The US Supreme Court on Wednesday gave Turkey’s state-owned lender Halkbank a chance to avoid US criminal charges for allegedly helping Iran evade economic sanctions.
America’s top court dismissed a lower court’s ruling that opened the path to prosecution and ordered the Manhattan-based second US Circuit Court of Appeals to reconsider Halkbank’s effort to dismiss the case.
US prosecutors in October 2019 issued a six-count indictment against Halkbank, including bank fraud and money laundering, over an alleged “multibillion-dollar scheme to evade US sanctions on Iran”.
The prosecutors accused it of converting oil revenue into gold and cash to Tehran’s benefit, and also of helping the Islamic Republic secretly transfer $20bn of restricted funds, at least $1bn of which they say was laundered through the American financial system.
In 2018, the bank’s deputy general manager, Mehmet Hakan Atilla, was found guilty and sentenced to two years and eight months in jail over similar charges levied against the state bank.
Reza Zarrab, a Turkey-based gold trader, pleaded guilty in the same case and testified against Atilla.
Zarrab said Turkish President Recep Tayyip Erdogan, who at the time was prime minister, personally authorised a transaction on behalf of Iran.
Erdogan has called the US government’s decision to charge the bank an “ugly, unlawful” step and has pushed for the case to be dropped.
The Turkish president reportedly lobbied the previous Donald Trump administration to drop the case, with Erdogan writing Trump a memo in 2018 insisting that Halkbank is innocent, according to a memoir by former US national security adviser John Bolton. Trump then told Erdogan he would “take care of things”.
Halkbank mounted a legal battle against the rulings. In its appeal to the Supreme Court, it called the prosecution “unprecedented” and said that the 2nd Circuit’s ruling “green lights future indictments of any sovereign state”.
Halkbank is owned by the Turkish government and argued the Foreign Sovereign Immunities Act (FSIA) shielded it from the jurisdiction of American courts.
Sovereign immunity protects countries from legal action in another country’s courts. The US government argued that it was not prosecuting a sovereign government, but foreign government-owned company, which it has been doing for decades.
The Supreme Court rejected the bank’s plea based on FSIA, but ruled that the 2nd Circuit Court did not fully take into account whether the bank had immunity under “common law” principles.
Source : MiddleEastEye