Act of 1964. The amend- ment prohibits courts from applying the act of state doc- trine where a “righ[t] to property is asserted” based upon a “taking . . . by an act of that state in violation of the princi- ples of international law.” 22 U. S. C. §2370(e)(2). The amendment was broadly understood “to permit adjudica- tion of claims the Sabbatino decision had avoided.” Federal Republic of Germany v. Philipp, 592 U. S. 169, 179 (2021) (collecting authorities). There the law remained, until in 1976, Congress enacted Cite as: 604 U. S. ____ (2025) 5

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the FSIA, the comprehensive statute that now “supplies the ground rules for ‘obtaining jurisdiction over a foreign state in the courts of this country.’ ” Id., at 175 (quoting Amerada, 488 U. S., at 443). The Act provides foreign states with presumptive immunity from suit in the United States. 28 U. S. C. §1604. Thus, “unless a specified excep- tion applies, a federal court lacks subject-matter jurisdic- tion over a claim against a foreign state.” Saudi Arabia v. Nelson, 507 U. S. 349, 355 (1993) (citing Verlinden, 461 U. S., at 488–489). “For the most part, the Act codifie[d], as a matter of federal law, the restrictive theory of sovereign immunity.” Id., at 488. One of the FSIA’s specified exceptions, however, departs from the restrictive theory: the expropriation exception. §1605(a)(3). In crafting the exception addressing the expro- priation of property, “Congress used language nearly iden- tical to that of the Second Hickenlooper Amendment.” Philipp, 592 U. S., at 179. But Congress also added a limi- tation to the expropriation exception not found in the Sec- ond Hickenlooper Amendment: While the amendment per- mits claims “based upon (or traced through) a confiscation or other taking,” 22 U. S. C. §2370(e)(2), the expropriation exception requires that stolen property, or property ex- changed for such property, have a commercial nexus to the United States. Specifically, §1605(a)(3) allows individuals to sue foreign sovereigns in United States courts when “rights in property taken in violation of international law are in issue and that property or any property exchanged for such property is present in the United States in connec- tion with a commercial activity carried on in the United States by the foreign state.” Section 1605(a)(3) also allows suit when “that [expropriated] property or any property ex- changed for such property is owned or operated by an agency or instrumentality of the foreign state and that agency or instrumentality is engaged in a commercial activ- ity in the United States.” 6 REPUBLIC OF HUNGARY v. SIMON

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By permitting the exercise of jurisdiction over certain public acts, “the expropriation exception . . . goes beyond even the restrictive view” in subjecting foreign sovereigns to suit. Philipp, 592 U. S., at 183. As this Court has previ- ously noted, it appears that “no other country has adopted a comparable limitation on [foreign] sovereign immunity.” Ibid. B The allegations in respondents’ complaint arise out of the Hungarian Holocaust. According to their complaint, Win- ston Churchill described the Hungarian Holocaust as “ ‘probably the greatest and most horrible crime ever com- mitted in the history of the world.’ ” App. 6. During World War II, Hungary abetted the murder of over 500,000 Hun- garian Jews, leaving just a fraction of Hungary’s prewar Jewish population. Id., at 49. “Nowhere was the Holocaust executed with such speed and ferocity as it was in Hun- gary.” Id., at 5. Hungary’s genocidal campaign included the mass confis- cation of Jewish property. Per respondents’ complaint, of- ficials from Hungary’s national railway, the Magyar Államvasutak Zrt. (MÁV), robbed Hungarian Jews of their possessions before transporting them to Nazi death camps. Id., at 40–41. The Hungarian Government, moreover, “de- clared all valuable objects owned by Jews—except for their most personal items—part of the national wealth of Hun- gary.” Simon v. Republic of Hungary, 77 F. 4th 1077, 1090 (CADC 2023) (Simon III). Respondents are a group of Jewish survivors of the Hun- garian Holocaust and their heirs who seek damages for a variety of claims, including, inter alia, conversion, unjust enrichment, civil conspiracy to commit tortious acts, and aiding and abetting the conversion of their property, based on Hungary and MÁV’s alleged seizure of their property. Cite as: 604 U. S. ____ (2025) 7

