Turkey’s state-owned Halkbank can be prosecuted over violating U.S. sanctions, U.S. appeals court ruled on Friday, Reuters reported.
The court rejected Halkbank’s bid to dismiss an indictment accusing the lender of helping Iran evade American sanctions, the wire news agency noted.
In June, Halkbank’s chief executive officer Osman Arslan told Turkish media that Turkish officials were in contact with their U.S. counterparts and the judiciary in a bid to find common ground for a dismissal. Since then, there has been no report speculating either way about the ruling of the Appeals court.
The state-owned Turkish lender stands accused of bank fraud, money laundering and conspiracy over its involvement in a plot to trade gold for Iranian oil and natural gas, helping Tehran evade U.S. sanctions imposed over its nuclear programme. The bank has pleaded not guilty to the charges.
Halkbank argued in a federal court in New York that it was immune from prosecution. The 2nd U.S. Circuit Court of Appeals said even if the Foreign Sovereign Immunities Act shielded the bank, the charge against Halkbank fell under the commercial activity exception, Reuters reported.
U.S. prosecutors also accused Halkbank of assisting Iran secretly transfer $20 billion’s worth of restricted funds, with at least $1 billion laundered through the U.S. financial system.
The bank had argued it was immune from prosecution under the federal Foreign Sovereign Immunities Act because it was “synonymous” with Turkey, which has immunity under that law.
Reza Zarrab, the Turkish-Iranian businessman convicted of spearheading the scheme, told prosecutors as a state witness during his trial that bribes were paid to former Turkish minister Mehmet Zafer Çağlayan, who was indicted alongside him.
At the time of Zarrab and Çağlayan’s indictment, Turkish Economy Minister Nihat Zeybekçi defended his predecessor by saying it was “of no concern to Turkey if Çağlayan acted against the interests of other countries”.
Zarrab, during the trial in late 2017, testified that Turkish President Recep Tayyip Erdoğan had allowed the sanctions-busting scheme and Çağlayan had taken millions of dollars in bribes to cover it up. Turkish government officials, including the president himself, claimed that the trial was a U.S. plot to undermine his government.
Halkbank previously refused to even acknowledge the charges for several months, and after filing a not-guilty plea, sought the removal of the presiding Judge Richard Berman of the Southern District of New York for being biased against the Turkish government. Judge Berman served in both the Zarrab and Atilla cases. Halkbank’s lawyers accused the judge for being too close to Islamic preacher Fethullah Gülen, and acting on behalf of his followers.
Judge Berman has rejected these claims, writing that Halkbank had “astonishingly and falsely” claimed he supported FETÖ, the name Ankara uses to refer to one Fethullah Gülen Terrorist Organisation, which accuses it of being behind the failed coup attempt of July 15, 2016.
Ahval