by Carmine Boccuzzi, Jr., Jonathan Kolodner, Rahul Mukhi, Boaz Morag, Rathna Ramamurthi, Hyatt Mustefa, and Matthew Slater
The U.S. Court of Appeals for the Second Circuit recently held in U.S. v. Halkbank[1] that a Turkish state-owned bank did not have sovereign immunity from criminal charges that it engaged in a conspiracy to launder $20 billion of Iranian oil and gas proceeds in violation of U.S. sanctions.
While the district court had joined other Circuit courts in ruling that the Foreign Sovereign Immunities Act (“FSIA”) does not confer on foreign sovereigns immunity from criminal prosecutions, the Second Circuit declined to decide that unsettled issue, except insofar as it held that the FSIA is not the only source of criminal jurisdiction over a foreign sovereign. Instead, the Second Circuit assumed arguendo that the FSIA confers immunity in the criminal context and held that the conduct at issue would fall under the FSIA’s commercial activity exception to immunity.