US Drops Landmark Halkbank Case, Ending Years-Long Sanctions Dispute with Turkey
A U.S. federal judge has officially dismissed the criminal case against Turkey’s state-owned lender Halkbank, bringing an end to a legal battle that had strained relations between Washington and Ankara for nearly seven years. The decision follows an agreement reached between the U.S. Department of Justice and Halkbank under President Donald Trump’s administration, marking a significant diplomatic breakthrough between the two NATO allies.
U.S. District Judge Richard Berman approved federal prosecutors’ request to dismiss the indictment on Wednesday, finalizing a deal that was first announced in March. The ruling triggered a positive reaction in financial markets, with Halkbank shares rising more than 8% on the Istanbul Stock Exchange as investors welcomed the removal of a major source of uncertainty for the bank.
Halkbank had been charged in 2019 with helping Iran evade U.S. economic sanctions by allegedly facilitating billions of dollars in transactions involving Iranian oil revenues. Prosecutors claimed the bank played a central role in a scheme that enabled Tehran to access restricted funds through gold transfers, cash movements, and fraudulent trade documentation. The bank consistently denied the allegations and pleaded not guilty.
The dismissal represents a major diplomatic victory for Turkey. President Recep Tayyip Erdogan had long criticized the prosecution, describing it as politically motivated and harmful to bilateral relations. Since Donald Trump’s return to the White House, relations between the United States and Turkey have improved considerably, creating momentum for resolving several long-standing disputes.
During the court proceedings, U.S. prosecutors revealed that diplomatic negotiations involving Turkey’s role in regional peace efforts contributed to the settlement. According to government officials, Ankara played an important role in international efforts aimed at securing a ceasefire between Israel and Hamas, helping create conditions for broader cooperation between the two countries.
Under the agreement, Halkbank will not pay any financial penalty and does not admit wrongdoing. However, the bank must continue to comply with strict sanctions and anti-money laundering requirements. The settlement prohibits Halkbank from engaging in transactions that benefit Iran and requires ongoing oversight by an independent monitor.
The monitoring process, conducted by Ernst & Young, found no instances of noncompliance during a 90-day review period. Following the successful review, prosecutors requested that the court permanently dismiss the case.
For Halkbank, the decision removes a significant legal obstacle and is expected to improve its access to international funding and global financial markets. More broadly, the case’s conclusion signals a new chapter in U.S.-Turkey relations, ending one of the most contentious legal and diplomatic disputes between the two allies in recent years.