Supreme Court Decides Turkiye Halk Bankasi A.S., aka Halkbank v. United States

On April 19, 2023, the U.S. Supreme Court decided Turkiye Halk Bankasi A.S., aka Halkbank v. United States, holding that the district court has jurisdiction under 18 U.S.C. § 3231 over the prosecution of Halkbank and that the Foreign Sovereign Immunities Act (FSIA) does not provide immunity from criminal prosecution. 

Halkbank is a bank owned by the Republic of Turkey. The United States indicted Halkbank for conspiring to evade the U.S. economic sanctions against Iran. Halkbank argued that the indictment should be dismissed because the general federal jurisdiction statute, 18 U.S.C. § 3231, does not extend to prosecutions of instrumentalities of foreign states, such as Halkbank. Alternatively, Halkbank argued that the Foreign Sovereign Immunities Act of 1976 provides instrumentalities of foreign states, such as Halkbank, absolute immunity.

The district court rejected Halkbank’s position, reasoning that the FSIA does not grant immunity to criminal proceedings. Halkbank filed an interlocutory appeal, and the U.S. Court of Appeals for the Second Circuit affirmed. It held that the district court has subject matter jurisdiction over the prosecution. The court also assumed without deciding that the FSIA confers immunity in criminal proceedings to foreign states and their instrumentalities, but held that Halkbank’s charged conduct fell within the FSIA’s exception for commercial activities. 

Section 3231 of Title 18 provides that “[t]he district courts of the United States shall have original jurisdiction, exclusive of the courts of the States, of all offenses against the laws of the United States.” The Supreme Court found that this language plainly encompasses Halkbank’s alleged criminal offenses, which were “against the laws of the United States.” Halkbank claimed that while the statute does not explicitly exclude foreign states and their instrumentalities, it does so implicitly. In support of this argument, Halkbank pointed to civil and bankruptcy statutes that, unlike § 3231, expressly refer to actions against foreign states and their instrumentalities. The Supreme Court found Halkbank’s reference to these scattered and unrelated provisions in the U.S. Code unconvincing and held that the district court has jurisdiction under § 3231 over this criminal prosecution.

In the alternative, Halkbank argued that the FSIA rendered it immune from criminal prosecution. In a matter of first impression, the Supreme Court held that the FSIA does not grant immunity to foreign states and their instrumentalities in criminal proceedings. In making this determination, the Court relied on the text of the FSIA, which exclusively addresses civil suits against foreign states and their instrumentalities. The FSIA is wholly silent as to criminal matters, and parts of the statute underscore the FSIA’s exclusively civil focus. 

Finally, Halkbank maintained that principles of common-law immunity precluded its criminal prosecution, even if the FSIA did not. The government disagreed, arguing that the common law does not provide for foreign sovereign immunity when the Executive Branch has commenced a federal criminal prosecution of a commercial entity, as it did in this case. The Supreme Court concluded that the Court of Appeals did not fully consider the various arguments regarding common-law immunities, nor whether foreign states and their instrumentalities are differently situated for purposes of common-law immunity in the criminal context. The Court therefore remanded to the Court of Appeals on the issue of common-law immunity. 

Justice Kavanaugh delivered the opinion of the Court, in which Chief Justice Roberts and Justices Thomas, Sotomayor, Kagan, Barrett, and Jackson joined. Justice Gorsuch filed an opinion concurring in part and dissenting in part, in which Justice Alito joined.