Judge to weigh Halkbank, US prosecutors' resolution to criminal case

Turkiye Halk Bankasi

11/03/2026 10:00

Halkbank's share price surged after deal announcement

Deferred prosecution agreement includes compliance monitor for Halkbank

Erdogan previously criticized the case as unlawful and 'ugly'

By Luc Cohen

NEW YORK, March 11 (Reuters) - A U.S. judge is expected on Wednesday to consider approving the U.S. government's agreement to end its long-running criminal prosecution of Turkish state-run lender Halkbank HALKB.IS, which centered on allegations that the bank helped Iran evade American economic sanctions.

The deal, announced on Monday, sent Halkbank's share price soaring. If approved by Manhattan-based U.S. District Judge Richard Berman, it would relieve an irritant between the United States and Turkey, as the NATO allies experience their best ties in decades following Donald Trump's return to the U.S. presidency last year.

Berman is due to hold a hearing over the agreement at 9 a.m. EDT (1300 GMT).

Under the deal, known as a deferred prosecution agreement, Halkbank would be barred from entering transactions that benefit Iran and would be required to hire a monitor to review its sanctions and anti-money-laundering compliance.

No money would change hands, and the charges would likely be dismissed after the monitor reviews Halkbank's compliance, according to the agreement. The bank, which had previously pleaded not guilty to the charges, did not admit any criminal wrongdoing as part of the agreement.

U.S. judges generally lack the discretion to reject deferred prosecution agreements based on their terms, but may review the deals to ensure they are supported by judicial precedent, according to legal experts.

For now, prosecutors and Halkbank are asking Berman to pause the case for 90 days to give Halkbank the chance to demonstrate its compliance with the terms of the deal.

Jay Clayton, the top federal prosecutor in Manhattan, said in a letter to Berman the agreement would serve U.S. interests by combating financial support for Iran's government.

Turkish President Tayyip Erdogan once called the case unlawful and "ugly."

The State Department had told the Manhattan U.S. Attorney's office several months ago that resolving the Halkbank case was an important part of diplomatic negotiations over Turkey's assistance in securing the October 2025 ceasefire between Israel and Hamas, prosecutors said in court papers.

 (Reporting by Luc Cohen in New York;
Editing by Noeleen Walder and Alistair Bell)

 ((luc.cohen@thomsonreuters.com; +1 646 540 2347))