US Supreme Court weighs Turkish Halkbank request to stay clear of the cost.
The U.S. Supreme Court is scheduled to meet on Tuesday to hear arguments regarding a request by the state-owned bank Halkbank to be spared legal charges within the United States for allegedly helping Iran escape economic sanctions.
The justices are currently weighing Halkbank’s appeal against an earlier ruling by a lower court that was in the favor of the U.S. government that allowed the bank’s case to continue. The case will test Halkbank’s claim that it is safe from prosecution since it is a majority of government officials of the Turkish state, it enjoys sovereign immunity.
The bank claimed that its position is supported by the 1977 U.S. law called the Foreign Sovereign Immunities Act (FSIA) which restricts the jurisdiction of American courts in cases against foreign nations.
The administration of President Joe Biden claims that the law doesn’t apply to criminal cases and even in the event that it did the bank’s actions would fall within the law’s exception to sovereign immunity in cases of criminal conduct involving commercial activity.
Halkbank’s lawsuit has complicated U.S.-Turkish relations and has led to Turkish Turkey’s President, Tayyip Erdogan describing the 2019 American accusations against the bank as an “unlawful ugly” move.
Prosecutors have accused Halkbank for converting the oil revenues into gold, and later cash to support Iranian interests. It also documented fake food deliveries to justify the transfer of oil profits.
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They also claimed that Halkbank was a key player in helping Iran to secretly transfer $20 billion in restricted funds, including the least amount of $1 billion being remitted by the U.S. financial system.
Halkbank has admitted not in connection with bank fraud and money laundering allegations over the suspected use of money servicers as well as front businesses within Iran, Turkey and the United Arab Emirates to evade sanctions.
The 2nd U.S. Circuit Court of Appeals in 2021 decided against Halkbank and held that even in the event that the FSIA protected this bank from liability, it was not the case that the activity for which it was convicted is still subject to the commercial-activity exemption.
The court noted that international law does not prohibit the prosecution of another country within its own courts, Halkbank told the Supreme Court in a document that prior to the rulings of this matter “no court had ever authorized the criminal trial of a sovereign from another country or its agencies.”
The Justice Department disagreed, calling Halkbank’s claims”unprecedented.
“Federal criminal prosecutions against foreign government officials go all the way back to the Founding period,” the government said in a statement, adding that as commercial enterprises expanded their operations in the late 20th-century, “they weren’t excluded,” the department said in a report.