Halkbank and the US sanctions case, from indictment to dismissal

On 17 June 2026, a federal judge in Manhattan dismissed the United States criminal case against Halkbank, closing a prosecution that had hung over one of Türkiye's largest state lenders since 2019. TurkishPress has followed Halkbank far longer than that. Our archive traces the bank from the wreckage of the 2001 financial crisis, through its privatization and stock-market debut, into the long fight in the US courts. This is that arc, set against the ruling that ended it.

From the 2001 crisis to the Pamukbank merger

Halkbank's modern shape was forged in the cleanup after 2001. In June 2002 the Banking Regulation and Supervision Agency placed the troubled Pamukbank under the Savings and Deposit Insurance Fund (SDIF), citing a capital deficit of about $2 billion and total commitments that exceeded total assets. SDIF and Halkbank's management agreed in principle to merge the two banks in March 2004, as TurkishPress reported at the time, and Parliament passed the transfer law that July.

The merger was completed on 17 November 2004. Halkbank's general manager Hasan Cebeci said every Pamukbank branch would carry the Halkbank name from that day, and that the combined bank's staff would rise to about 11,100 from 7,400. With the deal, officials said, Halkbank had become the third largest bank in Türkiye by deposits. The lender kept its focus on small and medium-sized businesses, the niche it had served since its founding.

The Özkan and Önal case at home

The Pamukbank affair also produced a political reckoning. In December 2003, Parliament voted to open an investigation into former Deputy Prime Minister Hüsamettin Özkan and former State Minister Recep Önal, on the argument that they had allowed Halkbank to suffer financial losses by failing to act in time. In June 2004 the General Assembly referred both men to the High Tribunal.

The path was not smooth. In July 2004 the Constitutional Court returned the referral to Parliament, finding the single combined vote did not meet judicial procedure, since Özkan and Önal should have been voted on separately. By the end of that year the files were complete and the High Tribunal was set to begin hearing the cases in February 2005, with the two former ministers facing up to three years in prison. The episode is a reminder that scrutiny of Halkbank's books began in Ankara, years before any US courtroom.

Privatization and the 2007 public offering

By 2007 the story had turned from rescue to sale. The Privatization Administration offered close to 25 percent of Halkbank's shares to the public, in what Finance Minister Kemal Unakıtan called the largest public offering carried out on the İstanbul Stock Exchange up to that point, and the biggest bank privatization in Europe since 2004.

Demand was heavy. Unakıtan said foreign investor demand ran at 8.7 times the shares on offer, total demand reached about $12.9 billion, and 230 foreign investors from 20 countries took part. The shares priced at 8 new Turkish lira each, roughly $6 at the time, valuing the whole bank at about $7.38 billion. That same year Fitch affirmed Halkbank's long-term issuer default rating at "BB-", and the bank collected a Bank of New York excellence award for its payment transactions. By 2008 Halkbank reported net profit of ₺1.018 billion (about $580 million) on total assets of ₺51.1 billion, with chief executive Hüseyin Aydın playing down fears about the global downturn.

The US indictment, 2019 to 2021

The calm did not last. In October 2019, a US grand jury indicted Halkbank, alleging it had helped Iran evade American sanctions. Prosecutors accused the bank of moving Iranian oil revenue through front companies and false documentation, claiming it helped transfer some $20 billion, of which about $1 billion was laundered through the US financial system. Halkbank pleaded not guilty to charges of bank fraud, money laundering, and conspiracy.

The early skirmishing was procedural. As TurkishPress reported, US District Judge Richard Berman set a contempt hearing in December 2019 after the bank declined to enter the case formally, having sought a "special and limited appearance" to argue the charges should be dropped. A US appeals court granted a brief stay in early 2020, and the bank was arraigned later that February. Through 2020 and 2021 Halkbank's central argument was sovereign immunity: its lawyer told the Second Circuit that, as a majority state-owned entity, it was shielded by the US Foreign Sovereign Immunities Act of 1976. Prosecutors countered that the law covers only civil cases. The bank, for its part, said it was in full compliance with national and international regulations and called the matter part of a political campaign against Türkiye.

Through the Supreme Court and back, 2023 to 2025

The immunity question went to the top. In April 2023, as TurkishPress noted, the US Supreme Court sent the case back to the lower courts, ruling that the Foreign Sovereign Immunities Act did not bar a criminal prosecution while leaving open whether common-law immunity might apply. Halkbank said it reserved its right to appeal further.

On that remand, a Second Circuit panel ruled in October 2024 that common-law immunity did not protect a state-owned company's commercial activity from prosecution. The Supreme Court declined to take up that decision in October 2025, clearing the way for the case to proceed. A separate civil suit against the bank had already been dismissed in January 2024, and an appeal hearing in the criminal matter was held in New York that February, both covered in the TurkishPress archive.

The final ruling, 17 June 2026

The case did not end in a verdict. It ended in a deal. In March 2026, Halkbank reached a Deferred Prosecution Agreement with the US Attorney's Office for the Southern District of New York. On 17 June 2026, Judge Berman, the same judge who had presided since 2019, granted the Justice Department's motion to dismiss the charges, finding the bank had met the conditions set out in the agreement.

According to Halkbank's own statement, carried by Anadolu Ajansı, the bank admitted no criminal guilt and will pay no judicial or administrative fine, and the Office of Foreign Assets Control closed its administrative process regarding the bank without further action. In court, Manhattan prosecutors described the resolution as connected to broader diplomatic efforts. For two NATO allies whose relations the case had strained for years, the dismissal removed a persistent irritant.

That outcome is striking against everything the archive records before it: a bank rebuilt after a banking crisis, privatized to global investors at a multibillion-dollar valuation, and then accused in the largest sanctions-evasion case of its kind. After nearly seven years in the US courts, and no admission and no penalty, Halkbank walked away.

About the author

Mersina Aydoğan writes on Türkiye's economy, law, and public life for TurkishPress, drawing on the publication's archive of more than two decades of daily reporting. She can be reached through the editors at hello@mersina.com.