Turkiye Halk Bankasi A.S. v. United States
The Court ruled that a Turkish government-owned bank accused of helping Iran evade U.S. sanctions can face criminal prosecution in federal court, because the Foreign Sovereign Immunities Act — the law that protects foreign governments from lawsuits — applies only to civil cases, not criminal ones.
The case is sent back to a lower court to resolve a separate question: whether older, judge-made legal rules might still shield the bank from prosecution, leaving the bank's ultimate fate unresolved.
“We now hold that the FSIA does not grant immunity to foreign states or their instrumentalities in criminal proceedings. Through the FSIA, Congress enacted a comprehensive scheme governing claims of immunity in civil actions against foreign states and their instrumentalities. That scheme does not cover criminal cases.”
The Court's core holding that the Foreign Sovereign Immunities Act is a civil-only statute with no application to criminal prosecutions.
How it got here: The federal district court in New York denied Halkbank's motion to dismiss; the Second Circuit affirmed; Halkbank asked the Supreme Court to step in and the Court agreed to hear it.
The Case in Depth
What happened
Halkbank is a large Turkish bank whose shares are majority-owned by the Turkish government. U.S. prosecutors alleged that Halkbank ran a years-long scheme to launder billions of dollars in Iranian oil and gas money through the global financial system — including the U.S. financial system — in violation of American sanctions on Iran, and that it lied to the U.S. Treasury Department to conceal the conspiracy. Two individuals linked to the scheme had already been convicted in U.S. federal court.
The question before the Court
Does the law that shields foreign governments from civil lawsuits in U.S. courts also protect a Turkish state-owned bank from criminal prosecution for allegedly helping Iran evade U.S. sanctions?
The Court's answer
No — the Foreign Sovereign Immunities Act does not protect foreign-government-owned companies from criminal prosecution in U.S. courts. The Court ruled that the FSIA is a civil-lawsuit statute from top to bottom: every provision in it — the jurisdictional grant, venue rules, removal procedures, service rules, default-judgment rules, and liability limits — uses civil-litigation language. Congress described the Act as defining when foreign states are immune from "suit," not from criminal investigation or prosecution, and placed the entire law in the part of federal law governing civil procedure, not in the separate criminal law titles. The Court also rejected Halkbank's argument that one broadly worded provision (§1604) independently bars criminal prosecution, holding that this provision must be read alongside the civil-only jurisdictional grant that immediately precedes it.
The Court did not, however, fully resolve the case. Halkbank separately argued that older, judge-made (common-law) immunity principles — entirely apart from the FSIA — might still block this prosecution. Because the lower court never addressed that argument in depth, the Supreme Court sent the case back for the Second Circuit to work through it.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Foreign-government-owned companies operating in the U.S. financial system can now face federal criminal charges for violating U.S. laws, including economic sanctions. Banks and other state-owned enterprises can no longer invoke the Foreign Sovereign Immunities Act as a blanket shield against prosecution — though a separate common-law immunity defense remains unresolved and could still protect some defendants.
What changes now
The Second Circuit must now decide whether common-law foreign sovereign immunity — a body of judge-made rules that existed before Congress enacted the FSIA — independently protects Halkbank from this criminal prosecution. The Supreme Court expressed no view on how that question should come out. If the Second Circuit finds no common-law immunity, the criminal case against Halkbank can move forward in the Southern District of New York. The case could eventually return to the Supreme Court.
What this does not decide
The Court does not decide whether common-law immunity shields Halkbank or other foreign-government-owned entities from criminal prosecution — that question is sent back to the lower court. The opinion also leaves open whether states could ever face similar prosecutions and whether foreign affairs preemption would block any state-level criminal charges against foreign sovereigns.
Concurrences and dissents
Dissent in part — Justice Gorsuch
Justice Gorsuch agreed that federal courts have jurisdiction over the case under §3231, but argued the majority was wrong to hold that the FSIA does not apply to criminal proceedings. He would apply the FSIA's general immunity rule (§1604) to criminal cases, then find that the commercial-activities exception strips Halkbank of immunity on these facts — reaching the same practical result as the Second Circuit but through the FSIA rather than through judge-made common law. He criticized the majority for sending courts down a murky common-law path filled with unresolved questions about executive deference, customary international law, and federal court authority.
How the Court got there
The legal reasoning, step by step
- The general federal criminal jurisdiction statute, 18 U.S.C. §3231, grants federal courts authority over 'all offenses against the laws of the United States' — sweeping language that covers every defendant. The Court refused to read an unwritten exception into this broad grant simply because some unrelated civil and bankruptcy statutes expressly mention foreign states. Neither historical practice nor prior Supreme Court decisions on the 1789 Judiciary Act supported implying such an exception.
- The Court examined every provision of the FSIA and found that they all speak the language of civil litigation: the jurisdictional grant covers 'nonjury civil actions,' venue rules address 'civil actions,' removal provisions cover 'civil actions' brought in state court, and service and default-judgment rules mirror civil procedure. Congress also described the Act as defining when foreign states are immune from 'suit,' not from criminal investigation or prosecution — a meaningful word choice.
- The FSIA's total silence on criminal proceedings is itself telling. At the time the FSIA was enacted in 1976, federal prosecutors had already attempted to subject foreign-government-owned entities to criminal investigation. If Congress had intended to immunize those entities from prosecution, it would not have buried that sweeping rule in a civil-law statute — Congress does not, as the Court put it, 'hide elephants in mouseholes.'
- The Act's placement within the U.S. Code reinforces the civil-only reading. Congress placed every FSIA provision in Title 28, which governs civil procedure. The Act did not amend Title 18, the separate part of federal law governing crimes and criminal procedure. This structural choice confirmed that the FSIA was designed to operate within the civil sphere.
- Halkbank's strongest textual argument rested on one provision — §1604 — which broadly declares a foreign state 'shall be immune from the jurisdiction of the courts.' But the Court held that §1604 must be read in tandem with §1330(a), which opens courts only to civil cases against foreign states. Section 1604 clarifies how immunity works inside that civil universe; it does not expand the universe to criminal proceedings. Halkbank's reading — that §1330 is civil-only, §1604 covers both civil and criminal, and §1605's exceptions are civil-only again — would produce an incoherent statute that flip-flops in scope across sequential provisions.
- Drawing on its earlier decision in Samantar v. Yousuf (which held the FSIA's civil scheme does not extend to suits against individual foreign officials), the Court concluded by analogy that the FSIA equally does not extend to the discrete context of criminal proceedings. But because the lower court never fully examined whether older common-law immunity principles — entirely separate from the FSIA — might independently bar the prosecution, the Court sent that question back to the Second Circuit to resolve.
Doctrinal impact
Cases affected by this decision
Distinguishes Argentine Republic v. Amerada Hess Shipping Corp. (488 U. S. 428)
Its statement that the FSIA is the 'sole basis' for jurisdiction over foreign states applies only to civil cases, not criminal proceedings.
Reaffirms Samantar v. Yousuf (560 U. S. 305)
Its logic that the FSIA's civil scheme does not extend to discrete contexts equally supports excluding criminal proceedings.