Turkiye Halk Bankasi A.S. v. United States

In April 2023, the U.S. Supreme Court decided Turkiye Halk Bankasi A.S. v. United States. The case arose from federal criminal charges alleging that Halkbank, a Turkish state-owned bank, participated in a multibillion-dollar scheme to evade U.S. sanctions on Iran. Halkbank moved to dismiss, claiming immunity under the Foreign Sovereign Immunities Act. The district court denied the motion, and the Second Circuit affirmed, holding that the FSIA does not apply to criminal proceedings and that common-law sovereign immunity did not bar prosecution. The Supreme Court vacated and remanded, holding that the FSIA text does not grant immunity in criminal cases, but the Second Circuit erred by failing to fully consider whether common-law foreign sovereign immunity might provide a defense.

The Supreme Court vacated the Second Circuit's judgment and remanded, holding that the FSIA does not apply to criminal cases but directing lower courts to consider common-law sovereign immunity defenses.

Whether the Foreign Sovereign Immunities Act provides foreign state-owned entities immunity from criminal prosecution in U.S. courts, and whether common-law sovereign immunity may bar such prosecution.

The decision clarified limits of the FSIA in criminal enforcement and allowed prosecution to proceed while leaving open common-law immunity arguments, with significant implications for foreign state-owned enterprises and U.S. sanctions enforcement.