The Supreme Court dismissed the primary arguments by a Turkish bank seeking to have a lawsuit accusing it of assisting Iran in evading U.S. sanctions dropped. However, the court has sent the case back for further examination.
Turkey-owned Halkbank contended that the Foreign Sovereign Immunities Act of 1976 granted foreign states complete immunity from criminal prosecution in U.S. courts and that federal courts lacked jurisdiction over the case.
Justice Brett Kavanaugh, writing on his behalf and six of his eight colleagues, stated, “We disagree with Halkbank on both points.” Kavanaugh, however, directed the case to a lower court for a more thorough review, saying the lower court had failed to “consider the various arguments regarding common-law immunity that the parties had argued in this Court fully.”
Among the allegations against Halkbank is that it participated in “the largest-known conspiracy to evade the United States’ economic sanctions on Iran” by laundering billions of dollars from selling Iranian oil and natural gas. According to the government, in collaboration with an Iranian-Turkish businessman, the bank devised methods for Iran to access the funds, including gold shipments and fabricated food shipments. These schemes allegedly “freed up approximately $20 billion of restricted Iranian funds.”
The businessman, Reza Zarrab, has entered a guilty plea. The case was initiated during the Trump administration and continued by the Biden administration.
The Supreme Court’s decision to return the case to a lower court indicates that the legal battle involving Halkbank is far from over. The Trump and Biden administrations have shown their commitment to holding the Turkish bank accountable for its alleged role in helping Iran bypass U.S. economic sanctions.
As the case continues, it could strain diplomatic relations between the United States and Turkey. Ankara has previously expressed support for Halkbank, and the case outcome may have implications for the broader U.S.-Turkey relationship. Both countries must maintain open lines of communication and work collaboratively to address any concerns.
The Halkbank case serves as a reminder of the importance of upholding international sanctions and ensuring that financial institutions operate within the boundaries of the law. The ongoing investigation into Halkbank’s actions underscores the U.S. government’s commitment to enforcing sanctions and combatting financial crimes.
