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1 1 (March 6, 2023)

handle is hein.crs/govektz0001 and id is 1 raw text is: L ~Congressional_______ Research Service Supreme Court Considers Whether the United States Can Prosecute a Foreign-State-Owned Bank March 6, 2023 The Supreme Court may soon decide whether the United States can prosecute foreign countries and their agencies and instrumentalities in U.S. courts. The United States has accused Turkiye Halk Bankasi (Halkbank)-a Turkish state-owned bank whose name translates to the People's Bank of Turkey (Turkiye)-of conspiring to violate U.S. sanctions and commit bank fraud. Halkbank not only denies the charges, it claims the Foreign Sovereign Immunities Act (FSIA) provides complete immunity from criminal prosecution because the bank is an instrument of a foreign state. There is an ample body of Supreme Court cases on how the FSIA applies in civil actions, but the Court has never addressed whether the statute applies in criminal prosecutions. The Supreme Court is set to consider this issue in Turkiye Halk Bankasi A.S. v United States, and its decision could have lasting implications for Congress, U.S. foreign relations, and the tools at the President's disposal to address national security concerns. Background and Charges Although Turkey owns and operates Halkbank, the case before the Supreme Court has its roots in sanctions on Iran. In 2019, a grand jury indicted Halkbank, charging that the bank engaged in schemes to launder billions of dollars from the proceeds of Iranian oil and natural gas sales in violation of the U.S. sanctions. According to the indictment, proceeds from Iran's oil and gas sales were deposited at Halkbank in accounts in the name of several Iranian state-owned entities, some of which are subject to sanctions. The indictment alleges that Halkbank allowed funds in those accounts to be converted into gold and cash that was ultimately transferred to Iran through U.S. dollar-denominated transactions that flowed through U.S. bank accounts. The indictment also alleges that Halkbank tried to exploit exceptions to sanctions for humanitarian assistance by facilitating transactions fraudulently designed to appear as purchases of food and medicine and that bank employees lied to officials from the Department of the Treasury's Office of Foreign Assets Control when questioned about the transactions. High-ranking actors in the Iranian and Turkish governments participated in the scheme and received tens of millions of dollars, according to the indictment. Congressional Research Service https://crsreports.congress.gov LSB10927 CRS Legal Sidebar Prepared for Members and ormmittees of Congress