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They claim that Hungary, after seizing their property, liq- uidated it and deposited the proceeds in the Hungarian treasury. There the funds became commingled with other Hungarian Government funds, money Hungary has since used for a wide variety of governmental and commercial op- erations. Respondents’ complaint further alleges that MÁV also liquidated the property it expropriated and deposited the proceeds into commingled accounts that it owns today and has used for a wide range of transactions. In the 2000s, Hungary allegedly used funds from its treasury to issue bonds in the United States and to pur- chase military equipment here. See 579 F. Supp. 3d 91, 107–108 (DC 2021). MÁV also engages in commercial ac- tivity in the United States, including by maintaining an agency here that sells tickets, books reservations, and con- ducts similar business. Ibid. C In 2010, respondents sued Hungary and MÁV, seeking compensation for the seizure of their property during the Holocaust. The procedural history of this case is lengthy. It includes several appeals to the D. C. Circuit. See Simon v. Republic of Hungary, 812 F. 3d 127 (CADC 2016) (Simon I); Simon v. Republic of Hungary, 911 F. 3d 1172 (2018) (Si- mon II); Simon III, 77 F. 4th 1077. When the case previ- ously reached this Court, we vacated the judgment in Si- mon II and remanded the case for further proceedings consistent with our decision in Philipp, 592 U. S., at 172. See Republic of Hungary v. Simon, 592 U. S. 207 (2021) (per curiam). As relevant here, respondents allege that Hungary and MÁV are subject to the jurisdiction of United States courts under the expropriation exception. To satisfy §1605(a)(3)’s commercial nexus requirement, respondents rely on a “com- mingling theory”: They “alleg[e] that the Hungarian de- 8 REPUBLIC OF HUNGARY v. SIMON

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fendants liquidated the[ir] stolen property, mixed the re- sulting funds with their general revenues, and devoted the proceeds to funding various governmental and commercial operations.” Simon I, 812 F. 3d, at 147. Those commingled funds, respondents maintain, were once “exchanged for” their expropriated property and are now “property . . . pre- sent in the United States in connection with a commercial activity carried on in the United States by” Hungary. §1605(a)(3). Among other things, Hungary allegedly used commingled funds to issue bonds and purchase military equipment in the United States in the 2000s; and MÁV al- legedly still “own[s]” the same commingled funds. See 579 F. Supp. 3d, at 107–109; see also §1605(a)(3) (permitting suit when “[expropriated] property or any property ex- changed for such property is owned . . . by an agency . . . of the foreign state and that agency . . . is engaged in a com- mercial activity in the United States” (emphasis added)). Following this Court’s remand on an unrelated question, the District Court reaffirmed a prior determination that re- spondents’ commingling theory satisfied the commercial nexus element of §1605(a)(3). Id., at 122, n. 22. The D. C. Circuit affirmed. It rejected Hungary’s assertion that re- spondents needed to “ ‘produce evidence tracing property in the United States or possessed by MÁV to property expro- priated from them during World War II.’ ” 77 F. 4th, at 1118. Instead, the court concluded that Congress, by in- cluding the phrase “ ‘or any property exchanged for such property’ ” in the expropriation exception, intended to cover circumstances in which a foreign state converts stolen prop- erty into cash and commingles the cash with other funds. Ibid. The court reasoned, moreover, that “[r]equiring plaintiffs whose property was liquidated to allege and prove that they have traced funds in the foreign state’s or instrumentality’s possession to proceeds of the sale of their property would Cite as: 604 U. S. ____ (2025) 9

