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22 January 2020

US hits Turkey’s Halkbank with millions in contempt fines

The US pursuit of Halkbank, which is owned by the Turkish government, has been a sore point in relations between the two countries

While Halkbank does almost no business in the US, it has some ties to the nation’s financial system/Bloomberg

by Bloomberg

The federal prosecutors in New York said that Turkey’s Halkbank should pay millions of dollars in fines for its continued failure to respond to US sanctions-evasions charges.

In a court filing, the US government asked a federal judge to impose a daily $1 million fine that would double each week the bank refuses to appear in the case.

Prosecutors charged the bank in October 2019 with aiding a yearslong scheme to help Iran evade US economic sanctions and access $20 billion in frozen oil revenue. Since then, Halkbank has refused to accept service of the indictment or answer the case, leading prosecutors to deem it a fugitive from justice.

Manhattan federal prosecutors previously won the conviction of a senior Halkbank executive in a case Turkish President Recep Erdogan likened to an international coup attempt.

The US said that Halkbank has consistently sought to avoid responsibility for its role in a massive sanctions-evasion and money-laundering scheme that gave Iran access to billions of dollars’ worth of restricted oil proceeds.

The US argued that Halkbank improperly ignored an initial summons, intentionally frustrated efforts to serve the summons and indictment, attacked the charges in the press and failed to show up for a required court appearance.

A judge in December 2019 denied Halkbank’s request that it be allowed to make a special appearance to argue for the charges’ dismissal without submitting itself to the court’s jurisdiction.

US District Judge Richard Berman denied the request, leaving Halkbank with a choice between answering the charges and defending against them or not participating in the case in any way.

While Halkbank does almost no business in the US, it has some ties to the nation’s financial system, which the government could limit or sever.

In its initial filing, the US provided conflicting statements about the amount of the proposed fine. In one section the daily $1 million fine was said to double at the end of each week the bank fails to comply.

In another section the government said the fine would double every day, however, in a corrected filing, prosecutors made clear the fine should double only each week.

RELATED STORIES: sanctions-evasion money-laundering Halkbank Judge Richard Berman US government Iran President Recep Erdogan





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