A US district judge on Wednesday ordered Turkey‘s majority state-owned Halkbank to appear in court on November 5 and warned that he may sanction the bank if it fails to show up.
Federal prosecutors in Manhattan on October 16 charged the state-owned lender with taking part in a multibillion-dollar scheme to evade US sanctions on Iran.
Halkbank declined to comment on the order. It previously said it did not engage in sanctions violations as alleged and falls outside of the US Justice Department’s jurisdiction since it has no branches or employees in the United States.
Prosecutors had served a summons requiring the bank’s US lawyer to appear in court on October 22. A US prosecutor on Tuesday called the bank a “fugitive” after it failed to show up.
Andrew Hruska, Halkbank’s US lawyer, said in a court filing Monday that he was not authorised to accept a summons or appear in court on behalf of the bank.
“Should Halkbank fail for a second time to appear pursuant to the Second Summons, the Court will consider any appropriate sanctions for knowing and willful noncompliance,” US District Judge Richard Berman said in a court filing.
Such sanctions would be a penalty only for failing to appear in court and would not reflect a finding that the bank was guilty of the charges against it.
The case comes as the US and Turkey are at odds over Turkey’s military offensive into northeastern Syria against Kurdish-led militia. US President Donald Trump announced a set of sanctions on October 14 to punish Ankara for the operation, although froze them since last week after a ceasefire agreement.
The bank has said the charges amount to an escalation of Washington’s sanctions on Ankara, and President Recep Tayyip Erdogan called them an “unlawful, ugly” step.
The indictment against Halkbank alleges Turkey’s second-largest state bank engaged in fraud and money laundering, among other sanctions-related offences.
The charges were the latest development in a case that became public in 2016 with the arrest in Miami of Reza Zarrab. Zarrab, a Turkish Iranian gold trader, is accused of playing a central role in a scheme to help Iran evade US sanctions using sham transactions in gold, food, and medicine.
Mehmet Hakan Atilla, a Halkbank deputy general manager, was arrested in New York the following year. Zarrab pleaded guilty and testified for US prosecutors at Atilla’s trial, accusing officials, including Erdogan, of taking part in the sanctions evasion scheme.