Bank Deal Sparks Court Debate Over Turkey‑US Ties

A Manhattan judge has demanded an explanation from prosecutors for dropping a long‑running criminal case against Halkbank, the Turkish state‑run bank accused of helping Iran evade U.S. sanctions—a claim that had strained U.S.–Turkey relations.

Case Overview
The lawsuit alleged Halkbank facilitated transactions for Iran, violating U.S. sanctions.
Settlement announced Monday lifted the bank’s share price and could ease tensions between NATO allies after President Trump returned to office last year.
Political Context
The State Department said settling the case was key to Turkey’s role in negotiating an October 2025 ceasefire between Israel and Hamas.
Turkish President Tayyip Erdogan called the case unlawful and “ugly.”

Judge’s Question
Judge Berman asked prosecutor Michael Lockard how national security concerns influenced the deal.
Lockard replied that the court should not weigh those interests.
Deferred Prosecution Agreement
Halkbank must halt any transactions that aid Iran.
The bank will hire an independent monitor to verify compliance with sanctions and anti‑money‑laundering rules.
No money changes hands; charges likely dropped after a compliance review.
Legal Nuances
U.S. judges usually cannot refuse such agreements on their terms but can ensure they align with legal precedent.
Prosecutors and Halkbank request a 90‑day pause to prove compliance before the case resumes.
Impact Statement
Top Manhattan prosecutor Jay Clayton said the deal serves U.S. interests by curbing financial support for Iran’s government.

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