US Supreme Court to hear Turkish state bank to avoid charges

The U.S. Supreme Court on Monday accepted to hear Turkey’s  state-owned Halkbank's appeal to avoid criminal charges of money laundering, bank fraud and conspiracy for allegedly helping Iran evade economic sanctions, in a move that surged Halkbank’s shares in Turkey’s stock exchange. 

Halkbank had appealed a lower court's decision that rejected a plea saying it was immune from U.S. prosecution, in a case where the bank was charged with laundering about $20 billion of Iranian oil and natural gas proceeds in violation of U.S. sanctions against Iran.

The Supreme Court’s decision came as a surprise as it denies most appeals. In its last term, it received 5,307 filings and heard arguments in 72 cases. Halkbank’s shares skyrocketed by 10% in the Istanbul Stock Exchange after the news of the decision. 

President Tayyip Erdogan has called the U.S. government's decision to charge the bank an "ugly, unlawful" step and has pushed for the case to be dropped.

The case first became public when Reza Zarrab, a Turkish-Iranian gold trader who U.S. prosecutors said had close ties with Erdogan. 

Zarrab pleaded guilty, explained in detail the money scheme and also testified against Mehmet Hakan Atilla, a Halkbank executive who was later sentenced to 32 months in prison with the same charge. He returned to Turkey in July 2019 after leaving prison.

If Halkbank at the end of the is found guilty as charged, it will be frozen out of the U.S. financial system, which could be a hard blow for the Turkish banking sector.