Turkiye Halk Bankasi A.S. v. United States

The United States indicted Turkiye Halk Bankasi A.S., a state-owned Turkish bank, for conspiring to evade U.S. sanctions on Iran. The bank allegedly moved billions of dollars for Iran through deceptive transactions involving gold and food. Halkbank argued it was immune from criminal prosecution under the Foreign Sovereign Immunities Act (FSIA), claiming status as a foreign state instrumentality. The district court denied immunity, and the Second Circuit affirmed that the FSIA does not cover criminal proceedings. On appeal, the Supreme Court held that the FSIA grants immunity only in civil cases, not criminal prosecutions. The decision cleared the path for the criminal trial to proceed, marking a significant ruling on the scope of sovereign immunity in U.S. courts.

The Supreme Court affirmed the Second Circuit, holding 7-2 that the FSIA does not provide immunity in criminal cases. The FSIA's comprehensive scheme exclusively addresses civil litigation, leaving criminal prosecutions governed by common-law sovereign immunity principles, which do not bar this proceeding. The case was remanded for the criminal trial to proceed.

Whether the Foreign Sovereign Immunities Act (FSIA) grants a foreign state-owned enterprise immunity from criminal prosecution in U.S. courts, specifically whether the FSIA's exclusive civil immunity framework applies to criminal proceedings.

The ruling clarified limits of foreign sovereign immunity in U.S. criminal law, reinforcing the government's ability to prosecute state-owned enterprises for sanctions violations. It impacted U.S.-Turkey relations, drawing criticism from Turkish officials who viewed it as judicial overreach. The decision set a precedent strengthening enforcement of U.S. sanctions and anti-money laundering laws globally, signaling that commercial state-owned entities are not shielded from criminal accountability.