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render the FSIA’s expropriation exception a nullity for vir- tually all claims involving liquidation” of property. Ibid. “Given the fungibility of money,” the court explained, “once a foreign sovereign sells stolen property and mixes the pro- ceeds with other funds in its possession, those proceeds or- dinarily become untraceable to any specific future property or transaction.” Ibid. The D. C. Circuit “decline[d] to as- cribe to Congress an intent to create a safe harbor for for- eign sovereigns who choose to commingle rather than seg- regate or separately account for the proceeds from unlawful takings.” Ibid. The Court granted certiorari, 602 U. S. ___ (2024), to de- cide “[w]hether historical commingling of assets suffices to establish that proceeds of seized property have a commer- cial nexus with the United States under the expropriation exception to the Foreign Sovereign Immunities Act,” Pet. for Cert. ii. II A To establish federal jurisdiction under the expropriation exception, plaintiffs must allege facts sufficient to raise a plausible inference that either their property, or “any prop- erty exchanged for such property,” is “present in the United States in connection with a commercial activity carried on in the United States by” the foreign sovereign, or that those belongings are “owned or operated by” a foreign state agency “engaged in a commercial activity in the United States.”1 §1605(a)(3).

—————— 1 In their petition for certiorari, Hungary and MÁV asked this Court to

answer two additional questions. First is whether this Court’s decision in Bolivarian Republic of Venezuela v. Helmerich & Payne Int’l Drilling Co., 581 U. S. 170 (2017), displaced the typical plausibility pleading standard, for actions brought under the FSIA, with a heightened stand- ard for factual allegations. Pet. for Cert. ii. It is unnecessary to resolve this question, however, because the commingling theory cannot satisfy 10 REPUBLIC OF HUNGARY v. SIMON

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As a general matter, respondents agree, §1605(a)(3) tasks plaintiffs with identifying specific property, or particular property exchanged for that property, “present in the United States in connection with a commercial activity . . . by the foreign state,” or owned by a foreign state agency en- gaged in commercial activity in the United States. Ibid. Specifically, plaintiffs must identify either the expropriated property itself (“that property”) or “any property exchanged for such property.” Ibid. Doing so inevitably requires that plaintiffs show a tracing of some sort that explains the prop- erty’s lineage and how it found itself in the United States (or in the possession of a foreign sovereign agency that does commercial activity here). When the property at issue is tangible expropriated prop- erty itself, a plaintiff must allege some facts that give rise to a plausible inference that the property is in the United States. Suppose a foreign sovereign expropriates and re- tains for its collection a piece of art from a plaintiff. To bring suit under §1605(a)(3), the plaintiff would have to put forth some facts that support tracing that artwork to a lo- cation in the United States or to the possession of an agency of the sovereign with commercial activities in the United

—————— the lower of these two standards. The Court thus assumes without de- ciding that the plausibility pleading standard applies here. Hungary and MÁV’s second additional question concerns who bears the burden of production to prove (or disprove) that expropriated prop- erty has a commercial nexus with the United States. Ibid. The Govern- ment asks the Court to answer a related question: Who bears the burden of persuasion on that issue. Brief for United States as Amicus Curiae I. The Court declines to answer either question. The parties agree that respondents bear the burden of production. See Brief for Petitioners 39; Brief for Respondents 37–38. And it is unnecessary to resolve who bears the ultimate burden of persuasion because that question arises only after a plaintiff has pleaded adequately that §1605(a)(3)’s commercial nexus is satisfied, which respondents have not done here with their commin- gling allegations. Cite as: 604 U. S. ____ (2025) 11

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States. A complaint would fail if it instead identified an- other unrelated artwork expropriated by the foreign state, even if that other artwork had the requisite commercial nexus to the United States. No one disputes that the phrase “that property” in §1605(a)(3) refers only to the specific piece of property taken from the plaintiff. As respondents recognize, the same tracing requirement would exist if the foreign sovereign were to exchange the plaintiff ’s artwork for another tangible item. Brief for Re- spondents 42–43. For example, suppose that the sovereign trades the expropriated artwork for a different piece of art. That transaction would not extinguish the plaintiff ’s ability to sue: the other piece of art is, of course, property, and §1605(a)(3) permits suit based on “any property exchanged” for the expropriated property. (Emphasis added.) If the plaintiff alleges facts sufficient to reasonably conclude that the different piece of art can be traced to the United States, §1605(a)(3)’s commercial nexus is satisfied. The plaintiff could not merely allege, however, that the foreign sovereign maintains an art collection in the United States. Nor would it be sufficient for the plaintiff to allege that the collection includes other art that is comparable to the exchanged-for piece of art. Section 1605(a)(3)’s use of “exchanged for” means the only relevant art is the one the foreign sovereign received in return for the plaintiff ’s original artwork. Ibid.; see also American Heritage Dictionary 457 (1975) (defining “exchange” as “to relinquish (one thing for another”)). Respondents’ commingling theory accepts all this, but posits an exception to the statute’s tracing requirement that applies only when a foreign sovereign converts expro- priated property into money or other fungible property. Ac- cording to the commingling theory, if a foreign sovereign exchanges expropriated property for money, a plaintiff need not identify the specific funds for which their property was exchanged. Instead, respondents claim, a plaintiff need only identify any fund that was, at any time, no matter how 12 REPUBLIC OF HUNGARY v. SIMON

