U.S. Court Rejects Halkbank's Request for Reconsideration

(Reuters) – A U.S. appeals court on Friday rejected a request by Turkey's Halkbank to reconsider a ruling allowing the U.S. Department of Justice to prosecute the state-owned bank for allegedly helping Iran evade U.S. sanctions.

The New York-based 2nd U.S. Circuit Court of Appeals declined to have the full court revisit a three-judge panel's October decision, which dismissed Halkbank's argument for immunity from prosecution.

The panel indicated there is no basis under longstanding common law principles for absolute immunity for foreign state-owned companies concerning commercial, nongovernmental activities related to U.S. prosecution.

In its request for reconsideration, Halkbank argued the ruling conflicts with the established principle of international law that prohibits one sovereign from criminally charging another.

The bank's lead attorney did not respond to requests for comments, but authorities have previously indicated a possible appeal to the U.S. Supreme Court, which has engaged with the case before.

In 2019, U.S. prosecutors charged Halkbank with using money servicers and front companies in Iran, Turkey, and the United Arab Emirates to circumvent sanctions. Prosecutors allege that Halkbank enabled Iran to quietly transfer $20 billion of restricted funds, convert oil revenue into gold and cash for Iranian interests, and fabricate food shipments to justify oil proceeds transfers.

Halkbank pleaded not guilty to bank fraud, money laundering, and conspiracy charges. The case has strained U.S.-Turkey relations, with Turkish President Tayyip Erdogan denouncing the charges as an "unlawful, ugly" measure.