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Turkiye Halk Bankasi A.S. v. United States

Facts of the Case

Provided by Oyez

Turkiye Halk Bankasi (“Halkbank”) is a commercial bank that is majority-owned by the Government of Turkey. A 2019 grand jury charged Halkbank with participating in a money-laundering scheme involving billions of dollars’ worth of Iranian oil and natural gas proceeds, in violation of U.S. sanctions against Iran.

 

Halkbank moved to dismiss the indictment, arguing that the Foreign Sovereign Immunities Act (FSIA) immunizes it from criminal prosecution because it is majority-owned by the Government of Turkey. Further, it argued that FSIA’s exceptions to immunity apply only to civil, not criminal, cases, and even if they include criminal cases, it is nevertheless entitled to immunity under common law.

 

The district court rejected Halkbank’s arguments, and the U.S. Court of Appeals for the Second Circuit affirmed, finding that even if FSIA confers immunity from criminal prosecutions, the conduct at issue falls within FSIA’s commercial activity exception.

 

Questions

  1. May the district courts properly exercise subject-matter jurisdiction over the criminal prosecution against Halkbank in this case based on the commercial activity exception to the Foreign Sovereign Immunities Act?

Conclusions

  1. The district court has jurisdiction in this criminal prosecution; the Foreign Sovereign Immunities Act’s comprehensive scheme governing claims of immunity in civil actions against foreign states and their instrumentalities does not cover criminal cases. Justice Brett Kavanaugh authored the 7-2 majority opinion of the Court.

    18 U.S.C. § 3231 contains a broad jurisdictional grant: it gives district courts original jurisdiction over “all offenses against the laws of the United States.” Absent a textual exclusion of foreign states, the most natural reading of that provision is that it includes them.

    The Foreign Sovereign Immunities Act covers only civil cases. It grants district courts original jurisdiction over “any nonjury civil action against a foreign state” as to “any claim for relief in personam with respect to which the foreign state is not entitled to immunity” and describes procedures and remedies applicable exclusively in civil, not criminal, cases. FSIA is silent as to criminal prosecutions. Its one provision that a “foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607 of this chapter” must be read in conjunction with the rest of the Act, which focuses exclusively on civil matters. However, principles of common-law immunity might preclude this criminal prosecution even if the FSIA does not. Thus, the Court affirmed the appellate court’s determination that the district court had jurisdiction, reversed as to its conclusion that FSIA granted immunity from criminal prosecution, and vacated and remanded as to the issue of common-law immunity claims.

    Justice Neil Gorsuch authored an opinion concurring in part and dissenting in part, joined by Justice Samuel Alito. Justice Gorsuch argued that FSIA alone dictates the answer to the immunity questions in this case and thus agrees with the majority as to all but the judgment to vacate and remand the question of common-law immunity.