US Solicitor General Elizabeth Prelogar has replied to Turkish state-owned lender Halkbank’s arguments to avoid criminal charges in a case that has strained US relations with NATO ally Turkey, saying the bank has no claim of immunity from prosecution under the law, the Voice of America’s (VOA) Turkish Service reported on Thursday.
Federal prosecutors in New York in 2019 brought charges against Halkbank, accusing it of money laundering, bank fraud and conspiracy for allegedly helping Iran evade economic sanctions. They claim the bank participated in a scheme to launder about $20 billion of Iranian oil and natural gas proceeds in violation of US sanctions against Iran.
Halkbank previously appealed a lower court’s decision rejecting the bank’s contention that it was immune from US prosecution under a 1976 law called the Foreign Sovereign Immunities Act (FSIA), which limits the jurisdiction of American courts over lawsuits against foreign countries because the business is majority-owned by the Turkish government.
According to VOA, Prelogar said in a 62-page petition submitted to the US Supreme Court that Halkbank had no claim of immunity under the FSIA and that there was no legal obstacle for the bank to be prosecuted in the US.
“The Supreme Court should reject Halkbank’s appeal and render a decision against the bank,” Prelogar was quoted as saying.
The solicitor general further stated that Reza Zarrab, a Turkish-Iranian gold trader who US prosecutors said had close ties to Turkish President Recep Tayyip Erdoğan, pleaded guilty and testified in the trial of Mehmet Hakan Atilla, a Halkbank executive who was arrested in 2017 and subsequently convicted.
The charges against Halkbank stemmed from an investigation that first became public with the 2016 arrest of Zarrab. Atilla was convicted of helping evade US sanctions and sentenced to 32 months in prison.
Halkbank’s first appeal hearing at the US Supreme Court will be held on Jan. 17, VOA said.
The bank previously pleaded not guilty to charges of bank fraud, money laundering and conspiracy over allegations that it used money servicers and front companies in Turkey, Iran and the United Arab Emirates to evade sanctions.
Erdoğan called the US government’s decision to charge the bank an “ugly, unlawful” step and has pushed for the case to be dropped.