612
Opinion of the Court
States" (presumably Argentina's unilateral extension)—is uncontested. The dispute pertains to whether the unilateral refinancing of the Bonods was taken "in connection with a commercial activity" of Argentina, and whether it had a "direct effect in the United States." We address these issues in turn.
A
Respondents and their amicus, the United States, contend that Argentina's issuance of, and continued liability under, the Bonods constitute a "commercial activity" and that the extension of the payment schedules was taken "in connection with" that activity. The latter point is obvious enough, and Argentina does not contest it; the key question is whether the activity is "commercial" under the FSIA.
The FSIA defines "commercial activity" to mean:
"[E]ither a regular course of commercial conduct or a particular commercial transaction or act. The commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose." 28 U. S. C. § 1603(d).
This definition, however, leaves the critical term "commercial" largely undefined: The first sentence simply establishes that the commercial nature of an activity does not depend upon whether it is a single act or a regular course of conduct; and the second sentence merely specifies what element of the conduct determines commerciality (i. e., nature rather than purpose), but still without saying what "commercial" means. Fortunately, however, the FSIA was not written on a clean slate. As we have noted, see Verlinden B. V. v. Central Bank of Nigeria, 461 U. S. 480, 486-489 (1983), the Act (and the commercial exception in particular) largely codifies the so-called "restrictive" theory of foreign sovereign immunity first endorsed by the State Department in 1952. The meaning of "commercial" is the meaning generally attached to that
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