1. Confirmation proceedings in the District of Columbia

Crystallex filed an action to confirm its award in the U.S. District Court for the District of Columbia. It properly served Venezuela, who appeared to defend it. The Court confirmed the award and entered a federal judgment in favor of Crystallex. D.C. Crystallex I, 244 F. Supp. 3d at 122–23. After Venezuela failed to satisfy the judgment within 30 days, the Court ruled that Crystallex could execute on it. Crystallex Int'l Corp. v. Bolivarian Republic of Venezuela, No. CV 16- 0661 (RC), 2017 WL 6349729, at *1 (D.D.C. June 9, 2017). However, the Court expressly declined to address whether Crystallex could attach assets held by PDVSA and its subsidiaries. Id. at *2. Venezuela appealed the ruling, and the D.C. Circuit affirmed it. Crystallex Int'l Corp. v. Bolivarian Republic of Venezuela, No. 17-7068, 2019 WL 668270, at *2 (D.C. Cir. Feb. 14, 2019).

2. Delaware Uniform Fraudulent Transfer Act proceedings

While arbitration was pending and then after the award was announced, Crystallex brought suits against CITGO, CITGO Holding, PDVH, and PDVSA in the Delaware District Court. See Crystallex Int'l Corp. v. PDV Holding, Inc. (1:15- CV-1082); Crystallex Int'l Corp. v. PDV Holding, Inc. (1:16- CV-1007). It claimed that Venezuela refused to pay its arbitration award and “thwart[ed] enforcement” by transferring its assets among several entities—PDVSA, PDVH, and CITGO— allegedly in violation of the Delaware Uniform Fraudulent Transfer Act, 6 Del. C. §§ 1301–11. Crystallex Int'l Corp. v. Petróleos de Venezuela, S.A., 879 F.3d 79, 82 (3d Cir. 2018). The Court denied PDVH's motion to dismiss, but we reversed and held that a transfer from a non-debtor could not be a “fraudulent transfer” under the Act. Id. at 81 (“While we do not condone the debtor's and the transferor's actions, we must conclude that Crystallex has failed to state a claim under [the Act].”). That panel noted explicitly but reserved judgment on the question now before us—whether PDVSA could be liable for the arbitration award as an “alter ego” of Venezuela. Id. at 84 n.7.

3. Proceedings in this appeal

While the award-confirmation appeal was pending in the D.C. Circuit, Crystallex followed up its judgment by filing an attachment action against Venezuela in the Delaware District Court. Under Federal Rule of Civil Procedure 69(a), Crystallex attempted to attach PDVH shares owned by PDVSA. That rule provides: “A money judgment is enforced by a writ of execution, unless the court directs otherwise. The procedure on execution—and in proceedings supplementary to and in aid of judgment or execution—must accord with the procedure of the state where the court is located,” here Delaware, “but a federal statute governs to the extent it applies.” Delaware law permits a judgment creditor to obtain a writ of attachment (known by its Latin name, fieri facias, or simply fi. fa.) over various forms of property belonging to the debtor, including its shares in a Delaware corporation. See 10 Del. C. § 5031; 8 Del. C. § 324(a).

Though not named in the attachment proceeding, PDVSA intervened in the District Court. It moved to dismiss the proceeding on the ground of sovereign immunity under the Sovereign Immunities Act.

After several rounds of briefing and hearings, the District Court concluded that PDVSA was Venezuela's “alter ego” under Bancec. Crystallex Int'l Corp. v. Bolivarian Republic of Venezuela (“Del. Crystallex”), 333 F. Supp. 3d 380, 414 (D. Del. 2018). The Court held (1) it had jurisdiction to order attachment against PDVSA's U.S.-based commercial assets, and (2) Crystallex could attach PDVSA's shares of PDVH to satisfy the judgment against Venezuela. A follow-up order, dated August 23, 2018, directed the Clerk to issue the writ and have it served in furtherance of an execution through a public sale of PDVH stock. PDVSA appealed both of these orders (docketed in our Court as Nos. 18-2797 & 18-3124), and also filed a petition for a writ of mandamus (No. 18-2889) to prevent completion of the sale during this appeal. We consolidated all three appeals for oral argument and resolution.