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remote, commingled with the proceeds of the foreign sover- eign’s sale of the expropriated property. This commingling theory thus does away with the tracing requirement im- plicit in the phrase “exchanged for” within §1605(a)(3). Section 1605(a)(3) contains no such exception. The plain text of the expropriation exception treats all “property” alike, whether that property is tangible (like a piece of art) or fungible (like cash). Thus, if instead of exchanging the expropriated artwork for another piece of art, the foreign sovereign sells it and deposits the cash proceeds into a bank account used for commercial activities, that mere fact does not relieve plaintiffs from alleging some facts that enable the reasonable tracing of those proceeds to the United States. As Sabbatino shows, one way a plaintiff can do so is by identifying an account within the United States that holds the proceeds from the sale of seized property. Similarly, a plaintiff might satisfy §1605(a)(3)’s commercial nexus by al- leging that a foreign sovereign, soon after commingling funds from the sale of expropriated property, spent all the funds from the commingled account in the United States as part of its commercial activity here. It would follow that the proceeds connected to the expropriated property would likely be present in the United States. The same would be true if the amount of commingled funds spent exceeds the amount of the funds in the account unrelated to the alleged expropriation. Put another way, suppose a foreign sover- eign expropriates property and sells it for $1 million. If the foreign state then deposits those proceeds into an account containing $250,000 in other funds and immediately spends $500,000 of the commingled funds for a commercial trans- action in the United States, a plaintiff could rely on those facts to satisfy §1605(a)(3)’s commercial nexus. Those facts would establish that (at least) $250,000 of the $1 million Cite as: 604 U. S. ____ (2025) 13

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proceeds “exchanged for” the expropriated property is “pre- sent in the United States.” §1605(a)(3).2 These are merely examples of how the tracing requirement might be met. A plaintiff does not make the necessary showing, how- ever, by alleging only that the foreign sovereign deposited the proceeds from the sale of expropriated property into an account at some time and eventually used that account for commercial activity in the United States. That is because an allegation of commingling alone does not give rise to a plausible inference that the specific property “exchanged for” the expropriated property, i.e., the cash proceeds from the sale, is “present in the United States.” Ibid. To the contrary, it will typically be indeterminate whether an ex- penditure of commingled funds includes any of the proceeds connected to the expropriated property. Commingling alle- gations are therefore not enough on their own because they do not allow for plausible tracing of specific funds. To con- clude otherwise requires accepting an attenuated fiction that commingling funds in an account, even if done decades earlier, means the account today still contains funds at- tributable to the sale of expropriated property. The problem with such a fiction becomes especially clear when a foreign sovereign has used commingled funds not just for commercial activities in the United States but also for commercial and governmental operations all over the world, as is the case here. App. 33 (alleging that Hungary “liquidated stolen property, mixed the resulting funds with their general revenues, and devoted the proceeds to funding various governmental and commercial operations”). In such circumstances, it is no more likely that the funds re- lated to the expropriated property ended up in the United —————— 2 The proximity in time between a foreign sovereign’s commingling of

proceeds from expropriated property with other money and its expendi- ture of those commingled funds in the United States for commercial ac- tivity may also be a relevant consideration in assessing whether a plain- tiff has satisfied §1605(a)(3)’s commercial nexus. 14 REPUBLIC OF HUNGARY v. SIMON

