By Luc Cohen (Reuters) -The Supreme Court declined on Monday to hear another bid by Turkey’s state-owned lender Halkbank to avoid fraud, money laundering and conspiracy charges in the United States for allegedly helping Iran evade American economic sanctions. The justices turned away Halkbank’s appeal of a lower court’s ruling that let the criminal case […]
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US Supreme Court rejects challenge by Turkey’s Halkbank to prosecution
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By Luc Cohen
(Reuters) -The Supreme Court declined on Monday to hear another bid by Turkey’s state-owned lender Halkbank to avoid fraud, money laundering and conspiracy charges in the United States for allegedly helping Iran evade American economic sanctions.
The justices turned away Halkbank’s appeal of a lower court’s ruling that let the criminal case brought by the U.S. government proceed, allowing that decision to stand. Halkbank shares closed 10% lower in Istanbul on the news.
The Supreme Court in 2023 threw out a previous decision by the same lower court that had permitted the case to move forward but at that time rejected a key defense mounted by the bank.
Brought by U.S. federal prosecutors in 2019, the case has been a thorn in U.S.-Turkey relations, with Turkish President Tayyip Erdogan calling it an “unlawful, ugly” step.
Halkbank has pleaded not guilty.
The Supreme Court decision not to hear Halkbank’s appeal clears the way for a possible trial unless both sides settle.
In a statement, Halkbank said it would continue asserting all its legal rights.
“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,” the bank added.
Prosecutors with the Manhattan U.S. Attorney’s office accused Halkbank of using money servicers and front companies in Iran, Turkey and the United Arab Emirates to help Iran evade U.S. sanctions.
The bank secretly transferred $20 billion of restricted funds, converted oil revenue into gold and cash to benefit Iranian interests and documented fake food shipments to justify transfers of oil proceeds, according to prosecutors.
In asking the Supreme Court to take up the case, Halkbank argued that as a Turkish state-owned entity it should be immune from legal actions in another country’s courts.
In 2023, when the Supreme Court rejected Halkbank’s contention that it was protected under the federal Foreign Sovereign Immunities Act, it directed the Manhattan-based 2nd U.S. Circuit Court of Appeals to consider whether common law provided immunity. Common law refers to legal principles developed over centuries by judges, not by specific statutes.
The 2nd Circuit considered that issue and last year rejected Halkbank’s argument that common law principles immunized it from prosecution related to commercial, nongovernmental activities.
President Donald Trump’s administration asked the Supreme Court to turn away Halkbank’s appeal of that 2nd Circuit decision. The Justice Department told the Supreme Court on August 6 that “common law” principles do not shield foreign state-owned companies from criminal prosecution.
(Reporting by Luc Cohen in New York; Editing by Will Dunham and Matthew Lewis)