While they were pending before us, Venezuela moved to intervene and to stay these appeals for 120 days so that it could further evaluate its legal position. By order dated March 20, 2019, we granted Venezuela's motion to intervene and participate in oral argument. We also permitted it to file supplemental briefing. We did not rule on its motion to stay but stated we would consider that motion at oral argument. At that argument, Venezuela chose to forgo further pursuit of a stay. Oral Arg. Tr. at 180:1–7 (Apr. 15, 2019).

1. The District Court had jurisdiction over Venezuela.

As noted, Crystallex confirmed its arbitration award against Venezuela in the U.S. District Court for the District of Columbia, which yielded a federal judgment. It then registered that judgment for enforcement in the Delaware District Court under 28 U.S.C. § 1963. That section provides that a judgment so registered “shall have the same effect as a judgment of the district court of the district where registered and may be enforced in like manner.” Id. After registering the judgment, Crystallex moved to enforce it by attaching assets under Federal Rule of Civil Procedure 69(a).

As a threshold question, we consider whether the District Court in Delaware had jurisdiction over Venezuela, the only party named as a defendant here. It is undisputed that the D.C. District Court had jurisdiction over Venezuela under the Sovereign Immunity Act's arbitration exception, 28 U.S.C. § 1605(a)(6). It is well established that federal courts have ancillary jurisdiction to enforce their judgments. See IFC Interconsult, AG v. Safeguard Int'l Partners, LLC, 438 F.3d 298, 311 (3d Cir. 2006). That jurisdiction applies to “a broad range of supplementary proceedings involving third parties to assist in the protection and enforcement of federal judgments—including attachment . . . [and] garnishment.” Peacock v. Thomas, 516 U.S. 349, 356, 359 & n.7 (1996). Furthermore, ancillary enforcement jurisdiction—or its functional equivalent—has been routinely applied to post-judgment enforcement proceedings against a foreign sovereign. See First City, Texas Houston, N.A. v. Rafidain Bank, 281 F.3d 48, 53–54 (2d Cir. 2002); Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 1123 (9th Cir. 2010); Transaero, Inc. v. La Fuerza Aerea Boliviana, 30 F.3d 148, 150 (D.C. Cir. 1994). In other words, when a party establishes that an exception to sovereign immunity applies in a merits action that results in a federal judgment—here, the exception for confirming arbitration awards, 28 U.S.C. § 1605(a)(6)—that party does not need to establish yet another exception when it registers the judgment in another district court under 28 U.S.C. § 1963 and seeks enforcement in that court. Rather, the exception in the merits action “sustain[s] the court's jurisdiction through proceedings to aid collection of a money judgment rendered in the case . . . .” First City, 281 F.3d at 53–54.

According to Venezuela, we should forbid Crystallex from using the § 1963 procedure in this case, as that procedure for registering a judgment cannot be applied to a foreign sovereign at all because it is “preempted by [the Sovereign Immunities Act].” (Venezuela Br. at 9–16.)Footnote ⁴ Venezuela presents this position as a two-pronged jurisdictional argument. First, it contends that § 1963 does not confer personal jurisdiction over it because the only method for establishing jurisdiction is by making proper service under the Sovereign Immunities Act's service provisions, 28 U.S.C. § 1608. (Venezuela Br. at 9–12.) We disagree: § 1608 applies only to the “summons and complaint,” id., whereas “[s]ervice of post-judgment motions is not required.” Peterson, 627 F.3d at 1130.

