US Supreme Court Rejects Halkbank Appeal in Sanctions Case
The US Supreme Court has declined to hear an appeal by Turkey's state-owned lender Halkbank, leaving in place lower court rulings that allow fraud, money laundering, and conspiracy charges to proceed. These charges stem from allegations that Halkbank helped Iran evade US economic sanctions.
Details of the Supreme Court Decision
The justices' decision means that the US government's criminal case against Halkbank, initiated in 2019, can move forward. This ruling allows the lower court’s decision to stand. A previous attempt by the bank to dismiss the case was also rejected in 2023, although the Supreme Court had at that time thrown out a previous decision by the same lower court. The case has been a persistent point of contention in US-Turkey relations.
Allegations Against Halkbank
US federal prosecutors accuse Halkbank of utilizing money service providers and front companies in Iran, Turkey, and the United Arab Emirates (UAE) to facilitate Iran's circumvention of US sanctions. According to prosecutors, Halkbank allegedly moved around $20 billion in restricted funds, converted oil revenue into gold and cash for Iranian interests, and created documentation for fake food shipments to justify oil proceeds transfers.
Halkbank's Defense and Legal Arguments
Halkbank has pleaded not guilty and previously argued that, as a Turkish state-owned entity, it should be immune from legal action in US courts under the Foreign Sovereign Immunities Act. In 2023, the Supreme Court rejected this argument, directing the 2nd U.S. Circuit Court of Appeals to consider whether common law provided immunity. The 2nd Circuit later rejected Halkbank's argument that common law principles shielded it from prosecution related to commercial activities.
Implications and Future Outlook
With the Supreme Court's decision, a trial is now possible unless a settlement is reached between the two sides. Halkbank has stated that it will continue to assert its legal rights. The case continues to be a sensitive matter in US-Turkey relations, with Turkish President Recep Tayyip Erdogan having previously criticized the case as an "unlawful, ugly" step. The rejection sets a precedent that potentially limits the ability of foreign state-owned companies to claim immunity from prosecution in the US.
