Halkbank loses latest bid to avoid US prosecution in sanctions case

A U.S. appeals court on Friday rejected a request by Türkiye’s Halkbank to reconsider a ruling that allows the U.S. Department of Justice (DOJ) to prosecute the state-owned bank for allegedly helping Iran evade U.S. sanctions.

Meanwhile, bank’s legal team has previously indicated that it may take the case to the U.S. Supreme Court, which had already ruled on the matter in the past.

The New York-based 2nd U.S. Circuit Court of Appeals declined to have its full bench review the case, affirming a decision from October.

In that ruling, a three-judge panel found that foreign state-owned companies, such as Halkbank, are not immune from prosecution related to commercial, non-governmental activities.

Halkbank’s legal argument

Halkbank had argued that the panel’s ruling violated international law, which generally protects one sovereign country from criminally charging another.

However, the appeals court did not find merit in this argument, reiterating that foreign state-owned entities are subject to U.S. laws in certain cases.

The case against Halkbank

U.S. prosecutors first charged Halkbank in 2019, accusing the bank of using money services and front companies to help Iran secretly transfer $20 billion in restricted funds.

Prosecutors allege that the bank also helped convert oil revenue into gold and cash to benefit Iranian interests and manipulated trade invoices to disguise the movement of funds.

Halkbank has pleaded not guilty to the charges, which include bank fraud, money laundering, and conspiracy.

The case has also strained U.S.-Türkiye relations, with Turkish President Recep Tayyip Erdogan calling the U.S. charges “unlawful” and an “ugly step.”