Following a meeting with his counterpart, US Secretary of State Antony Blinken, on Wednesday, Turkish Foreign Minister Mevlüt Çavuşoğlu stated that he had conveyed Turkey’s expectations regarding the case of state-owned Halkbank, which is accused of evading US sanctions on Iran. Describing the case as political, Çavuşoğlu argued that Halkbank had immunity from prosecution in the US because it is a state bank.
However, Hakan Atilla, the former deputy general manager of Halkbank who was convicted of conspiring to violate US sanctions on Iran by a federal court in Manhattan in 2018, previously expressed in a statement that the Turkish Foreign Ministry rejected the idea of Halkbank having immunity and did not even bring it up officially at the time despite the insistence of his lawyers and family.
Atilla disclosed for the first time important information about his trial in a written statement he sent to the pro-government Sabah daily, which had made accusations against him. Atilla, who was accused of not voicing the claim that Halkbank has immunity during his trial, stated that his family, himself and his lawyers many times requested that the Turkish Embassy in Washington, D.C., communicate to US authorities that he was a state official and thus had immunity. He also added the records of his requests are available.
The Turkish Foreign Ministry passed a diplomatic note to the United States regarding the prosecution of Atilla in 2018 but did not address the issue of immunity. Atilla’s lawyers shared with the media in 2018 that they had conveyed to the Turkish Embassy that Atilla might be immune since he was a state official, and they asked the embassy to pursue it through diplomatic channels, but the embassy did not take the request seriously.
Atilla, who was sentenced to 32 months in prison after standing trial in the US District Court for the Southern District of New York, returned to Turkey on July 23, 2019 from the US, where he had been jailed for 28 months. He was greeted like a hero at the airport in İstanbul by Berat Albayrak, the then-economy minister and son-in-law of Turkish President Recep Erdoğan. Atilla was later appointed to the prestigious position of head of the İstanbul Stock Exchange (Borsa Istanbul). Atilla unexpectedly announced his resignation on March 8, 2021. The Turkish media reported that he was uncomfortable with some of the government’s demands. After Atilla’s resignation, allegations were made against him in the pro-government media, which had treated him like a hero until then. Atilla was accused of making disclosures that harmed Turkey during his trial.
A US court on October 23, 2021 denied an appeal from Turkish state-owned Halkbank, which had asked the court to block the trial and argued it had sovereign immunity under US law. The judges said the charges “fall under the commercial activity exception” to the Foreign Sovereign Immunities Act.
In 2019 US federal prosecutors in the Southern District of New York indicted Turkish state lender Halkbank (Türkiye Halk Bankası A.Ş.) on six counts including fraud, money laundering and sanctions offenses related to the bank’s participation in a multibillion-dollar scheme to evade US sanctions on Iran.
According to the indictment Halkbank is charged with conspiracy to defraud the United States, conspiracy to violate the International Emergency Economic Powers Act (IEEPA), bank fraud, conspiracy to commit bank fraud, money laundering and conspiracy to commit money laundering.
Between 2012 and 2016, prosecutors alleged that Halkbank and its officers, agents and co-conspirators directly and indirectly used money service businesses and front companies in Iran, Turkey, the United Arab Emirates and elsewhere to violate and to evade and avoid prohibitions against Iran’s access to the US financial system, restrictions on the use of proceeds of Iranian oil and gas sales and restrictions on the supply of gold to the government of Iran and to Iranian entities and persons.
Halkbank knowingly facilitated the scheme, participated in the design of fraudulent transactions intended to deceive US regulators and foreign banks and lied to US regulators about Halkbank’s involvement, the indictment states.
The US federal prosecutors previously charged nine individual defendants, including bank employees, the former Turkish economy minister and other participants in the same scheme. On October 26, 2017 Reza Zarrab, the key suspect in the case, pled guilty to the seven counts with which he was charged. He became a government witness who confessed he had bribed Turkish government officials.
On December 17, 2013 Turkish prosecutors made a graft investigation public in which Zarrab and the inner circle of then-prime minister Erdoğan including government ministers were incriminated. Government officials and Halkbank managers were accused of accepting bribes from Zarrab in a sanctions-busting scheme run through Halkbank to circumvent US sanctions on Iran. Erdoğan dismissed the corruption allegations, sacked the prosecutors and police chiefs and hushed up the graft probes. He also described the investigations as “a plot by the Gülen movement to topple the government” and launched a crackdown on the movement.
The 45-page Halkbank indictment: