Turkish bank claims immunity from US prosecution in case related to evading Iran sanctions

A lawyer for Turkey’s second largest state bank Halkbank told a US appeals court Monday that the bank was immune from US prosecution and an indictment accusing it of helping Iran dodge the US-imposed sanctions should be terminated.

In arguments before an appeals court in New York’s Manhattan, a lawyer representing Halkbank Simon Latcovich said the US government had no basis to claim criminal jurisdiction over the bank, and that the bank was “synonymous” with Turkey for purposes of immunity.

The state-owned Turkish lender has pleaded not guilty to bank fraud, money laundering and conspiracy charges over its alleged use of money servicers and front companies in Iran, Turkey and the United Arab Emirates to evade US sanctions.

The case, dragging on for years, has deeply affected relations between the US and Turkey.

In 2017, Turkish President Recep Tayyip Erdogan had rejected the “trial” of a Turkish bank executive in a US court on charges of evading Washington’s sanctions against Iran, saying courts in the United States “cannot put Turkey on trial”.

US courts “can never try my country,” Erdogan told members of his ruling Justice and Development Party (AKP) in December 2017.

Weeks later, Ankara slammed a US court ruling that convicted a Turkish banker as “unjust and unfortunate,” saying the trial amounted to unprecedented interference in Turkey’s internal affairs.

“It is an unjust and unfortunate development that Halkbank Deputy General Manager Mehmet Hakan Atilla was found guilty,” Turkey’s Foreign Ministry said in a statement in January 2018.

In October 2019, the US prosecutors filed criminal charges against the bank over accusations of participating in a multi-billion-dollar scheme to evade Washington's economic sanctions on Iran.

They claimed that Halkbank used a web of front companies to allow Iran to spend revenues from its gas and oil sales on international markets between 2012 and 2016.

In response, the Turkish bank slammed the US for using sanctions related to Iran over its standoff with Turkey in war-torn Syria.

“These were filed as part of the sanctions introduced against our country by the US government in response to Operation Peace Spring,” the bank said of the military operation that time.

It termed the decision an “unprecedented legal overreach”, saying the lender had no branches or employees in the US and falls outside of the US Justice Department’s jurisdiction.

While the legal issue has affected relations between Turkey and the US, it has brought Tehran and Ankara closer with deeper cooperation.

The two sides have agreed to step up their economic cooperation and raise their annual trade to $30 billion.

Ankara has also denounced the unilateral US sanctions on Tehran, saying it is determined to bolster trade with the Islamic Republic.

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