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British prosecutors have requested the extradition of Anne Sacoolas over the crash in August last year in which 19-year-old Harry Dunn was killed while riding his motorbike.
"At the time the accident occurred, and for the duration of her stay in the UK, the US citizen driver in this case had immunity from criminal jurisdiction," a State Department representative said in a statement on Thursday.
"If the United States were to grant the UK’s extradition request, it would render the invocation of diplomatic immunity a practical nullity and would set an extraordinarily troubling precedent," it said.
Dunn's family has said Sacoolas was driving on the wrong side of the road at the time of the crash near an air force base in central England used by the US military.
Sacoolas was given diplomatic immunity and left Britain shortly after the accident. Her lawyer has said that she would not return voluntarily to Britain to possibly face jail for "a terrible but unintentional accident."
British Prime Minister Boris Johnson has said Sacoolas was wrong to use diplomatic immunity to leave Britain and has urged US President Donald Trump to reconsider the US position.
Dunn's parents met Trump at the White House in October. Trump hoped to persuade them meet to Sacoolas, who was in the building at the same time, but they declined.