A federal judge is set to consider on Wednesday whether to approve an agreement reached by the US administration and Halkbank to resolve the Justice Department’s criminal prosecution of the Turkish state-run lender for allegedly helping Iran evade US economic sanctions.

Background of the Case

The agreement promises to relieve an irritant that has bothered relations between NATO allies Turkey and the United States since the US first brought the charges in 2019. The announcement of the settlement in March sent Halkbank’s shares soaring on the Istanbul stock exchange.

Manhattan-based US District Judge Richard Berman then paused the case for 90 days to allow Halkbank to demonstrate compliance with the deal’s terms, which included barring it from entering transactions that benefit Iran and requiring a monitor to review the bank’s sanctions and anti-money laundering compliance.

When that period lapsed on June 10, prosecutors with the Manhattan US Attorney’s office asked Berman to formally dismiss the case, writing that the monitor, Ernst & Young, had not found any instances of noncompliance by Halkbank.

Implications of the Deal

US judges have little discretion to reject the terms of deferred prosecution agreements such as the one reached between the Justice Department and Halkbank. No money changes hands in the agreement, and the bank did not admit criminal wrongdoing.

US prosecutors had accused Halkbank of secretly transferring $20 billion of restricted funds, converting oil revenue into gold and cash to benefit Iranian interests and documenting fake food shipments to justify transfers of oil proceeds.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.