US Moves to Drop Sanctions Case Against Türkiye’s Halkbank

The United States has tentatively agreed to drop a long-running criminal case against Türkiye’s state-owned Halkbank, signaling a possible end to a prosecution that has strained relations between Washington and Ankara for years.

In a filing submitted Monday to the US District Court for the Southern District of New York, prosecutors said resolving the case would serve the “best interests” of the US government. If approved by a judge, the move would close a case that began in 2019 and accused the Turkish lender of helping Iran bypass American sanctions.

The Justice Department said the decision was shaped in part by broader geopolitical considerations.

Prosecutors cited “unique and extraordinary national security and foreign policy considerations” behind the proposed settlement, including Türkiye’s role in helping secure an October ceasefire between Israel and Hamas and assisting efforts to release Israeli captives held in Gaza.

“This unique and substantial public interest in supporting the release of the hostages weighed heavily in the government’s assessment of the appropriate resolution of this case,” the US Department of Justice said in the filing.

Under the terms described by prosecutors, Halkbank would not admit to criminal wrongdoing but would agree to several compliance measures. The bank will work with a mutually agreed third party to review its sanctions and anti-money laundering procedures.

As part of the arrangement, the lender must also refrain from “conducting or facilitating” any transactions involving the Iranian government, Iranian individuals or Iranian entities that include US people or financial institutions during the agreement period.

“This agreement by Halkbank furthers the United States’ compelling interests in combating terrorist financing and financial support for the Government of Iran,” prosecutors said.

Halkbank said the proposed settlement does not include financial penalties and emphasized that the bank has not admitted wrongdoing. In a statement posted on its website, the Istanbul-based lender said the outcome could improve its position in international markets.

“This development is expected to positively impact our bank’s financial structure by expanding its foreign funding opportunities, correspondent network, and access to international markets,” the bank said.

Investors appeared to respond positively. Shares of Halkbank listed in Istanbul rose 10 percent following news of the agreement.

The case has been a persistent point of friction between the United States and Türkiye. President Recep Tayyip Erdogan has repeatedly criticized the prosecution, calling the original indictment filed in 2019 “ugly” and “unlawful”.

US prosecutors had accused the bank of secretly transferring $20bn in Iranian funds in violation of sanctions imposed on Tehran.

Halkbank has consistently denied those accusations. During the legal battle, the bank argued that it should be shielded from prosecution under the doctrine of sovereign immunity. The dispute eventually reached the US Supreme Court, which rejected Halkbank’s appeal in October.