Second, Venezuela asserts that § 1963 does not create subject matter jurisdiction over foreign sovereigns and cannot be used to “piggyback” on the subject-matter jurisdiction of the court that rendered the judgment being enforced. (Venezuela Br. at 12–16.) Regardless whether § 1963 separately confers subject-matter jurisdiction over foreign sovereigns, a district court has jurisdiction to enforce a federal judgment against a foreign sovereign when it is registered under § 1963. This is so, as noted, because the jurisdictional basis from the action resulting in the judgment carries over to the post-judgment enforcement proceeding in a manner akin to the ordinary operation of a district court's enforcement jurisdiction over post-judgment proceedings. See First City, 281 F.3d at 53–54; Peterson, 627 F.3d at 1123; Transaero, 30 F.3d at 150.

A recent decision by the Supreme Court reinforces our rejection of Venezuela's novel § 1963 argument. See Republic of Sudan v. Harrison, 139 S. Ct. 1048, 1054 (2019). It involved a § 1963 proceeding against the instrumentalities of a foreign sovereign—the same procedural posture we have here. The Court resolved that case on a ground not relevant here, but, notably, it expressed no concern about the use of a § 1963 proceeding against a foreign sovereign. If Venezuela's view of § 1963 were correct, Harrison would presumably have said so.Footnote ⁵

In short, before the Delaware District Court and us is a continuation of the action in the D.C. District Court. As the latter had jurisdiction over Venezuela—by virtue of the Sovereign Immunities Act's arbitration exception, 28 U.S.C. § 1605(a)(6)—both Courts that follow, the Delaware District Court and our Court, also have jurisdiction.

2. The District Court properly used Bancec to extend its jurisdiction to assets held nominally by PDVSA.

Taking a different tack, PDVSA concedes the District Court had jurisdiction over Venezuela but believes that Bancec cannot be used to extend that jurisdiction to reach the assets of PDVSA, a non-party to the merits action. We part company again.

To reach this conclusion, we first consider our decision in Federal Insurance, 12 F.3d at 1287. There we joined other circuits in holding that, although the Bancec doctrine came in a case involving the shifting of substantive liability, it also applied to extend a district court's jurisdiction over a foreign sovereign to reach an extensively controlled instrumentality. See id. (collecting cases). On a straightforward application of Federal Insurance, the District Court's jurisdiction over Venezuela would extend to PDVSA so long as it is Venezuela's alter ego under Bancec. See De Letelier v. Republic of Chile, 748 F.2d 790, 795 (2d Cir. 1984) (applying Bancec in post-judgment enforcement proceeding); Alejandre v. Telefonica Larga Distancia de Puerto Rico, Inc., 183 F.3d 1277, 1288 (11th Cir. 1999) (same).

That potential application of Federal Insurance deserves a closer look. The decision was in the context of a merits action—it did not address the post-judgment enforcement setting we have here. 12 F.3d at 1287. According to PDVSA, that distinction makes all the difference. It claims that a district court cannot exercise post-judgment enforcement jurisdiction over a party other than the judgment debtor based on a theory of “alter ego” or “veil piercing”Footnote ⁶ unless it has an “independent basis” for jurisdiction over the third party. (PDVSA Br. at 24–27.) For that proposition, PDVSA cites Peacock, 516 U.S. at 357, in which a plaintiff who had obtained a federal judgment against his employer under the Employee Retirement Income Security Act of 1974 (“ERISA”) filed a new action in a federal court against a shareholder of the employer seeking to hold him liable by “piercing the corporate veil.” Id. at 353. The Court ruled that action was not within the district court's ancillary enforcement jurisdiction because it does not extend to “a subsequent lawsuit to impose an obligation to pay an existing federal judgment on a person not already liable for that judgment.” Id. at 357.

