US Judge Drops Criminal Prosecution of Turkey's Halkbank

The decision by U.S. District Judge Richard Berman marks a significant shift in the bank's status, triggering an 8.4% surge in its shares on the Istanbul stock exchange. Prosecutors initiated the case in 2019, accusing the bank of funneling $20 billion in restricted funds to help Iran evade American economic sanctions. Under the terms of the settlement, Halkbank avoids admitting any criminal wrongdoing, and no financial penalties were imposed.

Prosecutor Michael Lockard indicated that the agreement emerged from broader diplomatic efforts involving Turkey to secure a ceasefire between Israel and Hamas. During the legal proceedings, the bank maintained its innocence, arguing that as a state-owned entity, it should remain immune from foreign prosecution. The U.S. Department of Justice eventually determined that dropping the case would serve national interests by ensuring the bank adheres to strict anti-money laundering and sanctions compliance protocols moving forward. To verify these commitments, the bank hired Ernst & Young to monitor its transactions; prosecutors confirmed that the firm found no instances of noncompliance during a 90-day probationary period. Halkbank Chief Executive Recep Süleyman Özdil stated that the conclusion of the case is expected to bolster the bank’s ability to secure foreign funding.