By Jonathan Stempel
(Reuters) – Turkey’s state-controlled Halkbank asked the U.S. Supreme Court to throw out a lower court ruling saying it could be prosecuted on criminal charges it helped Iran evade American sanctions.
In a petition posted this week on the Supreme Court’s website, Halkbank said it was entitled to “absolute immunity” under the common law because the sovereign immunity that countries have extends to their instrumentalities.
Halkbank pleaded not guilty to fraud, money laundering and conspiracy charges over its alleged use of money servicers and front companies in Iran, Turkey and the United Arab Emirates to evade sanctions.
Prosecutors said Halkbank helped Iran secretly transfer $20 billion of restricted funds, and helped launder money through the U.S. financial system.
In October, the federal appeals court in Manhattan decided that Halkbank could be prosecuted.
“The decision below thus authorizes the first criminal trial of a foreign sovereign instrumentality in world history,” Halkbank said in its Supreme Court petition.
Halkbank also said the decision exposed U.S. agencies such as the Navy, CIA and Export-Import Bank to possible criminal prosecution outside the country, and it was “only a matter of time” before other sovereigns targeted their diplomatic adversaries.
The case began in 2019, and is making its second trip to the Supreme Court.
In 2023, the court said Halkbank wasn’t shielded from prosecution under the federal Foreign Sovereign Immunities Act of 1976, but left open whether the bank deserved immunity under the common law, based on court decisions rather than statutes.
The Supreme Court may not decide until its term beginning in October whether to hear Halkbank’s appeal.
Halkbank said it is 91.49% owned by the Turkish Wealth Fund, which is owned by Turkey.
The case has been a thorn in U.S.-Turkey relations, with Turkish President Tayyip Erdogan calling it an “unlawful, ugly” step.
The case is Turkiye Halk Bankasi AS v. United States, U.S. Supreme Court, No. 24-1144.
(Reporting by Jonathan Stempel in New York; editing by Diane Craft)
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