Halkbank agrees to respond to US criminal charges

After more than three months of resistance, Turkey’s state-owned Halkbank has agreed to appear in the New York court to face criminal charges that it helped Iran evade U.S. sanctions. The bank is expected to enter its plea on March 3.


Turkey's state-owned Halkbank has agreed to enter a formal plea of not guilty to criminal charges that it helped Iran evade U.S. sanctions, backing down from its previous refusal to answer the allegations, a lawyer for the bank said on Feb. 25.

The bank has maintained that thefederal court in Manhattan where it is charged has no jurisdictionover it. The case, which has caused tension between the United Statesand Turkey, accuses Halkbank of using money servicers and frontcompanies in Iran, Turkey and the United Arab Emirates to evadesanctions through sham transactions in gold, food and medicine.

Andrew Hruska, the bank's U.S. lawyer,said at a court hearing that the bank had been reassured it would notgive up its right to challenge the court's jurisdiction by respondingto the charges. He said he had been given permission by the bank'sgeneral manager to enter a plea on its behalf.

"Now that those issues have beenresolved, we're ready to proceed," he said.

U.S. District Judge Richard Berman ordered Hruska to obtain written authorization from Halkbank before entering the plea. Berman called the bank’s reversal a “welcome change of direction but a change nonetheless.”

Another hearing is scheduled on March 3.

US seeks big contempt fines against Turkey's HalkbankUS seeks big contempt fines against Turkey's Halkbank

The bank's change of course came afterU.S. prosecutors asked the judge to hold it in contempt for failingto respond and impose heavy fines, beginning at $1 million per dayand doubling each week.

The charges against Halkbank, announcedlast October, followed related charges brought by U.S. prosecutorsagainst nine individuals since 2016.

They included former Halkbank executiveMehmet Hakan Atilla, who was convicted in January 2018 after anotherdefendant, wealthy Turkish-Iranian gold trader Reza Zarrab, pleadedguilty and testified against him.

Atilla returned to Turkey last yearafter leaving prison, and became general manager of the IstanbulStock Exchange.

The case is U.S. v. Halkbank, U.S.District Court, Southern District of New York, No. 15-cr-00867.