Turkey is preparing to settle a long-running dispute with the United States over allegations that state lender Halkbank helped Iran evade sanctions, with officials anticipating a fine that Ankara views as manageable, Bloomberg reported, citing a person familiar with the matter.
According to the report President Recep Tayyip Erdoğan discussed the Halkbank case with US President Donald Trump during his visit to the White House on September 25.
Answering reporters’ questions prior to his meeting with Trump, Erdoğan cited the Halkbank case as one of the issues that he would discuss with the US president, raising expectations that the issue will finally be resolved.
A settlement would allow Halkbank to avoid a protracted legal fight that could result in heavier penalties and potentially restrict its access to the US financial system.
The United States indicted Halkbank in 2019 for conspiracy to evade economic sanctions imposed by the United States on Iran by laundering Iranian oil and gas proceeds and making false statements to the US Treasury Department. The bank faces charges of fraud, money laundering and violating sanctions.
Neither Halkbank, the White House nor the US Treasury immediately responded to Bloomberg’s requests for comment, while Turkey’s Treasury and Finance Ministry could not be reached.
The bank has been largely absent from international debt markets since the case surfaced. Its shares have climbed more than 11 percent since the Erdoğan-Trump meeting amid speculation that the dispute is nearing resolution.
Halkbank has argued that it should be immune from prosecution because it is majority-owned by the Turkish state and because the alleged conduct took place outside US jurisdiction. A federal appeals court rejected that defense last year and the bank is now waiting to see if the US Supreme Court will review the ruling.
The lender could also withdraw its Supreme Court appeal if the Justice Department agrees to drop the case, Bloomberg reported.
The controversy has already led to convictions. Mehmet Hakan Atilla, a former Halkbank executive, served about three years in a US prison on sanctions-related charges. Turkish-Iranian gold trader Reza Zarrab, accused of orchestrating the scheme, pleaded guilty and testified against Atilla.