On August 31, 2015, in EM Ltd. v. Banco Central de la República Argentina, the US Court of Appeals for the Second Circuit held that the district court erred in finding that the central bank of Argentina waived its sovereign immunity because it was an alter ego of Argentina and for its commercial activity with the Federal Reserve Bank of New York (No. 13-3819, (2d Cir. Aug. 31, 2015)).

Argentina stopped making payments on more than $80 billion in sovereign debt, including bonds that were issued under a Fiscal Agency Agreement (FAA), which included an express waiver of sovereign immunity, as a result of its 2001 financial crisis. Argentina restructured over 91% of the then-existing FAA bonds. The plaintiffs in the case, EM Ltd. and NML Capital, Ltd., however, owned FAA bonds that were not restructured. Nonetheless, Argentina refused to make any scheduled payments on these defaulted bonds. In 2003, the plaintiffs filed suit in the US District Court for the Southern District of New York, seeking to recover their unpaid principal and interest. They obtained judgments against Argentina for $2.4 billion and subsequently attempted to satisfy their judgments by attaching funds held by Argentina's central banking authority (the BCRA). Their third amended complaint, filed after being remanded from the Second Circuit, sought a declaratory judgment that the BCRA was Argentina's alter ego, making it liable for Argentina's debts. The BCRA argued that it was immune from lawsuits under the Foreign Sovereign Immunities Act as an instrumentality of the Argentine government. However, the district court held that the BCRA waived its sovereign immunity under two statutory exceptions:

The Second Circuit reversed the district court and remanded with instructions to dismiss the third amended complaint with prejudice. The court first noted that it had appellate jurisdiction because a sovereign immunity determination is immediately appealable under the collateral order doctrine. In determining whether the district court erred in its conclusion that the BCRA waived its sovereign immunity, the court looked at First National City Bank v. Banco Para El Comercio Exterior de Cuba (Bancec) to determine if the BCRA was an alter ego of Argentina (462 U.S. 611 (1983)). Under Bancec, there is a strong presumption that the instrumentality and sovereign state are legally separate and distinct. Applying Bancec, the Second Circuit concluded that the plaintiffs did not overcome this presumption because:

Falling short of these two prongs, the court held that the BCRA was not an alter ego of Argentina. Finally, the commercial activity exception to sovereign immunity did not apply because there was no degree of closeness between the gravamen of the plaintiffs' complaint and the commercial activities engaged by Argentina or the BCRA. Accordingly, the court found that the BCRA did not waive its immunity and remanded the case back to the district court for dismissal.