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States than that they ended up anywhere else in the world or remained in Hungary. That is especially true when the commingled funds are within a foreign sovereign’s treas- ury, given that old and new revenues flow in and out of the treasury in massive quantities over time. Thus, commin- gling allegations alone cannot plausibly establish that any of the relevant proceeds from expropriated property are in the United States. All this is not to say that, once funds are commingled, plaintiffs will never be able to satisfy §1605(a)(3). As pre- viously noted, there are scenarios in which a plaintiff might satisfy §1605(a)(3)’s commercial nexus requirement when expropriated property has been exchanged for cash and that cash has been commingled with other funds. Supra, at 12. The Court does not today purport to identify all cir- cumstances in which commingling allegations may be part of broader allegations that collectively satisfy §1605(a)(3)’s commercial nexus. Instead, the Court holds only that an allegation that a foreign sovereign liquidated expropriated property, commingled the proceeds with other funds, and then used some of those commingled funds for commercial activities in the United States (or that a foreign instrumen- tality retained such proceeds and then commingled them with other funds) cannot itself establish the required com- mercial nexus of §1605(a)(3). Because respondents have disclaimed in this case the utility of common-law tracing principles and rules from other contexts, Tr. of Oral Arg. 76, we leave for another day the extent to which they may prove helpful to courts tasked with determining whether a plaintiff has satisfied §1605(a)(3)’s commercial nexus when expropriated prop- erty has been liquidated and commingled. Cf. Luis v. United States, 578 U. S. 5, 22 (2016) (plurality opinion) (re- ferring to “tracing rules governing commingled accounts” in the trust-law context and citing 4 A. Scott, Law of Trusts §518 (1956)). Courts should not import reflexively those Cite as: 604 U. S. ____ (2025) 15

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principles and rules into this context, however, given the baseline presumption of foreign sovereign immunity. Any application of existing tracing principles and rules must be consistent with the overall FSIA scheme and the expropri- ation exception’s requirements. B This interpretation of §1605(a)(3) is further consistent with the FSIA’s structure, history, and purpose. As a gen- eral matter, litigants cannot sue foreign sovereigns in United States courts. The FSIA “creates a baseline pre- sumption of immunity from suit.” Philipp, 592 U. S., at 176; see 28 U. S. C. §1604. To the extent the Act permits litigation against foreign states, it usually requires that the litigation be premised on the foreign state’s private, com- mercial conduct. That is because the FSIA “ ‘largely codi- fies’ the restrictive theory” of sovereign immunity, which shields foreign states from being sued for their public acts. Courts should “take seriously the Act’s general effort to pre- serve a dichotomy between private and public acts.” Philipp, 592 U. S., at 183. Although §1605(a)(3) allows plaintiffs to bring suit based on the public act of expropriation, this Court has previously “reject[ed] the suggestion that Congress intended the ex- propriation exception to operate as a ‘radical departure’ from the ‘basic principles’ of the restrictive theory.” Id., at 183 (quoting Helmerich, 581 U. S., at 181). Yet reading §1605(a)(3) as broadly as respondents do would undermine those principles by expanding greatly the circumstances in which foreign sovereigns can be brought into United States courts for their public acts. Moreover, Congress drafted the expropriation exception “against th[e] legal and historical backdrop” that includes not only the restrictive theory but also Sabbatino. Philipp, 592 U. S., at 181. Recall that the text of §1605(a)(3) mir- rors, in part, that of the Second Hickenlooper Amendment, 16 REPUBLIC OF HUNGARY v. SIMON

