The United States has reached a deal with Turkey’s state-run Halkbank to resolve a long-running criminal case accusing the lender of helping Iran evade US sanctions, potentially removing one of the most persistent sources of tension between Washington and Ankara, Reuters reported.
The agreement, which still requires approval from US District Judge Richard Berman, would end years of legal disputes that have strained relations between the United States and Turkey, two NATO allies.
Under the proposed arrangement, Halkbank would agree not to engage in transactions that benefit Iran and would appoint an independent monitor to review its sanctions and anti–money laundering compliance, Reuters reported.
No financial penalty is included in the agreement, and the criminal charges are expected to be dismissed if the bank complies with the monitoring requirements.
US Attorney Jay Clayton said the agreement advances Washington’s efforts to combat terrorist financing and financial support for the Iranian government.
“This agreement by Halkbank furthers the United States’ compelling interests in combatting terrorist financing and financial support for the Government of Iran,” Clayton said in a letter to the judge, according to Reuters.
Halkbank’s agreement was disclosed during the ongoing US-Israeli war on Iran.
The case has long been a source of tension between Washington and Ankara. Turkish President Recep Tayyip Erdoğan previously described the prosecution as unlawful and “ugly.”
Halkbank said in a statement that it does not admit any criminal wrongdoing but that the agreement would fully resolve the case.
The bank’s shares listed on the Istanbul exchange rose 10 percent on Monday after news of the agreement emerged, the maximum daily increase allowed on the exchange.
Case dates back to 2019 sanctions charges
US prosecutors charged Halkbank in 2019 with fraud, money laundering and conspiracy, alleging that the bank helped Iran bypass American sanctions through complex financial transactions.
According to prosecutors, the scheme involved moving about $20 billion of restricted Iranian funds through money transfers and front companies in Iran, Turkey and the United Arab Emirates. Investigators said the funds were sometimes converted into gold and cash and disguised through fictitious food trade transactions.
Halkbank pleaded not guilty to the charges.
The case was linked to several earlier prosecutions, including that of Turkish-Iranian gold trader Reza Zarrab, who pleaded guilty in 2017 to bank fraud, money laundering and conspiracy and later testified against former Halkbank executive Mehmet Hakan Atilla.
Atilla was convicted in the United States in 2018 on bank fraud and conspiracy charges and served most of a 32-month prison sentence before returning to Turkey in 2019, where he has denied wrongdoing.
Long legal battle in US courts
The case against Halkbank has followed a complex path through the US court system.
The US Supreme Court considered the case in 2023, ruling that laws protecting foreign governments from civil liability did not automatically shield them from criminal prosecution. A federal appeals court later concluded that Halkbank was not entitled to immunity under common law, allowing the case to proceed.
Deferred prosecution agreements allow companies to avoid criminal conviction if they meet specified conditions for a period of time, after which the charges are dismissed.
Legal experts say courts generally have limited authority to reject such agreements.
Kaleb Byars, a professor at Mercer University School of Law, told Reuters that judges typically must approve deferred prosecution agreements unless they clearly violate legal precedent.
Diplomatic dimension
Reuters reported that Turkish officials had previously proposed settling the case for about $100 million during a September meeting between Erdoğan and US President Donald Trump at the White House.
After the meeting, Erdoğan said Trump had told him that “the Halkbank problem is finished for us.”
The proposed agreement comes at a time when relations between Washington and Ankara have improved following Trump’s return to the presidency last year, potentially removing one of the most contentious issues in bilateral ties.