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A U.S. appeals court ruled on Friday that state-owned Turkish lender Halkbank (HALKB.IS) can be prosecuted over accusations it helped Iran evade American sanctions, Reuters reported.

The 2nd U.S. Circuit Court of Appeals said even if the Foreign Sovereign Immunities Act shielded the bank, the charge against Halkbank falls under the commercial activity exception.

Prosecutors accused Halkbank of converting oil revenue into gold and then cash to benefit Iranian interests and documenting fake food shipments to justify transfers of oil proceeds.

They also said Halkbank helped Iran secretly transfer $20 billion of restricted funds, with at least $1 billion laundered through the U.S. financial system.

Halkbank has pleaded not guilty to bank fraud, money laundering, and conspiracy charges over its alleged use of money servicers and front companies in Iran, Turkey, and the United Arab Emirates to evade sanctions.

The bank had argued it is immune from prosecution under the federal Foreign Sovereign Immunities Act because it was "synonymous" with Turkey, which has immunity under that law.

Halkbank had been appealing an October 1 ruling by U.S. District Judge Richard Berman allowing it to be prosecuted.

Berman has overseen several related cases, including the conviction of former Halkbank executive Mehmet Hakan Atilla, and a guilty plea by Turkish-Iranian gold trader Reza Zarrab.

Halkbank's case has complicated U.S.-Turkish relations, with Turkish President Recep Tayyip Erdogan backing the bank’s innocence in a 2018 memo to then-U.S. President Donald Trump.

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