In a significant legal battle, Turkey’s state-owned Halkbank has lost its latest attempt to avoid prosecution by the U.S. government over charges related to sanctions violations. A U.S. appeals court has rejected Halkbank’s request to reconsider a ruling that would have granted the bank immunity from criminal prosecution. This ruling is the latest chapter in a long-running legal saga that has put the Turkish bank under intense scrutiny and strained U.S.-Turkey relations.
The Legal Fight: What’s at Stake?
Halkbank is accused of helping Iran evade U.S. sanctions through a series of illegal financial transactions. The U.S. government charges that the bank facilitated a large-scale scheme where Iranian funds were transferred secretly and disguised as legitimate transactions. These actions, prosecutors say, allowed Iran to access billions of dollars in restricted funds, providing financial support to Iranian interests despite U.S. sanctions meant to limit Iran’s ability to operate globally.
The U.S. sanctions, imposed in an effort to curb Iran’s nuclear program and other controversial activities, make it illegal for foreign companies to do business with Iranian entities. U.S. authorities claim that Halkbank played a significant role in helping Iran transfer around $20 billion in restricted funds, which were disguised through fake business deals, such as fake food shipments and using front companies to disguise the transactions.
Halkbank, however, strongly denies these charges and maintains that it acted within the bounds of the law. The bank has pleaded not guilty to accusations of money laundering, conspiracy, and bank fraud, stating that it was merely engaged in regular business activities. The case has sparked tension between Turkey and the United States, with Turkish officials arguing that the charges are politically motivated.
The Court’s Ruling: Why Bank Lost
In October, a three-judge panel from the 2nd U.S. Circuit Court of Appeals delivered a blow to Halkbank by rejecting the bank’s argument that it should be immune from prosecution. Halkbank had sought immunity, arguing that as a state-owned entity, it should be shielded from U.S. criminal charges under international law. However, the court found no legal basis for granting such immunity in this case.
U.S. Court Rules Turkey’s Halkbank Can Be Prosecuted for Iran Deal
The court ruled that foreign state-owned companies do not have absolute immunity from U.S. prosecution when it comes to commercial and non-governmental activities. This ruling effectively paved the way for U.S. authorities to proceed with the criminal charges against Halkbank. In response, Halkbank sought a reconsideration of the decision, asking the entire 2nd Circuit Court of Appeals to review the case. However, this request was denied on Friday, further solidifying the court’s stance on the matter.
Halkbank’s legal team argued that the ruling goes against a well-established principle of international law, which suggests that one country cannot charge another country’s entities with criminal offenses. Despite this argument, the court’s decision stands, and Halkbank remains at risk of prosecution in the United States.
What’s Next for Halkbank?
Following the latest setback, Halkbank’s legal team has indicated that they may take the case to the U.S. Supreme Court. This is not the first time the issue has reached the highest court in the country. In fact, the U.S. Supreme Court had previously ruled on aspects of the case back in 2021. Despite the appeal, there’s no certainty on whether the Supreme Court will agree to hear the case again.
For now, the case remains a significant point of contention between the U.S. and Turkey. Turkish President Tayyip Erdogan has publicly criticized the charges against Halkbank, calling them an “unlawful” and “ugly” move by the United States. The dispute has become a symbol of the ongoing tensions between the two countries, which have disagreed on a range of issues in recent years.
Halkbank’s future in this legal battle remains uncertain, but one thing is clear: the bank’s struggle to avoid U.S. prosecution is far from over. The court’s latest ruling means that the case will continue to unfold, and the Turkish bank could soon find itself facing serious legal consequences in the United States.
