U.S. seeks big contempt fines against Turkey's Halkbank

This post was originally published on this site
https://i-invdn-com.akamaized.net/news/LYNXNPEB6U08A_M.jpg
© Reuters. FILE PHOTO: A view shows the logo of Halkbank at its headquarters in Atasehir, in the Asian part of Istanbul© Reuters. FILE PHOTO: A view shows the logo of Halkbank at its headquarters in Atasehir, in the Asian part of Istanbul

By Jonathan Stempel

NEW YORK (Reuters) – The U.S. government said on Tuesday that Turkey’s state-owned Halkbank (IS:) should be subjected to escalating fines totaling millions of dollars until it responds in court to criminal charges it helped Iran evade U.S. economic sanctions.

In a filing in Manhattan federal court, prosecutors said Halkbank should be fined an initial $1 million a day for contempt of court, and which could double each week to counter the bank’s “obstinacy” in refusing to defend itself in court.

Such a penalty “is an appropriate and necessary sanction to apply a sufficient coercive pressure to cause the defendant to cease its contempt and appear in this matter,” prosecutors said.

A U.S.-based lawyer for Halkbank did not immediately respond to requests for comment.

The proposed fine could total $7 million after the first week of non-compliance and $21 million after two weeks, and nearly $1.8 billion by the end of eight weeks.

U.S. prosecutors announced fraud and money laundering charges in the case on Oct. 15, saying Halkbank and its executives used money servicers and front companies in Iran, Turkey and the United Arab Emirates to evade sanctions.

Prosecutors also said Halkbank undertook transactions on Iran’s behalf that would have exposed the bank to sanctions, including allowing revenue from oil and gas sales to be spent on gold, and facilitating sham purchases of food and medicine.

Last month, U.S. District Judge Richard Berman, who oversees the case, rejected Halkbank’s request to put the case on hold.

He said the public had a strong interest in a “prompt adjudication” of Halkbank’s alleged role in a conspiracy to undermine the sanctions, including through the alleged transfer of $20 billion of otherwise restricted Iranian funds.

A hearing is scheduled for Feb. 25. Halkbank has asked a federal appeals court in Manhattan to stay the case.

The dispute has caused tension in U.S.-Turkish relations, and nine people have been criminally charged.

They included former Halkbank executive Mehmet Hakan Atilla, who was convicted in January 2018 after another defendant, wealthy Turkish-Iranian gold trader Reza Zarrab, pleaded guilty and testified against him.

Atilla returned to Turkey last year after leaving prison, and became general manager of the Istanbul Stock Exchange.

The case is U.S. v. Halkbank, U.S. District Court, Southern (NYSE:) District of New York, No. 15-cr-00867.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Add Comment