According to PDVSA, Peacock precludes the District Court from exercising ancillary enforcement jurisdiction over this action because it seeks to “shift liability for payment of an existing judgment to a third party that is not otherwise liable on the judgment.” (PDVSA Br. at 24 (citing Peacock).) That reading of Peacock misfires. It was not a case involving foreign sovereigns or the Sovereign Immunities Act. The Act is a specialized jurisdictional statute designed to address a specific problem—the extent to which foreign sovereigns and their instrumentalities are immune from suit and attachment in our courts. And the Bancec doctrine—the applicability of which is the core question here—is a federal common-law outgrowth of that specialized statute. It (the doctrine) exists specifically to enable federal courts, in certain circumstances, to disregard the corporate separateness of foreign sovereigns to avoid the unfair results from a rote application of the immunity provisions provided by the Sovereign Immunities Act. Nothing in Peacock leads us to believe the Supreme Court expected or intended its decision in that case to restrain the application of Bancec in post-judgment proceedings.

Moreover, in Rubin v. Islamic Republic of Iran, 138 S. Ct. 816, 823 (2018), the Supreme Court all but confirmed that Bancec can indeed be used to reach the assets of a foreign sovereign's extensively controlled instrumentality through post-judgment attachment proceedings. The Court examined 28 U.S.C. § 1610(g), a provision of the Sovereign Immunities Act related to attachments of assets held by agencies and instrumentalities of states that have sponsored terrorism. Id. It observed that § 1610(g)(1), which was added to the Sovereign Immunities Act by congressional amendment in 2008, “incorporate[s] almost verbatim the five Bancec factors [they are noted below], leaving no dispute that, at a minimum, § 1610(g) serves to abrogate Bancec with respect to the liability of agencies and instrumentalities of a foreign state where a [terrorism-related-judgment] holder seeks to satisfy a judgment held against the foreign state.” Id. We take from this the implication that in ordinary FSIA attachment proceedings—i.e., those that do not involve judgments based on state-sponsored terrorism—the judgment holder may reach the assets of the foreign judgment debtor by satisfying the Bancec factors. See id. Indeed, the Court expressly stated that, where 28 U.S.C. § 1610(g) does not apply, a plaintiff with a judgment against the sovereign would need to satisfy the Bancec factors if it sought, for example, “to collect against assets located in the United States of a state-owned telecommunications company.” Id. at 23–24 (citing Alejandre, 183 F.3d 1277) (emphasis added).

These analyses confirm the relevance of Bancec here: so long as PDVSA is Venezuela's alter ego under Bancec, the District Court had the power to issue a writ of attachment on that entity's non-immune assets to satisfy the judgment against the country. See Hercaire Int'l, Inc. v. Argentina, 821 F.2d 559, 563–65 (11th Cir. 1987) (looking to the Sovereign Immunities Act and Bancec to determine “whether the assets of a foreign state's wholly-owned national airline are subject to execution to satisfy a judgment obtained against the foreign state, where the airline was neither a party to the litigation nor was in any way connected with the underlying transaction giving rise to the suit”); Arriba Ltd. v. Petroleos Mexicanos, 962 F.2d 528, 532–38 (5th Cir. 1992) (doing the same to determine whether the district court had jurisdiction to conduct a garnishment proceeding against a foreign instrumentality, where the purported basis for jurisdiction was solely the actions of the instrumentality's agents).

1. Extensive control standard under Bancec

In Bancec the Supreme Court allowed a U.S. bank to recover assets from a Cuban instrumentality to satisfy a debt owed by the Republic of Cuba. Bancec, 462 U.S. at 613. It held that while there exists a strong presumption that government instrumentalities have a separate legal identity (along with limited liability) from their “parent” governments, this presumption can be overcome in certain situations—for example, “where a corporate entity is so extensively controlled by its owner that a relationship of principal and agent is created, we have held that one may be held liable for the actions of the other.” Bancec, 462 U.S. at 629 (citing NLRB v. Deena Artware, Inc., 361 U.S. 398, 402–404 (1960)). “In addition,” it recognized “the broader equitable principle that the doctrine of corporate entity, recognized generally and for most purposes, will not be regarded when to do so would work fraud or injustice.” Id. (quoting Taylor v. Standard Gas Co., 306 U.S. 307, 322 (1939)). Thus we recognize Bancec establishes a disjunctive test for when the separate identities of sovereign and instrumentality should be disregarded: when there is “extensive[] control,” and when not disregarding separate identities would work a “fraud or injustice.” Rubin, 138 S. Ct. at 823.

