Before seeking to enforce an award or judgment enforcement against a foreign government, every award creditor (or potential award creditor) will, at some point, wonder whether it will be able to collect the debts owed by the sovereign state in question. Litigants sometimes take considerable time researching whether a sovereign has attachable assets before embarking upon litigation; other times, enforcement is done on a proverbial “wing and a prayer.” Either way, a litigant that manages to find attachable assets of a sovereign debtor still will typically need to get a court to order that those assets to be turned over in satisfaction of its award/judgment. Litigation of this kind can be long and expensive.
In the realm of award enforcement, therefore, few discoveries are as coveted as a bank deposit held by the sovereign debtor. Some of the more successful award/judgment enforcement stories involve litigants that found a bank account in the name of the sovereign debtor, located in a third country (e.g. New York), that was then garnished and turned over in satisfaction of the judgment in question.
To the uninitiated, one might think that sovereign assets are not hard to find at all. Indeed, residents of New York may have heard the stories (perhaps apocryphal) of the large gold reserves held by the various countries of the world, beneath the pavements of Wall Street. Those who have stumbled upon that rumor, however, should be disabused of any notion that a judgment or award against a sovereign could be satisfied with “gold bars.” In fact, the monetary reserves held by sovereign states – including their “monetary gold” – is surrounded by a lattice of treaties, laws and practices that effectively seal them off from ordinary award/judgment enforcement.