Türkiye's State Lender Halkbank Cleared of US Federal Charges

A Manhattan federal judge dismissed the US Justice Department's criminal indictment against Türkiye's state-run lender Halkbank on Tuesday, ending a case that had strained relations between the two NATO allies for nearly 7 years.

The dismissal was carried out by US District Judge Richard Berman, based in Manhattan, following a deal announced in March between the Justice Department and Halkbank that had paused proceedings for 90 days to allow the bank to demonstrate compliance with its terms.

A Case Born in Trump's First Term

Halkbank was originally charged in 2019, during Trump's first term, with secretly transferring $20 billion in restricted funds, converting Iranian oil revenue into gold and cash, and using fake food shipment documentation to justify transfers of oil proceeds, all in alleged service of helping Iran evade US economic sanctions.

The bank pleaded not guilty and contested the prosecution on sovereign immunity grounds, arguing that as a Turkish state-owned entity it should be shielded from legal action in a foreign court.

The US Supreme Court rejected that argument in October last year, letting stand a lower court ruling that allowed the prosecution to proceed.

The Deal: No Money, No Admission

Under the terms of the agreement reached in March, no money changes hands and Halkbank did not admit criminal wrongdoing.

The bank is barred from entering transactions that benefit Iran and is required to submit to an independent monitor reviewing its sanctions and anti-money laundering compliance. Halkbank hired Ernst & Young to conduct that review.

The Justice Department said dropping the prosecution would further US interests in curbing support for Iran. Reuters reported that the settlement was announced after the Iran war began in February.

A Diplomatic Irritant Removed

The case had been a persistent source of friction between Washington and Ankara. Turkish President Recep Tayyip Erdogan once called the prosecution unlawful and "ugly."

After Erdogan and Trump met last year, Erdogan said Trump told him during a September meeting at the White House and in a subsequent phone call that "the Halkbank problem is finished for us."

The announcement of the March settlement sent Halkbank's shares soaring on the Istanbul stock exchange.

The dismissal now formally closes a case that had outlasted multiple rounds of diplomacy, a Supreme Court ruling, and a change in US administration, arriving at a moment when US-Türkiye ties are described as being at their best in decades.