UPDATE 1-Turkish bank Halkbank can be sued for violating sanctions against Iran, judges US appeals court
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By Jonathan Stempel
October 22 (Reuters) – A U.S. appeals court on Friday rejected Halkbank’s offer to dismiss an indictment accusing the Turkish public lender of helping Iran evade U.S. sanctions.
The 2nd US Court of Appeals said that while the Foreign Sovereign Immunities Act protects the bank, the charge against Halkbank falls under the business activities exception.
Prosecutors accused Halkbank of converting oil revenues into gold and then cash for the benefit of Iranian interests and of documenting bogus food shipments to justify transfers of oil revenues.
They also said Halkbank helped Iran secretly transfer $ 20 billion in restricted funds, including at least $ 1 billion laundered through the U.S. financial system.
Halkbank has pleaded not guilty to bank fraud, money laundering and conspiracy charges for his alleged use of monetary services and shell companies in Iran, Turkey and the United Arab Emirates to evade sanctions.
The bank had argued that it was immune from prosecution under the Federal Foreign Sovereign Immunities Act because it was “synonymous” with Turkey, which enjoys immunity under that law.
Halkbank had appealed an Oct. 1 ruling by US District Judge Richard Berman allowing him to be prosecuted.
Berman oversaw several related cases, including the conviction of former Halkbank executive Mehmet Hakan Atilla and the guilty plea of Turkish-Iranian gold trader Reza Zarrab.
The Halkbank affair complicated US-Turkish relations, with Turkish President Tayyip Erdogan supporting Halkbank’s innocence in a 2018 memo to then-US President Donald Trump. (Reporting by Tom Hals in Wilmington, Delaware; editing by Howard Goller)