U.S. appeals court puts prosecution of Halkbank on hold

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U.S. appeals court puts prosecution of Halkbank on hold

A customer uses an automated teller machine at a branch of Halkbank in Istanbul on August 15, 2014. NEW YORK, Jan 14, Reuters - A U.S. appeals court put the federal government's prosecution of Turkish state-owned lender Halkbank HALKB.IS for allegedly helping Iran evade American sanctions while the bank appeals to the U.S. Supreme Court.

The Circuit Court of Appeals in Manhattan allows Halkbank to appeal without having to defend against the criminal case at the same time. It did not have a view on the merits of an appeal.

The U.S. Department of Justice had opposed a delay, saying Halkbank's meritless claims neither raised substantial questions nor overcame public interest in a speedy trial.

Halkbank has pleaded not guilty to bank fraud, money laundering and conspiracy over its alleged use of money servicers and front companies in Iran, Turkey and the United Arab Emirates to evade sanctions.

Its alleged misconduct includes helping Iran secretly transfer $20 billion of restricted funds, including $1 billion laundered through the US financial system, and converting oil revenue into gold and then cash to benefit Iranian interests.

The U.S. Attorney's Office in Manhattan and the US-based lawyers for Halkbank did not respond to requests for comment.

In an Oct. 22 decision, the 2nd Circuit said Halkbank could be prosecuted because of its alleged misconduct in commercial activity that was not covered by sovereign immunity.

Halkbank said that decision was in line with Supreme Court precedents, as it greenlights the first criminal trial of a foreign sovereign in the nation's history. It said it would suffer irreparable harm if forced to defend against a case from which it is immune. The Supreme Court denies most of the appeals. In its last term, it received 5,307 filings and heard arguments in 72 cases.