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which Congress enacted “to permit adjudication of claims the Sabbatino decision had avoided.” Id., at 179. In Sab- batino, “the proceeds . . . in controversy” could be traced to a New York account that contained segregated funds at- tributable only to the sale of expropriated sugar. 376 U. S., at 401. The facts of Sabbatino, along with the FSIA’s plain text requiring identification of distinct property seized, or specific property exchanged for that property, with a com- mercial nexus to the United States, counsel against the commingling theory alone satisfying §1605(a)(3)’s commer- cial nexus. There is further good reason for the Court not to read §1605(a)(3) so broadly as to permit a commingling theory alone: the United States’ “reciprocal self-interest” in receiv- ing sovereign immunity in foreign courts. National City Bank of N. Y. v. Republic of China, 348 U. S. 356, 362 (1955). This Court “interpret[s] the FSIA as we do other statutes affecting international relations: to avoid, where possible, ‘producing friction in our relations with [other] na- tions and leading some to reciprocate by granting their courts permission to embroil the United States in expensive and difficult litigation.’ ” Philipp, 592 U. S., at 184 (quoting Helmerich, 581 U. S., at 183; alteration in original). Alt- hough the expropriation exception is “unique” in how it de- parts from the restrictive theory, Philipp, 592 U. S., at 183, its drafters understood it to “ ‘conform fairly closely’ ” with international law, Helmerich, 581 U. S., at 181; ibid. (ob- serving that “this Court, like Congress, has paid special at- tention” to the Government’s “views on sovereign immun- ity”). That is why the exception requires a commercial nexus with the United States and a taking of property “in violation of international law.” §1605(a)(3). By including this language, Congress hoped it “would diminish the like- lihood that other nations would each go their own way, thereby ‘subject[ing]’ the United States ‘abroad’ to more Cite as: 604 U. S. ____ (2025) 17

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claims ‘than we permit in this country.’ ” Id., at 181 (quot- ing Hearing on H. R. 3493 before the Subcommittee on Claims and Governmental Relations of the House of Repre- sentatives Committee on the Judiciary, 93d Cong., 1st Sess., 18 (1973) (alteration in original)). If respondents’ commingling theory were accepted, §1605(a)(3) would impose a far greater limitation on foreign sovereign immunity, expanding the set of circumstances in which foreign sovereigns could be sued in United States courts for public acts involving expropriation. The Govern- ment represents that this would invite the very risk it sought to avoid in helping draft §1605(a)(3): that foreign states, in response, will subject the United States abroad to “retaliatory or reciprocal actions” in their courts. Tr. of Oral Arg. 31. The Court declines to interpret §1605(a)(3) in the expansive manner that respondents seek. III A Respondents do not resist that the plain text of §1605(a)(3) requires plaintiffs to identify and trace their specific expropriated property, or the particular property exchanged for their expropriated property, to the United States (or to the possession of a foreign instrumentality that does commercial activity here) when the property in question is nonfungible. Yet respondents insist that the same statutory text does not require similar tracing when the expropriated property is converted into cash. Instead, respondents maintain, §1605(a)(3) is best read to support their commingling theory in those circumstances. That ar- gument is unpersuasive. Respondents start from the undisputed premise that money is property. From there, respondents argue that money can be the “any property” that is “exchanged for” ex- propriated property. §1605(a)(3). If a foreign sovereign then commingles proceeds from the sale of expropriated 18 REPUBLIC OF HUNGARY v. SIMON

Opinion of the Court

property with other funds, respondents explain, the pro- ceeds do not lose their status as the property that was “ex- changed for” the expropriated property. Thus, according to respondents, when those commingled funds enter the United States in connection with a foreign state’s commer- cial activities (or enter the possession of a foreign agency that does commercial activities in the United States), the commercial nexus is satisfied because the commingled funds came from an account where the expropriated pro- ceeds were deposited. No further tracing is required, they insist, because money is fungible. This fungibility means any given dollar of the proceeds in an account is indistin- guishable from, and thus exchangeable with, any dollar in the commingled account. Section 1605(a)(3)’s text does not support this theory. For one, the expropriation exception does not draw any distinc- tions between nonfungible and fungible property. Nothing in the text of §1605(a)(3) establishes distinct tracing re- quirements for the latter. Moreover, respondents’ commin- gling theory distorts the ordinary meaning of “exchange.” When a foreign sovereign sells expropriated property, the cash proceeds it gets in return is the relevant property for purposes of §1605(a)(3). This is because those proceeds were “exchanged for” the expropriated property, and it is this property a plaintiff must show is in the United States. The other money in a foreign sovereign’s possession is irrel- evant. Just as a foreign sovereign’s art collection in the United States would be if it does not contain a plaintiff ’s specific expropriated artwork or a piece of art exchanged for that artwork. Respondents do not argue that a foreign state’s cash re- serves, if kept separate from proceeds of the sale of expro- priated property, can qualify as “property exchanged for” expropriated property. Nor could they: That separate cash bears no relationship to the expropriated property. That a Cite as: 604 U. S. ____ (2025) 19

