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26 January 2020
REGULATION

Halkbank’s fine for contempt of US court could soon reach $1 billion

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

Turkey’s Halkbank could be liable to pay $1 billion of dollars in fines as early as March 2020 if the lender continues to refuse to appear in a court case in New York.

A few more weeks of non-compliance by the state-owned lender, and it would be on the hook for the equivalent of the central bank’s net reserves. By mid-May 2020 Halkbank would be an entire year’s worth of Turkey’s economic output.

Last week, 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.

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.

 


RELATED STORIES: Halkbank US sanctions

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