Case of the Day: US v. Halkbank


The case of the day is United States v. Türkiye Halk Bankasi A.S. (S.D.N.Y. 2020). The government alleged that Halkbank conspired to help Iran evade US sanctions and to use Iranian money held in the bank to engage in transactions in the US banking system. The indictment included charges for conspiracy, bank fraud, and money laundering. Halkbank is an instrumentality of the Turkish state, and it sought dismissal of the indictment on the grounds that under the FSIA the court lacked jurisdiction.

The court held that the FSIA does not have to do with criminal cases, and therefore that it did not “grant immunity” in criminal cases. This seems basically correct, except I am not sure about the language of the FSIA “granting” immunity. Wouldn’t it be better to say that the FSIA codifies the restrictive theory of foreign sovereign immunity, to which the United States subscribes? Foreign sovereign immunity doesn’t come from the FSIA. Anyway, on the facts of the case the court held that the commercial activity exception would apply even if the FSIA were relevant.

The court went on to say that there was no immunity at common law. Before the FSIA, courts generally treated foreign states as immune from suit when the executive asked them to, and here the government obviously did not think the court should accord immunity to Halkbank. Okay. That seems right as far as it goes—it’s true that before the FSIA the courts would generally to defer to the executive in making immunity decisions. But what’s missing is any discussion of whether, under customary international law, Halkbank should be treated as immune, even if, as the court suggests, US courts only recognized immunity (before the enactment of the FSIA) as a matter of comity.


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