U.S. Drops Halkbank Case as Turkey-U.S. Ties Strengthen

The U.S. Department of Justice has formally requested the dismissal of its criminal case against Turkey's Halkbank, citing the potential to improve relations with Turkey. A settlement allows for monitoring of Halkbank's compliance with sanctions against Iran, without any monetary penalties or admissions of wrongdoing from the bank.

The U.S. Department of Justice has officially moved to dismiss its criminal case against Halkbank, the state-owned Turkish lender, following a settlement agreement reached in March. This decision reflects ongoing diplomatic efforts to mend relations between Turkey and the U.S., two NATO allies.

Halkbank had faced charges for allegedly assisting Iran in evading U.S. economic sanctions, a case initiated during President Trump's first term. Turkish President Recep Tayyip Erdogan had previously decried the case as unjust. However, bilateral relations have warmed significantly since Trump's return to the presidency last year.

As part of the settlement, Halkbank is prohibited from engaging in transactions that would benefit Iran and must comply with sanctions and anti-money-laundering regulations, monitored by Ernst & Young. No financial penalties were imposed, and the bank admitted no wrongdoing. U.S. courts had upheld the case, but a resolution was reached amid geopolitical tensions.