TURKIYE HALK BANKASI A. S., also known as HALKBANK v. UNITED STATES is an appeal decided 19 April by the Supreme Court.

The appeal was not on the facts of the case but on whether the bank has sovereign immunity.

The Supreme Court HELD that it does not and remitted the case back to the district court to try the issues.

The case is important as it has implications for all state owned enterprises including sovereign wealth funds.

On appeal from the District Court to the Second Circuit, the bank's contention that it was not liable to prosecution as an "instrumentality of a foreign state and that the charges under section 3232 of the US Code (the codified, collected, federal criminal laws) were valid.

The offences charged in the Manhattan District (Federal) Court as that the bank participated in a scheme to evade sanctions against Iran. Charges were laid on 15th October, 2019.

According to the Department of Justice's announcement, there was a "six-count Indictment with fraud, money laundering, and sanctions offences related to the bank’s participation in a multibillion-dollar scheme to evade U.S. sanctions on Iran.

U.S. Attorney Geoffrey Berman said "Halkbank’s systemic participation in the illicit movement of [thousands of millions] of dollars’ worth of Iranian oil revenue was designed and executed by senior bank officials. The bank’s audacious conduct was supported and protected by high-ranking Turkish government officials, some of whom received millions of dollars in bribes to promote and protect the scheme. Halkbank will now have to answer for its conduct in an American court."

It went on "The purpose and effect of the scheme in which Halkbank participated was to create a pool of Iranian oil funds in Turkey and the United Arab Emirates held in the names of front companies, which concealed the funds’ Iranian nexus. From there, the funds were used to make international payments on behalf of the Government of Iran and Iranian banks, including transfers in U.S. dollars that passed through the U.S. financial system in [breach] of U.S. sanctions laws."

Some of the charges don't make a lot of sense - then again many US charges don't on their face. For example, it's alleged that there was conspiracy to defraud and bank fraud. By way of explanation, these are not "financial frauds" but document frauds.

Conspiracy to breach the International Emergency Economic Powers Act under which sanctions and embargoes are imposed against Iran and money laundering plus conspiracy to commit money laundering are self-explanatory.

The case before the Supreme Court was not about these. It was purely as to whether the bank is immune from prosecution. If that's difficult to grasp, think of it like this: it's kind of diplomatic immunity for foreign state owned entities.

The Court appeared to take that as a starting point, saying "The doctrine of foreign sovereign immunity originally developed in U. S. courts “as a matter of common law” rather than statute" and citing authorities on that point.

Then the Court decided on the face of the statute and a long line of authorities.

It is important to note that the decision related to the statute because it left open the question as to whether there is immunity under Common Law and that will, no doubt, be argued before the District Court.

The basis of the decision is that the Foreign Sovereign Immunities Act "exclusively addresses civil suits." This means that action by e.g. the Securities and Exchange Commission are prima facie prevented by the Act. So would many actions by, for example, FDIC, the Fed and FinCEN.

The Supreme Court extensively reviewed the authorities all of which refer only to civil suits. It even produced authority to say that the protection extends to officers and employees of a relevant company.

But what it would not say is that the protection extends to criminal prosecution.

The Court said "Halkbank claims immunity from criminal prosecution based on one sentence in the FSIA, which provides that a “foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607 of this chapter.”

The Court then made it clear that there were many exceptions to the general rule, even in relation to civil suits, referring to "a universe of civil cases against foreign states over which district courts have jurisdiction"

The bank advanced other arguments which the Court said "lack merit."

After all the arguments about PoTUS Trump's alleged packing of the bench, the balance of opinions demonstrates that the members are far more fluid in their alignments than many would want to say.

KAVANAUGH, J., delivered the opinion of the Court, in which ROBERTS , C. J., and THOMAS , SOTOMAYOR, K AGAN, BARRETT , and JACKSON, JJ., joined. GORSUCH, J., filed an opinion concurring in part and dissenting in part, in which ALITO, J., joined.

Full judgment: https://www.supremecourt.gov/opinions/22pdf/21-1450_5468.pdf
Announcement of charges: https://www.justice.gov/usao-sdny/pr/turkish-bank-charged-manhattan-fed…