Halkbank Case Dismissed in US, Ending 9-Year Legal Battle

The criminal case against Halkbank, one of Turkey's prominent state-owned banks, in the United States has definitively concluded after nearly nine years, with the US District Court for the Southern District of New York approving the dismissal of the case. The court's decision, which came at the request of the US Department of Justice, removes a significant source of tension that had long impacted relations between Turkey and the United States.

The lawsuit began in 2019 with allegations that Halkbank aided Iran in evading US sanctions. US prosecutors accused the bank of secretly transferring approximately $20 billion in restricted funds, converting Iranian oil revenue into gold and cash, and using fictitious food shipments to disguise illicit money transfers. Halkbank consistently denied these charges, arguing that as a state-owned entity, it was entitled to sovereign immunity from prosecution.

A pivotal moment in the process was the Deferred Prosecution Agreement (DPA) signed between Halkbank and the US Department of Justice in March 2026. Under this agreement, Halkbank neither admitted criminal wrongdoing nor was required to pay any criminal or administrative fines. The terms stipulated that the bank must refrain from transactions benefiting Iran and undergo independent monitoring of its sanctions and anti-money laundering compliance. Following an independent compliance review conducted by Ernst & Young, which identified no areas of non-compliance, prosecutors filed a joint motion to dismiss the case on June 10, 2026. Judge Richard Berman subsequently approved this request on June 17.

In the wake of this decision, Halkbank's shares (HALKB) on Borsa Istanbul experienced sharp increases. The positive momentum, which began with the announcement of the agreement in March, was further solidified by the definitive dismissal of the case. Halkbank General Manager Recep Süleyman Özdil stated that the decision would strengthen the bank's position in international markets and enhance its ability to secure foreign funding.

The Halkbank case had been a persistent point of friction in US-Turkey relations. The legal battle ascended to the US Supreme Court, which ruled in April 2023 that the Foreign Sovereign Immunities Act (FSIA) does not automatically grant immunity to state-owned entities in criminal proceedings. While this ruling allowed the prosecution to proceed, the ultimate resolution came through the parties' agreement.

The dismissal of the case is viewed as a positive signal for the Turkish economy and financial sector. Halkbank's ability to operate in a more predictable international environment is expected to contribute to both the bank's own growth objectives and its capacity to increase financing support for the Turkish real sector. This development holds the potential to open a new chapter in the diplomatic and economic relations between the two countries.