Halkbank sanctions case: US seeks dismissal in 2026

A $20 billion Iran sanctions case against Turkey’s Halkbank (HALKB.IS) edged closer to an end after the Justice Department asked a Manhattan federal judge to drop the US criminal prosecution, moving to close one of Washington’s most closely watched bank-enforcement fights.

Reuters reported the request on Wednesday. It follows a March agreement that paused the case for 90 days while the state-owned lender showed sanctions and anti-money-laundering compliance. Halkbank shares last traded at 45.24 lira in Istanbul, giving the bank a market value of about 325.0 billion lira, according to market data compiled by Yahoo Finance. The stock has gained 22.93 per cent over six months.

For Halkbank, the filing takes away the threat of a criminal trial that had outlasted several diplomatic resets between Washington and Ankara. Inside the Justice Department, the ending is different: a case once framed as a landmark Iran sanctions prosecution becomes a procedural closeout, without a fine or an admission of wrongdoing from the bank.

According to prosecutors, Halkbank helped Iran use oil and gas proceeds to buy gold and move restricted funds through accounts and front companies. The case became a test of whether US sanctions law could reach a foreign state-owned bank. It survived a Supreme Court challenge before the March resolution put dismissal on the calendar.

What changed in court

Most of the legal work was done in March. Prosecutors agreed to resolve the prosecution if Halkbank met compliance requirements, and US District Judge Richard Berman paused the case for 90 days. Reuters reported at the time that the judge had a limited role once prosecutors and the bank agreed on a deferred-prosecution structure.

Separately, Halkbank hired EY to review its sanctions and anti-money-laundering controls, a step disclosed in a later court filing and reported by Reuters. That review matters because the end of the case is not a factual exoneration. Prosecutors are accepting compliance undertakings as the practical settlement, a narrower outcome than the original indictment implied.

Turkish President Recep Tayyip Erdogan had already signaled that Ankara viewed the matter as effectively closed.

“the Halkbank problem is finished for us”
Attribution: Recep Tayyip Erdogan, quoted by Reuters

In Ankara’s telling, the dismissal carries weight beyond one lender. The case was a recurring irritant in US-Turkey relations, and its removal gives Ankara a concrete legal win while sanctions policy remains central to Washington’s pressure on Iran.

Market and enforcement read

Shares had already moved. Halkbank jumped in March after the settlement surfaced, and the six-month advance suggests investors had assigned value to the legal overhang fading. Wednesday’s motion is more likely to confirm that repricing than create a fresh thesis for the stock.

Enforcement lawyers may read the same record two ways. The Justice Department can point to compliance obligations and a court-supervised pause as evidence that the case produced changes. Critics of softer sanctions enforcement may focus on the result: a prosecution over alleged movement of $20 billion ended without a trial, a fine or a guilty plea.

Bloomberg’s report on the dismissal request noted the scale of the reversal: prosecutors were asking to abandon a case that had run for years and drawn repeated objections from Turkey. The factual base of the government allegations remains part of the public record. Halkbank’s legal risk now turns on whether Berman grants the motion.

For foreign banks, the lesson is narrow. State ownership did not keep Halkbank out of US court. Compliance remediation may still help end a case once prosecutors decide the public-interest balance has changed. The gap between those two points is where future sanctions cases involving state-backed lenders will be argued.