Jonathan Stempel

NEW YORK (Reuters] – The U.S. appeals court halted the prosecution by the federal government of Halkbank, a Turkish state-owned bank accused of helping Iran evade American sanction. While the bank appeals the decision to the U.S. Supreme Court.

Friday’s 2nd U.S. Circuit Court of Appeals Manhattan gives Halkbank the right to appeal and not have to fight the criminal case. The court did not express any opinion on merits of the appeal.

According to the U.S. Department of Justice, a delay was not allowed because Halkbank’s “meritless claims” did not raise “substantial” issues nor overcome the public interest in a fast trial.

Halkbank pleaded guilty to bank fraud and money laundering. It was accused of using money servicers in Iran, Turkey, and the United Arab Emirates as a means to avoid sanctions.

The alleged misconduct involves Iran’s secret transfer of $20 billion in restricted funds to Iran, $1 billion which was laundered through U.S. financial systems, as well as converting oil revenues into gold, then cash, for Iranian interest.

Requests for comment were not received by the U.S. Attorney’s Office for Manhattan or U.S.-based Halkbank lawyers immediately.

The 2nd Circuit ruled that Halkbank can be prosecuted in a decision dated Oct. 22, because the alleged misconduct was commercial and not subject to sovereign immunity.

Halkbank stated that the decision was inconsistent with Supreme Court precedents because it “opens the door to the first criminal prosecution of a foreign sovereign in our nation’s historical history.”

The company also stated that it could suffer irreparable damage if it was forced to defend “a case against which it is immune.”

Most appeals are denied by the Supreme Court. It heard arguments in 72 of the cases and received 5303 filings during its final term.