Turkey has frozen the assets of people and entities tied to Iran’s nuclear and missile programs and is preparing to settle a U.S. criminal case against state lender Halkbank, steps that tighten Ankara’s formal alignment with the reimposed UN sanctions while potentially defusing a years-long legal cloud over one of its biggest banks.
A presidential decree published Oct. 1 updates Turkey’s sanctions annex and orders an asset freeze on 20 individuals and 18 organizations linked to Iran’s programs. The list, which Turkish outlets say comes under Presidential Decree No. 10438, includes the Atomic Energy Organization of Iran (AEOI), Bank Sepah and Bank Sepah International, the Isfahan Nuclear Fuel Research and Production Center, and the Karaj Nuclear Research Center. The decision takes immediate effect and is implemented by the Treasury and Interior Ministry.
The move follows the UN “snapback” of Iran sanctions that went into effect late last week and which European allies backed over objections from Russia and China.
On the same day as Ankara’s decree, the U.S. Treasury’s OFAC designated 21 entities and 17 individuals supporting Iran’s ballistic-missile and military-aircraft procurement networks, with nodes in Iran, China, Hong Kong, and Germany. The State Department announced additional sanctions tied to the UN snapback.
Against this backdrop, Bloomberg reported that Turkey is preparing to settle the Halkbank case and expects a “manageable” fine, after President Recep Tayyip Erdoğan discussed the matter with President Donald Trump during a Sept. 25 White House visit. Halkbank shares have risen on speculation that a deal is nearing, the outlet said. (Officials on both sides declined immediate comment.)
The Erdoğan–Trump meeting—the first at the White House in six years—was widely covered by U.S. and international media and featured optimistic readouts from Ankara about “meaningful progress.”
Where the court fight stands
U.S. prosecutors indicted Halkbank in 2019 for allegedly helping Iran evade U.S. sanctions by laundering oil and gas proceeds and lying to Treasury—charges the bank denies. Prosecutors have alleged the broader scheme sought to free up roughly $20 billion in restricted Iranian funds and laundered at least $1 billion through the U.S. system. Related prosecutions produced a 2018 conviction of former Halkbank executive Mehmet Hakan Atilla (32-month sentence) and a 2017 guilty plea from trader Reza Zarrab, who testified at Atilla’s trial.
Halkbank is currently asking the U.S. Supreme Court to review a Second Circuit ruling that the bank is not protected by common-law sovereign immunity in a criminal case. The petition, No. 24-1144, was docketed May 7, 2025 and, as of Oct. 2, the Court has not publicly decided whether to hear it.
The Oct. 22, 2024 Second Circuit decision—following a 2023 Supreme Court remand on FSIA issues—held that state-owned corporations engaged in commercial conduct are not absolutely immune from U.S. criminal prosecution and that courts may defer to the Executive’s determination to proceed.
What a deal could look like. People familiar told Bloomberg one scenario would see the Justice Department drop the case in exchange for a fine, with the bank withdrawing its Supreme Court appeal—a path that would avoid a protracted trial and reduce the risk of knock-on restrictions in the U.S. financial system. Treat this as negotiations, not policy, until there’s a filing.
A negotiated outcome would likely remove a long-standing overhang on Turkey’s state-bank complex, ease funding optics for Halkbank—largely absent from international debt markets since the indictment—and reduce tail risks associated with U.S. enforcement escalation. However, a large fine could pressure capital ratios and require state backstops—risks Ankara has mitigated before with capital injections into state lenders. (Halkbank has not disclosed provisions for a potential penalty in its most recent filings.
