The long-running legal saga of Turkey’s state-owned Halkbank has entered a critical new phase, with settlement negotiations between Ankara and Washington intensifying after the U.S. Supreme Court on Monday rejected the bank's final appeal to dismiss the case. The decision effectively ends Halkbank’s years-long attempt to claim sovereign immunity and forces it to confront charges of orchestrating a multi-billion-dollar scheme to evade U.S. sanctions on Iran. The focus has now shifted to a high-stakes financial negotiation, with a vast gulf between Turkey’s reported offer of $100 million and expert predictions that a final penalty could reach as high as $2 billion.
The standoff is the culmination of nearly a decade of high-level political maneuvering by Turkish President Recep Tayyip Erdoğan, who has personally lobbied three successive U.S. presidents—Barack Obama, Donald Trump, and Joe Biden—to quash the case. In a detailed analysis, veteran journalist Cansu Çamlıbel recounts how Ankara has consistently sought a political solution, once attempting to trade the release of American pastor Andrew Brunson for the repatriation of convicted Halkbank executive Hakan Atilla. Ankara’s key demand was the termination of two separate U.S. investigations: one by the Treasury Department’s Office of Foreign Assets Control (OFAC) and another, more politically sensitive probe by the Southern District of New York (SDNY).
The case, which first erupted with the 2016 arrest of gold trader Reza Zarrab, has been a persistent and damaging irritant in U.S.-Turkey relations. Zarrab later became a cooperating witness, and his testimony led to the conviction of Halkbank’s deputy general manager, Hakan Atilla. Despite Atilla’s eventual return to Turkey, the SDNY pressed forward with a direct indictment against the bank itself in 2019 for fraud, money laundering, and conspiracy. President Trump, reportedly weary of Erdoğan’s persistent requests, had instructed his top officials to explore a resolution, but a deal never materialized before he left office.
While the financial gap between the two sides is significant, the most crucial issue for Ankara is the political fallout of any settlement. By agreeing to pay a fine, regardless of the amount, the Turkish government would implicitly acknowledge the damning allegations at the heart of the U.S. indictment. These allegations include not only sanctions evasion but also claims that "tens of millions of dollars in bribes were paid to certain [Turkish] officials" to facilitate and protect the scheme. A settlement would mean that a case once dismissed by Ankara as a political plot would end with a tacit admission of wrongdoing.
The Supreme Court's refusal to hear the case has cornered Ankara, leaving a negotiated plea deal as the only viable path to avoid a potentially explosive public trial. As talks continue, the final agreement will not only determine the financial cost to Halkbank but also carry profound political implications, forcing Turkey to quietly accept a narrative it has fiercely and publicly rejected for years.
The Halkbank Case
The Halkbank case alleges that from 2012 to 2016, the Turkish state bank was the central hub for a complex scheme to launder Iranian oil and gas proceeds, violating U.S. sanctions. The case has been politically explosive due to testimony and evidence suggesting the involvement of high-level Turkish government officials. Cansu Çamlıbel is a prominent Turkish journalist and columnist known for her extensive coverage of Turkish foreign policy and U.S.-Turkey relations, who has followed the Halkbank saga from its inception.
Photo: Anadolu Agency