US Department of Justice moves to drop case against Halkbank after deferred prosecution agreement

The US Department of Justice has moved to drop its criminal case against Türkiye Halk Bankası, better known as Halkbank, after reaching a deferred prosecution agreement that lets the Turkish state-owned lender walk away without paying a single dollar in fines. The bank was accused of helping Iran move roughly $20 billion in restricted funds through a web of front companies.

The DPA was filed on March 9, 2026, in the US District Court for the Southern District of New York. Judge Richard M. Berman paused proceedings for 90 days shortly after. If Halkbank plays by the rules during the compliance period, the charges go away entirely.

What the deal actually requires

The bank faces no financial penalties. It does not have to admit wrongdoing. What Halkbank does have to do is appoint an independent compliance monitor. That role went to EY, the global accounting and consulting giant. The monitor will oversee Halkbank’s adherence to anti-money laundering regulations and US sanctions rules. The bank must also submit regular compliance reports and is explicitly prohibited from conducting any Iran-related transactions going forward.

Halkbank shares jumped as much as 10% following the announcement.

How we got here

The bank was formally indicted in October 2019 on multiple charges, including conspiracy to evade US sanctions on Iran and money laundering. Prosecutors said Halkbank helped Iran access billions in oil and gas revenues that were supposed to be locked down under US sanctions. The mechanism involved processing those funds through front companies, effectively laundering restricted money into the global financial system.

Halkbank’s defense leaned heavily on sovereign immunity. The bank argued that as a state-owned institution, it was shielded from US criminal prosecution under the Foreign Sovereign Immunities Act. That argument made it all the way to the US Supreme Court, which ruled in 2023 that the Foreign Sovereign Immunities Act does not apply to criminal cases. That decision stripped away Halkbank’s primary legal shield and put the case back on track for trial.

A former Halkbank executive, Mehmet Hakan Atilla, was convicted in 2018 for his role in the sanctions evasion scheme. Turkish-Iranian gold trader Reza Zarrab, who was also charged, cooperated with US prosecutors and became a key witness.

What this means for investors and the broader market

The 10% share price bump tells you everything you need to know about how the market views this outcome. A criminal trial carried existential risk for the bank. A DPA with no fines is about the best possible scenario short of outright dismissal.

Democratic lawmakers have already raised questions about the timing and implications of the deal, particularly given the current political climate between Washington and Ankara.

The compliance monitoring period will be the next chapter to watch. If Halkbank satisfies EY’s oversight requirements and stays away from Iran-related transactions, the charges get dismissed and the bank moves on. If it stumbles, the DOJ retains the ability to revive the case.

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