Turkiye Halk Bankasi A.S. v. United States
598 U.S. 264 (2023)
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Rule of Law:
The Foreign Sovereign Immunities Act of 1976 (FSIA) applies exclusively to civil actions and does not provide foreign states or their instrumentalities with immunity from criminal prosecution in United States courts.
Facts:
- Turkiye Halk Bankasi A.S. (Halkbank) is a commercial bank majority-owned by the Republic of Turkey.
- The United States government alleged that Halkbank participated in a multi-year conspiracy to evade U.S. economic sanctions against Iran.
- The alleged scheme involved laundering billions of dollars of Iranian oil and gas proceeds through the global financial system.
- As part of the conspiracy, the laundered funds allegedly passed through the U.S. financial system.
- Halkbank was also accused of making false statements to U.S. Treasury Department officials in an effort to conceal the scheme.
- The alleged conspiracy was reportedly carried out with the assistance of high-ranking Turkish government officials.
Procedural Posture:
- The United States indicted Halkbank in the U.S. District Court for the Southern District of New York.
- Halkbank filed a motion to dismiss the indictment, asserting immunity from criminal prosecution under the Foreign Sovereign Immunities Act (FSIA).
- The District Court, a trial court, denied Halkbank's motion to dismiss.
- Halkbank, as appellant, filed an interlocutory appeal to the U.S. Court of Appeals for the Second Circuit.
- The Second Circuit, an intermediate appellate court, affirmed the District Court's denial of the motion to dismiss, holding that Halkbank's conduct fell within the FSIA's commercial activity exception.
- The U.S. Supreme Court granted certiorari to review the Second Circuit's decision.
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Issue:
Does the Foreign Sovereign Immunities Act of 1976 grant immunity to an instrumentality of a foreign state from criminal prosecution in United States courts?
Opinions:
Majority - Justice Kavanaugh
No. The Foreign Sovereign Immunities Act of 1976 does not grant immunity to foreign states or their instrumentalities in criminal proceedings. First, the District Court has jurisdiction over this prosecution under 18 U.S.C. § 3231, which grants jurisdiction over 'all offenses against the laws of the United States' and contains no implicit exclusion for foreign state instrumentalities. Second, the FSIA's text, structure, and history demonstrate that it exclusively addresses civil actions. The statute is replete with terms applicable only to civil litigation, such as 'nonjury civil action,' 'summons and complaint,' and 'punitive damages,' while remaining entirely silent on criminal matters. The FSIA's placement in Title 28 of the U.S. Code (governing civil procedure) rather than Title 18 (governing criminal law) further supports this conclusion. While Halkbank relies on the immunity grant in § 1604, that provision must be read in tandem with the jurisdictional grant in § 1330(a), which explicitly applies only to civil actions. The case is remanded for the Court of Appeals to consider whether Halkbank is entitled to immunity under principles of common law, an issue not addressed by the FSIA.
Concurring in part and dissenting in part - Justice Gorsuch
No. While I agree the prosecution may proceed, the Foreign Sovereign Immunities Act does apply to criminal cases, but its commercial activity exception denies Halkbank immunity in this instance. The majority errs by concluding the FSIA is entirely inapplicable to criminal proceedings. The plain text of § 1604 broadly states a 'foreign state shall be immune,' without any limitation to civil cases. The fact that other FSIA provisions, like § 1330, specifically mention 'civil action' indicates that Congress's omission of such language in § 1604 was intentional. The proper analysis is to apply the FSIA's framework, which leads to the conclusion that Halkbank's alleged conduct falls squarely within the commercial activity exception of § 1605(a)(2), thereby stripping it of immunity. The majority's decision to sidestep the FSIA in favor of a remand on ill-defined common law principles unnecessarily complicates the law and creates uncertainty for lower courts.
Analysis:
This decision clarifies a significant ambiguity by definitively holding that the FSIA's comprehensive framework for sovereign immunity is limited to the civil context. It establishes that foreign state-owned commercial entities are not shielded by the FSIA from criminal prosecution for violations of U.S. law. However, by remanding the case for consideration of common-law immunity, the Court leaves a critical question unresolved: what non-statutory immunity, if any, do these entities possess in criminal proceedings? This open question creates a new area of legal uncertainty, potentially shifting the focus of immunity claims in criminal cases from statutory interpretation to the more amorphous realm of common law and executive deference.
