The United States Trustee's motion to dismiss duly came before the court for hearing on May 3, 2000. John Ruebelmann appeared for the United States Trustee. Frank Cahill appeared for the debtor. After hearing the arguments of counsel and reviewing their memoranda, IT IS ORDERED:

        The United States Trustee's motion to dismiss is granted and this case is dismissed without prejudice.

Discussion

        The debtor married Joseph Matthieu, a civilian employee of the U.S. Army Corps of Engineers, in 1964. She became a citizen of the United States in 1966. The Matthieus have lived in Hawaii and Virginia but spent most of their time in Korea over the last 35 years. From 1983 through July of 1999 they were stationed in Korea. When Mr. Matthieu was assigned to the Corps' Anchorage office in July of 1999, he traveled to Anchorage with most of the couple's possessions. Unfortunately, the debtor owed import-export duties of over $310,000.00 to the government of Korea in conjunction with a business she operated there. The Korean government refused to allow her to leave that country without paying the duties, a task she could not accomplish.

        6 ABR 462          The debtor filed a chapter 7 petition on March 28, 2000. The United States Trustee has moved to dismiss on grounds of improper venue. The debtor admits that she has resided in Korea over the 180 day period preceding the filing of her petition. Her principal assets, household goods, are in Alaska, however, and have been since July of 1999. 28 U.S.C. § 1408(1) allows venue in a district where the principal assets of the debtor have been located for the 180 days prior to the filing of the petition. Since the debtor's primary assets have been in Alaska for more than 180 days prior to her filing for chapter 7 relief, Alaska is an appropriate venue for this case.

        The United States Trustee also seeks dismissal on the grounds that this court cannot grant the debtor any meaningful relief in bankruptcy. The nation of Korea is the debtor's sole creditor. The debtor has scheduled Korea as a priority tax creditor. Because priority claims for a tax or customs duty are not dischargeable under 11 U.S.C. § 523(a)(1), the United States Trustee maintains that the current proceeding is pointless. The debtor contends that 90% of Korea's $310,000.00 claim is for penalty rather than the original duty and is simply a general unsecured claim. Under 11 U.S.C. § 523(a)(7), however, her penalty is not dischargeable. Because neither the duty nor the penalty are dischargeable, the United States Trustee is correct. This bankruptcy filing will not provide the debtor with meaningful relief.

        There's a further problem in this case. If Korea enjoys immunity under the Foreign Sovereign Immunity Act,⁽¹⁾ then a bankruptcy discharge under 11 U.S.C. § 727(b) would have no effect on its claim. Sovereign immunity has not been abrogated as to foreign states under 11 U.S.C. § 727(b). 11 U.S.C. § 106(a)(1)         6 ABR 463  abrogates sovereign immunity as to many sections of Title 11,⁽²⁾ but not § 727. Additionally, none of the exceptions to immunity set forth in 28 U.S.C. § 1605 apply here. Korea enjoys immunity and the court must respect the immunity of a foreign sovereign.⁽³⁾ The debtor cannot obtain any effective relief through a chapter 7 discharge and further proceedings are pointless. The United States Trustee's motion will therefore be granted. This case will be dismissed.

     DATED:     May 5, 2000

BY THE COURT


______________________________
DONALD MacDONALD IV
United States Bankruptcy Judge