The U.S. Supreme Court has declined to hear an appeal from Turkey’s state-owned Halkbank, allowing fraud, money laundering, and conspiracy charges to proceed in the United States. The charges relate to allegations that Halkbank helped Iran evade American economic sanctions. Halkbank’s shares closed 10% lower in Istanbul following the news. The case, initiated by U.S. federal prosecutors in 2019, has strained U.S.-Turkey relations. Halkbank is a Turkish bank that provides various banking services to individuals, small and medium-sized enterprises, and large corporations. It plays a significant role in Turkey’s financial system, supporting economic development through lending and investment activities.
The Supreme Court had previously thrown out an earlier decision by a lower court that permitted the case to move forward but rejected a key defense mounted by the bank at that time. Prosecutors allege that Halkbank used money servicers and front companies in Iran, Turkey, and the United Arab Emirates to assist Iran in evading U.S. sanctions. According to prosecutors, the bank secretly transferred $20 billion of restricted funds and converted oil revenue into gold and cash for Iranian interests. They also allege that the bank documented fake food shipments to justify transfers of oil proceeds.
Halkbank has pleaded not guilty to the charges. The bank argued that as a Turkish state-owned entity, it should be immune from legal actions in other countries’ courts. In 2023, the Supreme Court rejected Halkbank’s contention that it was protected under the Foreign Sovereign Immunities Act. The Justice Department argued that “common law” principles do not shield foreign state-owned companies from criminal prosecution.
In a statement, Halkbank said it would continue to assert all its legal rights. The bank added, “Initiatives to find a legal ground of conciliation within the framework of the understandings between the United States and Turkey are also ongoing in a positive direction.”
