US Judge Dismisses Case Against Turkish Bank Halkbank Over Iran Sanctions Violations

A United States federal judge has ordered the dismissal of a criminal case against Turkish state-owned bank Halkbank, which was charged with violating sanctions on Iran. The case was dropped after Halkbank completed a compliance review.

US District Judge Richard Berman signed a ‘nolle prosequi’ order requested by US Attorney Jay Clayton to dismiss the case against Turkiye Halk Bankasi. US prosecutors had indicted the bank in 2019 on suspicion of involvement in a multibillion-dollar money-laundering scheme using Iranian oil and natural gas proceeds that breached sanctions on Tehran.

The Department of Justice had charged Halkbank with six counts of fraud, money laundering, and sanctions violations in what it described as one of the most serious sanctions evasion cases it had ever seen. In March, the Department of Justice announced a deferred prosecution agreement with Halkbank, under which it would dismiss the case following a successful compliance review of the bank’s programmes.

US officials cited Turkey’s assistance in securing the release of Israeli hostages in Gaza and a ceasefire in the war-torn Palestinian territory. In a joint request to Judge Berman on 10 June, signed alongside Halkbank’s counsel, US Attorney Clayton stated that the bank’s compliance obligations ‘have been satisfied,’ according to a 12-page letter.

To meet the terms of the deferred prosecution agreement, Halkbank engaged the Turkish affiliate of accounting firm Ernst & Young to review the bank’s compliance programme and examine whether any transactions benefited Iran or Iranian persons or entities. The review ‘identified no findings of non-compliance,’ the letter stated.