US risks 'vicious cycle of retaliation' by hauling sovereigns to courts: Turkish lender Halkbank

By Betul Yuruk

NEW YORK (AA) – Halkbank, a state-owned Turkish lender, has called for the US to dismiss charges levelled against it in a case related to an alleged conspiracy to help Iran skirt American sanctions.

The Turkish lender warned that “haling sovereigns into US courts threatens a vicious cycle of retaliation against the United States.”

“No federal court has ever presided over the criminal trial of a foreign sovereign. Nor, apparently, has any other country’s court,” the bank argued in its petition to the US Supreme Court that will be taken up on Jan. 17.

It said many American government-owned corporations, including banks engaged in private lending, would be obvious targets for legal action.

The petition said the US could be exposed to prosecutions by the Taliban for drone strikes in Afghanistan, by Japan for the nuclear bombing of Hiroshima, or by Iran for the death of Gen. Qasem Soleimani, who was killed in an American airstrike in January 2020. ​​​​​​​

- Halkbank denies charges

US prosecutors have accused Halkbank of paying Iran in gold and cash, including by forging documents, in return for Iranian oil.

Prosecutors allege that Halkbank helped Iran transfer $20 billion of oil revenue, of which $1 billion was laundered using the US financial system.

Halkbank has rejected the accusations and pleaded not guilty to the charges last March.

The Turkish lender is seeking to have money laundering, bank fraud, and conspiracy charges dismissed on the grounds that it has sovereign immunity under the 1976 Foreign Sovereign Immunities Act.

The law limits the jurisdiction of American courts in lawsuits against foreign nations and their agencies.

An appeals court rejected the bank’s plea to have the case thrown out under the 1976 law, prompting an appeal to the top US court in May.

The US Justice Department has argued that the Foreign Sovereign Immunities Act applies only to civil cases, and not the type of criminal prosecution being pursued against Halkbank.

The Supreme Court has agreed only to hear the case, and has not weighed in on its merits.

The case has been ongoing since 2019, one year after Mehmet Hakan Atilla, the former deputy director general of the Turkish state lender, was convicted for participating in an alleged conspiracy to help Iran evade US sanctions.