Bancec did not develop a “mechanical formula” for determining when these exceptions should apply, however, which left “lower courts with the task of assessing the availability of exceptions on a case-by-case basis.” Rubin, 138 S. Ct. at 823. In ensuing decades district and circuit courts applied the Bancec extensive-control test in various contexts. Several multi-factor tests emerged in that period—the Second Circuit, for example, had a non-exhaustive five-factor test, see EM Ltd. v. Banco Cent. De La Republica Argentina, 800 F.3d 78, 91 (2d Cir. 2015), which the District Court applied here.Footnote ⁷ By and large the multi-factor tests for extensive control percolating through the federal courts covered similar ground, see, e.g., Walter Fuller Aircraft Sales, Inc. v. Republic of Philippines, 965 F.2d 1375, 1380 n.7, 1381 (5th Cir. 1992) (identifying five extensive-control factors), though at least one court has piled on the factors, see Bridas S.A.P.I.C. v. Gov't of Turkmenistan, 447 F.3d 411, 418 (5th Cir. 2006) (recognizing 21 factors relevant to extensive control).

In Rubin, the Supreme Court recently provided a further gloss on the Bancec factors, which we believe clarifies the analysis of the extensive-control prong here. The plaintiffs there held a § 1605A-judgment against the Islamic Republic of Iran and attempted to attach and execute against certain Iranian artifacts on loan to the University of Chicago. Rubin, 138 S. Ct. at 820. In the course of addressing whether that attachment was proper (it was not), the Court identified five “Bancec factors” to aid circuit courts in their analysis:

1. 1. the level of economic control by the government;

2. 2. whether the entity's profits go to the government;

3. 3. the degree to which government officials manage the entity or otherwise have a hand in its daily affairs;

4. 4. whether the government is the real beneficiary of the entity's conduct; and

5. 5. whether adherence to separate identities would entitle the foreign state to benefits in United States courts while avoiding its obligations.

Id. at 823 (quoting Walter Fuller Aircraft Sales, Inc., 965 F.2d at 1380 n.7). We use these factors identified in Rubin to structure our analysis here. At the same time, we recognize that they, like the other extensive control tests our sister circuits have adopted,Footnote ⁸ are meant to aid case-by-case analysis rather than establish a “mechanical formula” for identifying extensive control. Bancec, 462 U.S. at 633.

2. Bancec’s scope

PDVSA and the Bondholders raise together six challenges to the District Court's inquiry under Bancec: that (i) a sovereign's extensive control, alone, cannot allow courts to ignore the separateness of a corporation from the country it is in, (ii) Crystallex must show PDVSA acted as Venezuela's agent against Crystallex, (iii) we must consider the third-party interests of PDVSA's bondholders, (iv) extensive control must be shown by clear and convincing evidence, (v) the Bancec inquiry must be examined in light of current circumstances, particularly the limited control of the Guaidó regime over PDVSA; and (vi) Bancec requires that courts also balance equities when they consider whether to discard an instrumentality's presumption of separateness. We address each argument in turn.

1. Factor 1: the level of economic control by the government

Venezuela wields extensive economic control over PDVSA. Venezuela's bondholder disclosures in 2011 and 2016 stated: “[G]iven that we are controlled by the Venezuelan government, we cannot assure you that [it] will not, in the future, impose further material commitments upon us or intervene in our commercial affairs in a manner that will adversely affect our operations, cash flow and financial results.” JA-645; 1921. They leave no doubt Venezuela has the power to intervene and mandate PDVSA's economic policies. In 2011 PDVSA disclosed that “the Venezuelan government required us to acquire several electricity generation and distribution companies, as well as certain food companies . . . [,] and required . . . us to acquire the assets of [another Venezuelan company] at a price to be determined in the future.” JA-608–09. The District Court found that Venezuela requires PDVSA to fund

Del. Crystallex, 333 F. Supp. 3d at 409. In 2014 and 2015, PDVSA was required to contribute U.S. $974 million and U.S.$3.3 billion, respectively, to social programs and projects. Id.