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foreign sovereign may instead commingle expropriated pro- ceeds with other unrelated funds does not change that con- clusion. The only property the sovereign received in “ex- change” for the expropriated property is the cash proceeds it received in that transaction. Yet the commingling theory requires accepting the idea that the entire account with commingled funds should be regarded as property “ex- changed for” the expropriated property, even if that ac- count’s assets far outweigh what the foreign sovereign re- ceived for selling the expropriated property. The facts of this case underscore why this commingling theory is inconsistent with the ordinary meaning of “ex- changed for.” Respondents allege that Hungary used gen- eral treasury funds to issue bonds and purchase military equipment in the United States in the 2000s. That expendi- ture, respondents maintain, permits their suit to proceed under §1605(a)(3) because Hungary allegedly expropriated their property during World War II, liquidated it, and then commingled the proceeds with government funds. In the intervening decades, however, Hungary has made count- less transactions throughout several institutional collapses and regime changes, resulting in billions in revenues flow- ing in and out of its treasury. Against this historical back- drop, it is implausible to say that the commingling Hungary did in the 1940s, on its own, establishes that the money it spent in the United States in the 2000s was “exchanged for” the property Hungary allegedly expropriated from respond- ents. The same is true for the assertion that any of MÁV’s current possessions were “exchanged for” respondents’ property based solely on the fact that it allegedly liquidated respondents’ property in the 1940s and then commingled the proceeds with its general revenues, given that MÁV has used those commingled funds in the intervening decades for countless transactions as well. To say otherwise stretches “exchange” to the point of breaking. It is true that, because money is fungible, it will likely be 20 REPUBLIC OF HUNGARY v. SIMON

Opinion of the Court

difficult to trace cash from the sale of expropriated property after it is commingled. Section 1605(a)(3), however, con- tains a further textual indication that reinforces its require- ment of tracing specific property: When a foreign sovereign is responsible for the expropriation, a suit may proceed only if the property is “present in the United States.” Congress was well aware that the location of money can become in- determinate when it is commingled, but it nonetheless im- posed this geographic constraint for “any” property, includ- ing money. Ibid. (emphasis added); cf. 21 U. S. C. §§853(p)(1)(E), (2) (in the criminal forfeiture context, per- mitting seizure of “any other property of the defendant” when property “has been commingled with other property which cannot be divided without difficulty”). B Respondents next argue that the concerns this Court raised in Sabbatino about tracing expropriated property helps their position. For instance, the Court observed that “one would have difficulty determining after goods had changed hands several times whether the particular arti- cles in question were the product of ” expropriation. 376 U. S., at 434. The Court also mentioned specifically the “difficult tas[k] of ascertaining the origin of fungible goods.” Ibid., n. 39. Congress nevertheless enacted the Second Hickenlooper Amendment with those observations in mind, and later passed the expropriation exception, which has language nearly identical to that of the Second Hick- enlooper Amendment. According to respondents, those ac- tions reflect Congress’s intent to allow the adjudication of expropriation claims generally, including those premised on a commingling theory. It is the statutory text of §1605(a)(3) that best reflects Congress’s intent, however, and it does not support re- spondents’ commingling theory for the reasons discussed. Indeed, the expropriation exception permits only claims Cite as: 604 U. S. ____ (2025) 21

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that show a commercial nexus between expropriated prop- erty (or property exchanged for that property) and the United States, a requirement not found in the Second Hick- enlooper Amendment. Moreover, the Second Hickenlooper Amendment allows claims “based upon (or traced through) a confiscation or other taking,” 22 U. S. C. §2370(e)(2) (em- phasis added), underscoring the importance of alleging some facts that enable the reasonable tracing of property to the United States, in the §1605(a)(3) context, when claims identify “property exchanged for [expropriated] property,” 28 U. S. C. §1605(a)(3) (emphasis added). Thus, the expro- priation exception’s roots in Sabbatino and the Second Hickenlooper Amendment do not provide a compelling rea- son to abandon the plain meaning of §1605(a)(3).3 C Lastly, respondents argue from purpose. Like the D. C. Circuit, they maintain that §1605(a)(3) will be rendered a nullity if the commingling theory alone cannot plausibly es- tablish a commercial nexus with the United States. The commingling theory is necessary, they insist, because with- out it, foreign sovereigns can “commingle the proceeds from illegally taken property with general accounts” and thereby “insulate [themselves] from suit [in the United States] un- der the expropriation exception.” 77 F. 4th, at 1118.

