Federal prosecutors in New York have filed their opposition to a request made by Turkey’s state-owned Halkbank to make a special appearance to address charges of violating U.S. sanctions against Iran.
The federal prosecutors’ move came after lawyers from King & Spalding, representing the bank, asked that their client be allowed to make a special appearance before the court so that it could petition for a dismissal of the case without actually acknowledging the charges or entering a plea.
“We write to submit additional authorities that support our request to enter a special and limited appearance on behalf of Türkiye Halk Bankası A.Ş. for the limited purpose of filing a motion to dismiss for lack of personal jurisdiction and a motion seeking this Court’s recusal from this case,” said a Nov. 19-dated letter submitted by King & Spalding to the U.S. District Judge Richard M. Berman.
Sources familiar with the case previously said that Halbank’s dismissal request of the case might draw additional fines for contempt of court. They also said that if such legal maneuvers were found to be efforts to delay court proceedings, this could trigger heavy sanctions from the U.S. Justice Department.
On Nov. 26, the prosecutors submitted a letter to Judge Berman, saying that Halkbank’s request to make a special appearance should be denied and the court should promptly schedule a hearing at which it can determine whether Halkbank should be held in contempt.
“The premise of Halkbank’s request—that it would waive personal jurisdiction arguments by appearing and being arraigned, and that a special appearance is required to permit it to assert a constitutional right—is wrong and, indeed, illogical,” said the letter signed by the U.S. Attorney for the Southern District of New York, Geoffrey Berman.
“Halkbank’s real concern is … its desire to try to evade the Court’s jurisdiction even if the Court denies its motion to dismiss. But Halkbank simply does not have a choice about whether or not to appear: it has been served with two summonses, and those summonses require Halkbank’s appearance in court to answer the charges. Halkbank can seek recusal or challenge the indictment on any ground permitted by law, but it cannot remain a fugitive. Halkbank’s refusal to comply with the summonses already provides the Court authority over the defendant to ‘take any action authorized by United States law,’” the letter further said, referring to the bank’s refusal to appear in court to answer the charges, which its says are beyond the U.S. Court’s jurisdiction.
Federal prosecutors in Manhattan on Oct. 15 charged Halkbank with taking party in a multibillion-dollar scheme to evade U.S. sanctions on Iran.
The bank said it did not engage in sanctions violations as alleged and falls outside of the U.S. Justice Department’s jurisdiction since it has no branches or employees in the United States. The bank called the charges an escalation of Washington’s sanctions on Ankara over its military incursion in Syria, while Turkish President Tayyip Erdoğan called them an “unlawful, ugly” step.
Two people were previously convicted in the case which first became public in 2016 with the arrest in Miami of Reza Zarrab, a Turkish-Iranian gold trader accused of playing a central role in the sanctions evasion scheme. Atilla, a Halkbank deputy general manager, was arrested in New York the following year.
Zarrab pleaded guilty and testified for U.S. prosecutors at Atilla’s trial. Atilla was sentenced to 32 months in prison following his conviction in early 2018. He was released and returned to Turkey earlier this year.