Turkish state lender Halkbank has agreed to stop conducting or facilitating transactions that benefit Iran and submit to outside compliance scrutiny under a deal with US prosecutors that paused a long-running criminal case accusing the bank of helping Tehran evade US sanctions, with the charges set to move forward again if the bank violates the agreement.
The agreement, filed in federal court in Manhattan, is a deferred prosecution agreement between Halkbank and the US Attorney’s Office for the Southern District of New York.
Although the deferred prosecution agreement was filed in Manhattan federal court on March 9, the document reached a broader public audience after Turkey’s main opposition Republican People’s Party (CHP) Deputy Chair Deniz Yavuzyılmaz posted excerpts and a 10-point summary on X, which was then picked up by Turkish media.
US District Judge Richard Berman paused the case for 90 days this week to allow the process to move ahead. If Halkbank satisfies the agreement, prosecutors will seek dismissal of the charges after the compliance review is completed.
The case dates back to 2019, when US prosecutors charged Halkbank with fraud, money laundering and conspiracy, accusing the bank of helping move about $20 billion in restricted Iranian funds through the financial system using front companies and false documentation. Halkbank has denied wrongdoing and had fought the case through years of US court proceedings.
Under the agreement, Halkbank must hire an anti-money-laundering and sanctions compliance expert to review its controls and report on whether the bank is complying with the terms. The bank must also cooperate with that review and comply with other conditions, including a provision related to assets linked to gold trader Reza Zarrab.
Mehmet Hakan Atilla, a former executive at Halkbank, was sentenced to 32 months in prison by a US court in May 2018 after he was convicted earlier that year of taking part in a scheme to help Iran evade US sanctions.
The charges against Atilla stemmed from an investigation that first became public with the 2016 arrest in the US of Zarrab. The businessman, who US prosecutors said had close ties to Turkish President Recep Tayyip Erdoğan, struck a plea deal and testified in Atilla’s trial as a witness.
The settlement does not require Halkbank to admit criminal guilt or pay a judicial fine.
Halkbank said the agreement also covers the resolution of related Office of Foreign Assets Control matters tied to the conduct alleged in the indictment.
US prosecutors said the resolution was shaped in part by national security and foreign policy considerations, including Turkish assistance in diplomacy tied to a ceasefire between Israel and Hamas and efforts to secure the release of hostages.
The case had long been a source of tension between Washington and Ankara.