—————— 3 Contrary to respondents’ assertions, moreover, the Second Hick-

enlooper Amendment was contemporaneously understood by courts to permit adjudication of claims involving “specific and identifiable and ‘traceable’ property.” French v. Banco Nacional de Cuba, 23 N. Y. 2d 46, 61, 242 N. E. 2d 704, 714 (1968); see id., at 58, 242 N. E. 2d, at 712 (ob- serving that the amendment was “restricted, manifestly, to the kind of problem exemplified by the Sabbatino case itself, a claim of title or other right to specific property which had been expropriated abroad” (emphasis added)); see also Hunt v. Coastal States Gas Prod. Co., 583 S. W. 2d 322, 330, n. 6 (Tex. 1979) (“Although the amendment does not refer specifi- cally to proceeds, it is clear that it was intended to apply to the property as long as it is traceable”). 22 REPUBLIC OF HUNGARY v. SIMON

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The Court’s decision, however, does not categorically re- ject claims premised on a commingling theory. The Court holds only that a commingling theory cannot satisfy §1605(a)(3)’s commercial nexus on its own. It is true that it will be harder for plaintiffs to satisfy §1605(a)(3)’s commer- cial nexus element when a foreign sovereign expropriates property in violation of international law and liquidates it if they cannot rely on a commingling theory alone. This added difficulty in bringing some §1605(a)(3) claims, though, does not make the expropriation exception a dead letter for the reasons explained. Supra, at 12–14. Respondents’ policy concerns, moreover, cannot “ ‘sur- mount the plain language of the statute,’ ” Truck Insurance Exchange v. Kaiser Gypsum Co., 602 U. S. 268, 284 (2024) (quoting Arthur Andersen LLP v. Carlisle, 556 U. S. 624, 629 (2009)), especially given countervailing ones that better conform to the plain text. Allowing plaintiffs to forgo alto- gether the statute’s tracing requirements by pleading a commingling theory could allow vastly more suits to pro- ceed under §1605(a)(3), even though the expropriated prop- erty would have an attenuated nexus to the United States. This could, in turn, undermine the United States’ foreign relations and reciprocal self-interest, as well as §1605(a)(3)’s conformity with international law. As dis- cussed, the Government helped craft §1605(a)(3) expressly to avoid that outcome, supra, at 16–17, and Congress in- tended for §1605(a)(3) to operate as only a limited depar- ture from the restrictive theory, which provides foreign sov- ereign immunity for public acts like expropriation. * * * Ultimately, today’s decision concerns only what plaintiffs must plead to bring suit against foreign sovereigns for their actions abroad in the courts of the United States. That a particular claim cannot satisfy the expropriation exception Cite as: 604 U. S. ____ (2025) 23

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means only that it cannot be brought here, not that it can- not be brought in any forum. As the Government correctly recognizes, “the moral imperative has been and continues to be to provide some measure of justice to the victims of the Holocaust, and to do so in their remaining lifetimes.” Brief for United States as Amicus Curiae 26. The Government also represents, however, that “[r]especting the limits in the FSIA aids in the United States’ efforts to persuade foreign nations to establish appropriate redress and compensation mechanisms for human-rights violations, including the hor- rendous human-rights violations perpetrated during the Holocaust.” Ibid. For the foregoing reasons, the Court concludes that a commingling theory, without more, cannot satisfy the com- mercial nexus requirement of §1605(a)(3). The judgment of the Court of Appeals for the D. C. Circuit is vacated, and the case is remanded for further proceedings consistent with this opinion. It is so ordered.