Halkbank's arguments heard in US Supreme Court

US Supreme Court justices heard arguments on Tuesday in a state-owned Turkish bank's appeal of a lower court ruling that had allowed the prosecution of the bank to proceed.

Turkey's state-owned Halkbank is accused by the prosecution of helping Iran evade American economic sanctions through alleged use of money servicers and front companies in Iran, Turkey and the United Arab Emirates, and is faced with charges including bank fraud, money laundering and conspiracy, to which it pleaded not guilty.

The accusations involve converting oil revenue into gold and then cash to benefit Iranian interests, and documenting fake food shipments to justify transfers of oil proceeds. US prosecutors also said Halkbank helped Iran secretly transfer $20 billion of restricted funds, with at least $1 billion laundered through the U.S. financial system.

Halkbank argues that it should be shielded from prosecution because, as an entity majority owned by the Turkish government, it has sovereign immunity on grounds provided by a 1976 US law called the Foreign Sovereign Immunities Act (FSIA) that limits the jurisdiction of American courts over lawsuits against foreign countries.

President Joe Biden's administration earlier stated that the law does not apply to criminal prosecutions and, even if it did, the bank's actions fall under the law's exception to sovereign immunity for misconduct involving commercial activities.

Halkbank's case has complicated US-Turkish relations, with Turkish President Recep Tayyip Erdogan calling the charges against the bank an "unlawful, ugly" step.

The justices raised numerous concerns about "curbing the US government executive branch's authority to make decisions involving national security, as well as the potential consequences of criminally prosecuting one of a foreign government's entities," Reuters said.

Justice Brett Kavanaugh said it would be "pretty bizarre" and "huge" for the court to tell a US president that "this court is going to prohibit your exercise of national security authority."

Justice Neil Gorsuch raised concerns that allowing the federal prosecution to proceed might open the door to US states targeting foreign nations as well.

Justice Sonia Sotomayor cautioned against giving federal or state prosecutors "the right to insult another nation by giving them this unbridled power to initiate suits."

The decision of the Supreme Court will be announced in an unspecified date, which, according to lawyers who spoke to Voice of America (VOA) Turkish, may be a couple of months later, or at the end of the year.