What is in background story US v. Halkbank?

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What is in background story US v. Halkbank?

2020-06-25 10:36 BST
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The criminal case against a Turkish bank brought to spotlights after John Bolton’s allegations, but the indictment itself carries grave legal and political controversies

The probe launched by the New York Southern District Attorney General's Office, which is responsible for the financial offences, against Turkey’s Halkbank is again on the spotlights after the former US National Security Advisor John Bolton’s allegations. John Bolton resigned from the office last year when he became at odds with the US President Donald Trump. After that, Bolton became a vocal critic of Trump and his book about the time he passed in the Oval Office will hit the shelves next week.

In one part, Bolton claims during the G20 meeting in Buenos Aires in 2018, President Trump promised Turkey’s President Erdogan to “take care” of case opened by the New York SDNY office against a Turkish state-bank for evading US sanctions against Iran. Bolton says this seemed as an obstruction of justice to him. But what is the background of the Halkbank Case?

Originally, the probe against Halkbank was started not by the justice seeking US prosecutors in the US soil, but by the members of a secretive cult who infiltrated the Turkish justice system with the political motivations: FETO.

FETO is the organization which is responsible of the coup attempt in Turkey on 15 July 2016 and the death of over 250 people that night. FETO made its intentions to subdue Turkey’s constitutional institutions a few years before the coup attempt. To this end, the organization first tried to overthrow the government with its members in the law enforcement and justice system through a lawsuit. FETO Organization openly started to take position against the Turkish government in 2013. With the power they gained in the judiciary and police, they launched a series of lawsuits unrelated to each other on 17 December 2013. Halkbank was one of the many unfounded probes launched as part of the December 17 investigations. And back in that investigation, evading Iran sanctions was not even at the epicenter of the accusations against the bank. Still, the SDNY Office copied the indictment of FETO members to prove the breach of the US laws.

Additionally, he prosecutors and the police officers carrying the investigations were the well known members of FETO. Huseyin Korkmaz, the police officer who prepared the police report in the December 17 probe first denied he was part of the case, but later fled to the US and has become the main witness of the prosecution. However in the US, he made statements opposite to what he had told in Turkey regarding both his role in the investigations and the bank's commercial activities with Iranian nationals and companies.

Furthermore, the Iran sanctions that the US attornery claimed that Halkbank violated are not the rules Halkbank had to follow Halkbank’s actions did not violate the UN sanctions against Iran. The US prosecutors claimed, but failed to prove so far, that Halkbank violated the US government’s own sanctions against Iran. Yet, a Turkish bank is not bound by abiding US financial regulations. When even a financial probe on that grounds are controversial in terms of jurisdiction, a criminal investigation against foreign nationals and entities on the same ground of not complying with another country’s financial regulations is much more problematic. Halkbank officials and counsellors also challenged the indictment of the New York’s Southern District Attorney General is also challenged by Halkbank since the bank does not operate nor have any offices in the US.

Apart from Halkbank was not indicted for a long time by the US federal prosecutors until October 2019. Coincidentally, the US authorities decided to launch the case after Turkey started its Operation Peace Spring in northern Syria against the YPG/PKK despite the US objections. This raised the questions that whether the charges against Halkbank were being used as a political leverage against Turkey by the US.