NEW YORK (Reuters) – Halkbank on Monday urged the dismissal of a U.S. indictment accusing the state-owned Turkish lender of helping Iran evade American sanctions, saying it was immune from prosecution and that U.S. laws did not cover its alleged misconduct.
U.S. prosecutors have accused Halkbank of using money servicers and front companies in Iran, Turkey and the United Arab Emirates to evade sanctions, enable revenue from oil and gas sales to be spent on gold, and facilitate sham food and medicine purchases.
Halkbank pleaded not guilty on March 31 to bank fraud, money laundering and conspiracy charges.
A spokesman for Acting U.S. Attorney Audrey Strauss in Manhattan declined to comment. Halkbank’s trial is scheduled for March 1, 2021.
In a Manhattan court filing, Halkbank said its status as an “instrumentality” of Turkey shielded it from prosecution under principles of sovereign immunity.
Halkbank also said there is a “strong presumption” against applying U.S. criminal laws, such as the International Emergency Economic Powers Act it was accused of violating, to conduct outside the United States.
The bank said its only domestic connection was its alleged processing of transactions through domestic banks, but these were “peripheral” to the broader criminal case.
U.S. District Judge Richard Berman, who oversees the case, also presided over the January 2018 conviction of former Halkbank executive Mehmet Hakan Atilla and a related guilty plea by Reza Zarrab, a wealthy Turkish-Iranian gold trader.
Last month, Halkbank asked Berman to recuse himself because of possible bias. The judge has yet to rule.
Halkbank’s case gained renewed attention in a recent memoir by John Bolton, a former U.S. national security advisor.
Bolton said Turkish President Tayyip Erdogan gave U.S. President Donald Trump a memo saying Halkbank was innocent, and Trump told Erdogan he would “take care of things.”
Turkey later said Bolton’s book contained misleading presentations of Erdogan’s conversations with Trump.
(Reporting by Jonathan Stempel in New York; Editing by Sonya Hepinstall)
