Turkish bank, US Justice Department's deal takes effect

ISTANBUL

An agreement between Turkish state lender Halkbank and the US Justice Department to defer prosecution took effect Wednesday.

"The Deferred Prosecution Agreement signed between the U.S. Department of Justice U.S. Attorney's Office for the Southern District of New York and our Bank in order to conclude the criminal charges brought against our Bank in the U.S. by means of settlement was discussed by the U.S. District Court for the Southern District of New York today and has gone into effect," the bank said through Türkiye's Public Disclosure Platform (KAP).

"The agreement is binding on both the U.S. Department of Justice and the Bank," it said.

US District Judge Richard Berman asked a Justice Department lawyer to explain the agreement and raised concerns that Halkbank would pay nothing under the deal, Bloomberg reported.

Assistant US Attorney Michael Lockard responded that the court had no authority to review the terms, arguing the deal reflects "significant national security and foreign policy interests" within the authority of US President Donald Trump and the executive branch.

The bank and the American agency agreed previously, according to court records unsealed Monday.

US Attorney for the Southern District of New York Jay Clayton wrote to US District Court Judge Richard Berman that the Justice Department "believes the resolution of these charges against Halkbank on the terms and conditions set forth in the Agreement is in the best interests of the United States."

"This agreement by Halkbank furthers the United States' compelling interests in combatting terrorist financing and financial support for the government of Iran," wrote Clayton.

In another statement Monday, Halkbank said under the settlement with the US Attorney’s Office for the Southern District of New York, Halkbank will not admit criminal wrongdoing and will not pay judicial or administrative fines.

The US Supreme Court rejected an appeal by Halkbank in October to review a lower court's ruling that the public lender was not immune to prosecution under common law.