As its 2011 offering circular to prospective bondholders explains, PDVSA's legal obligations stem in part from the Venezuelan constitution, which endows the State with significant control over PDVSA and the oil industry in the country. Article 12 provides hydrocarbon deposits within the territory of the state are the property of the Republic, JA-1722, and Article 302 reiterates “the State reserves to itself, through the pertinent organic law, and for reasons of national convenience, petroleum activity,” id. at 1558. Article 303 addresses the state's control over PDVSA specifically: “For reasons of economic and political sovereignty and national strategy, the State shall retain all shares in Petroleos de Venezeula, S.A.” E.g., JA-350; 386. In addition, as PDVSA disclosed to bondholders, under Article 5 of the Organic Hydrocarbons Law, its revenues “are required to be used to finance health and education, to create funds for macroeconomic stabilization and to make productive investments, all in favor of the Venezuelan people. Those social commitments may affect our ability to place additional funds in reserve for future uses and, indirectly, our commercial affairs.” Id. at 608.

The District Court also found that Venezuela exercises its economic control over PDVSA by dictating to whom PDVSA must sell oil to and at what price. The 2011 circular explains that “[t]he Venezuelan government, rather than the international market, determines the price of products . . . sold by us through our affiliates in the domestic market.” Id. at 643. Thus Venezuela “dictates the severely discounted price at which PDVSA must sell its product to Venezuelan citizens” and “forces PDVSA to ‘sell’ oil to third parties for no, or de minimis, consideration.” Del. Crystallex, 333 F. Supp. 3d at 408 (internal quotation marks and citations omitted). Per Venezuela's “Petrocaribe” agreements with its allies, PDVSA must provide oil to member states at a steep discount on price, along with a two-year grace period for payments, on a payment schedule up to 25 years in length with interest rates as low as 1% (with the option, on Venezuela's part, to accept deferred payments directly in the form of goods and services). JA-928. Under the agreement, Venezuela “may acquire at preferential prices . . . sugar, bananas, or other goods or services to be determined, which are adversely affected by trade policies of rich countries.” Id. In other words, as the District Court found, PDVSA provides oil while Venezuela maintains the right to accept payment. PDVSA's financial reports show that, from 2010 to 2016, it contributed approximately USD $ 77 billion under the Petrocaribe agreements. Id. at 1178.

The District Court wasn't finished: “Venezuela manipulates PDVSA's conversion of U.S. Dollars to Venezuelan Bolivars to leverage PDVSA's revenues. . . . PDVSA is required to convert foreign currency into Venezuelan Bolivars at an artificially low U.S. Dollar to Bolivar exchange rate (which is approximately 1/500th of the market rate).” Del. Crystallex, 333 F. Supp. 3d at 410 (internal quotation marks omitted).

Finally, Venezuela controls PDVSA's debt structure. Dr. Roberto Rigobon's supplemental declaration states that in November 2017 President Maduro decreed that Venezuela would restructure the external debt of both Venezuela and PDVSA. JA-2013. He also provided evidence that Venezuela made a $1.2 billion payment on a 2017 PDVSA bond. Id. at 2014.

2. Factor 2: whether the entity's profits go to the government

As PDVSA's lone shareholder, all profit ultimately runs to the Venezuelan government. In addition, PDVSA pays Venezuela taxes and royalties on the oil it produces. The Rigobon Declaration contends that PDVSA pays “extraordinary taxes,” i.e., taxes at an artificial rate designed to collect more of PDVSA's revenues. Id. at 1172.

