Halkbank Case Dropped, Ties Between Turkey and the U. S. Warm Up

The U. S. Justice Department has formally asked a federal judge to end the criminal case against Halkbank, the state‑run Turkish lender. This move follows a March agreement between the bank and U. S. authorities that aimed to clear a long‑standing legal hurdle in relations between the two NATO allies. Halkbank had been accused, during President Trump’s first term, of helping Iran bypass U. S. sanctions. The case drew criticism from Turkish President Recep Tayyip Erdogan, who called it “unlawful” and “ugly. ” Yet the dispute was settled before the U. S. and Turkey could deepen their partnership after Trump’s return to office last year. The deal does not involve any payment from either side. Halkbank also did not admit wrongdoing; it had pleaded not guilty throughout the proceedings. Instead, the settlement requires the bank to avoid transactions that benefit Iran and mandates a monitor to oversee its compliance with sanctions and anti‑money‑laundering rules.During the 90‑day pause granted by Judge Richard Berman, Halkbank hired Ernst & Young to audit its compliance programs. The audit found no violations, and prosecutors asked the judge to dismiss the case. This follows a Supreme Court decision that allowed the prosecution to proceed, despite Halkbank’s argument that it should be immune as a state‑owned entity. The settlement came amid heightened tensions after the U. S. and Israel began military actions against Iran in February. Earlier accusations claimed Halkbank had moved $20 billion of restricted funds, turned oil revenue into gold and cash for Iran, and falsified food shipments to hide these transfers. Erdogan has expressed hope that the issue is resolved, noting in October that Trump had told him the problem was finished. With the case dismissed, Turkey and the U. S. can focus on broader cooperation while maintaining a stricter stance against Iran.