3. Factor 3: the degree to which government officials manage the entity or otherwise have a hand in its daily affairs

The Venezuelan government exercises direct and extensive control over PDVSA. President Maduro appoints PDVSA's president, directors, vice-presidents, and members of its shareholder council. Del. Crystallex, 333 F. Supp. 3d at 407–08. Crystallex introduced a declaration from Jose Ignacio Hernandez, a Venezuelan legal academic, which notes that it has been “commonplace” since 2002 for PDVSA's president also to serve as Venezuela's oil minister. JA-1195. “This arrangement allowed the Government to control the daily operations of PDVSA.” Id. PDVSA and Venezuela's Ministry of Petroleum and Mining share physical office space for its headquarters. Id. at 1196 & n.51. In a 2014 speech discussing the state of Venezuelan control over PDVSA since this reorganization, then-PDVSA President Rafael Ramirez Carreño, and the country's Vice Minister for Petroleum, stated that “we are one of the few oil producing countries in the world that has a strict and tight control over the sovereign management of its natural resources.” Id. at 594.

The military increasingly exercises control over PDVSA. In November 2017, President Maduro appointed Major General Manuel Quevedo as Petroleum Minister and PDVSA president. Id. at 2018. Earlier that year, he also created a new post—Executive Vice-President of PDVSA—and appointed Vice-Admiral Maribel del Carmen Parra de Mestre to the position. Id. at 1198.

Venezuela has also wielded substantial influence over PDVSA's employees through a series of politically motivated firings. The highest profile of these occurred in 2002, when President Chávez fired roughly 40% of the PDVSA workforce in response to a strike protesting his regime. Id. at 1054. Employees continue to face pressure from the state today. The District Court found that, “[a]s recently as July 2017, Venezuela continued to threaten to terminate PDVSA employees who were opposed to the governing regime.” Del. Crystallex, 333 F. Supp. 3d at 407. Employees face pressure to attend Socialist Party rallies and have been threatened with termination unless they voted in elections. Id. at 408.

4. Factor 4: whether the government is the real beneficiary of the entity's conduct

The District Court found that PDVSA's cheap oil to Venezuela's strategic allies also creates a mechanism whereby Venezuela extracts value from PDVSA's oil without paying the company. “Venezuela also uses PDVSA to achieve its foreign policy goals by committing PDVSA to sell oil to certain Caribbean and Latin American nations at substantial discounts, without PDVSA's consent. Even when those oil debts are repaid, the money is given to Venezuela, not PDVSA. . . .” Id. at 410.

PDVSA's actions with respect to this litigation also show how Venezuela is the real beneficiary of PDVSA's conduct. For example, “it is undisputed that PDVSA paid the administrative fees Venezuela incurred in connection with the arbitration with Crystallex, which amounted to around $249,000.” Id. And, when Venezuela expropriated the La Cristinas mines, it gave to PDVSA for no consideration a number of mining rights, including rights in Las Cristinas that it had expropriated from Crystallex. JA-1194. This seamless transfer of value between PDVSA and Venezuela also suggests an alter ego relationship.

5. Factor 5: whether adherence to separate identities would entitle the foreign state to benefits in United States courts while avoiding its obligations

Venezuela owes Crystallex from a judgment that has been affirmed in our courts. Any outcome where Crystallex is not paid means that Venezuela has avoided its obligations. It is likewise clear from the record that PDVSA, and by extension Venezuela, derives significant benefits from the U.S. judicial system. Its 2020 bonds are backed by the common stock and underlying assets of U.S.-based corporations, and hence disputes stemming from default will be subject to U.S. laws and presumably be resolved through the U.S. legal system.Footnote ¹³ See, e.g., Bayrock Exhibit 6 at 131–32, Crystallex Int'l Corp. v. Bolivarian Republic of Venezuela, F. Supp. 3d 380 (D. Del. 2018), ECF No. 99-1. Indeed, it is probable the U.S. legal system is the backstop that gives substantial assurance to investors who buy PDVSA's debt.

Nor does ignoring separate identities run against the equities here. PDVSA profited directly from Crystallex's injury: Venezuela transferred the rights to the expropriated mines to PDVSA for no consideration. Hence this factor too is satisfied.