20-3499-cr

United States v. Bankasi

In the

United States Court of Appeals

for the Second Circuit

AUGUST TERM 2020

No. 20-3499-cr

UNITED STATES OF AMERICA,

Appellee,

v.

TURKIYE HALK BANKASI A.S., AKA HALKBANK,

Defendant-Appellant,

REZA ZARRAB, AKA RIZA SARRAF, CAMELIA JAMSHIDY, AKA KAMELIA 

JAMSHIDY, HOSSEIN NAJAFZADEH, MOHAMMAD ZARRAB, AKA CAN 

SARRAF, AKA KARTALMSD, MEHMET HAKAN ATILLA, MEHMET ZAFER 

CAGLAYAN, ABI, SULEYMAN ASLAN, LEVENT BALKAN, ABDULLAH 

HAPPANI,

Defendants.

Appeal from the United States District Court

for the Southern District of New York
2

ARGUED: APRIL 12, 2021

DECIDED: OCTOBER 22, 2021

Before: KEARSE, CABRANES, and BIANCO, Circuit Judges.

This case presents two questions. First, whether a denial of a 

motion to dismiss a criminal indictment based on the Foreign 

Sovereign Immunities Act (“FSIA”) is immediately appealable under 

the collateral order doctrine. Second, whether FSIA confers immunity 

on foreign sovereigns from criminal prosecutions. We answer the first 

question in the affirmative. As to the second, we hold that even if we 

were to assume that FSIA confers immunity in the criminal context, 

the offense conduct with which Defendant-Appellant Turkiye Halk 

Bankasi A.S. is charged would fall under the commercial activity 

exception to FSIA. Accordingly, we DENY the Government’s motion 

to dismiss this appeal, and we AFFIRM the Decision and Order of the 

United States District Court for the Southern District of New York 

(Richard M. Berman, Judge).

SIDHARDHA KAMARAJU (Michael D. Lockard, 

David W. Denton, Jr., Jonathan E. Rebold, 

Thomas McKay, on the brief), Assistant 

United States Attorneys, for Damian 

Williams, United States Attorney for the 
3

Southern District of New York, New York, 

NY, for Appellee.

SIMON A. LATCOVICH (Robert M. Cary, Eden 

Schiffmann, James W. Kirkpatrick, on the 

brief), Williams & Connolly, LLP,

Washington, D.C., for Defendant- Appellant.

JOSÉ A. CABRANES, Circuit Judge:

This case presents two questions. First, whether a denial of a 

motion to dismiss a criminal indictment based on the Foreign 

Sovereign Immunities Act (“FSIA”) is immediately appealable under 

the collateral order doctrine. Second, whether FSIA confers immunity 

on foreign sovereigns from criminal prosecutions. We answer the first 

question in the affirmative. As to the second, we hold that even if we 

were to assume that FSIA confers immunity in the criminal context, 

the offense conduct with which Defendant-Appellant Turkiye Halk 

Bankasi A.S. (“Halkbank”) is charged would fall under the commercial 

activity exception to FSIA. Accordingly, we DENY the Government’s 

motion to dismiss this appeal, and we AFFIRM the Decision and 

Order of the United States District Court for the Southern District of 

New York (Richard M. Berman, Judge).

I. BACKGROUND

Halkbank is a commercial bank that is majority-owned by the 

Government of Turkey.
4

In 2019 a grand jury returned a Superseding Indictment (the 

“Indictment”) charging Halkbank with participating in a multi-year 

scheme to launder billions of dollars’ worth of Iranian oil and natural 

gas proceeds in violation of U.S. sanctions against the Government of 

Iran and Iranian entities and persons. The oil and natural gas proceeds 

were held in Halkbank accounts on behalf of the Central Bank of Iran 

(“CBI”), the National Iranian Oil Company (“NIOC”), and the 

National Iranian Gas Company (“NIGC”).1

The Indictment alleged that Halkbank knowingly facilitated 

certain types of illegal transactions, including: (1) “allowing the 

proceeds of sales of Iranian oil and gas deposited at Halkbank to be 

used to buy gold for the benefit of the Government of Iran”; (2) 

“allowing the proceeds of sales of Iranian oil and gas deposited at 

Halkbank to be used to buy gold that was not exported to Iran”;2 and 

1 It is not disputed that the CBI, NIOC, and NIGC were all subject to U.S. 

sanctions during the charged offense conduct or indictment period.

2 The National Defense Authorization Act for Fiscal Year 2012 (the “2012 

NDAA”), Pub. L. No. 112-81, requires the imposition of sanctions on foreign 

financial institutions following a determination by the President that the institution 

has violated certain prohibitions on activities with respect to the Central Bank of 

Iran or another Iranian financial institution designated under the International 

Emergency Economic Powers Act (“IEEPA”). See generally U.S. Dep’t of the 

Treasury, Frequently Asked Questions: Iran Sanctions, available at 

https://home.treasury.gov/policy-issues/financial-sanctions/faqs/topic/1551 (last 

accessed August 17, 2021) (FAQs 169-70). Government-owned foreign financial 

institutions, like Halkbank, are prohibited from engaging in transactions for the 

sale or purchase of petroleum or petroleum products to or from Iran. See id (FAQ 

170). Under the terms of the 2012 NDAA, foreign countries could be exempted from 

sanctions for purchasing Iranian oil so long as they significantly reduced their 
5

(3) “facilitating transactions fraudulently designed to appear to be 

purchases of food and medicine by Iranian customers, in order to 

appear to fall within the so-called ‘humanitarian exception’[3] to certain 

purchases of such products from Iran, the so-called “significant reduction 

exception.” See id. (FAQ 235).

Section 504 of the Iran Threat Reduction and Syria Human Rights Act of 

2012, 22 U.S.C. §§ 8711, et seq., (“ITRA”) narrowed the significant reduction 

exception “to (a) exempt from sanctions only transactions that conduct or facilitate 

bilateral trade in goods or services between the country granted the exception and 

Iran, and (b) require that funds owed to Iran as a result of the bilateral trade be 

credited to an account located in the country granted the exception and not be 

repatriated to Iran,” or the “bilateral trade restriction.” See U.S. Dep’t of the 

Treasury, Frequently Asked Questions: Iran Sanctions (FAQs 254-55). Under this 

provision, as is relevant here, the proceeds of oil sales by Iran to another country, 

like Turkey, are to be deposited in an escrow account in the purchasing country

and may only be used by Iran for further trade with that country (i.e., for trade 

between Turkey and Iran). See 22 U.S.C. § 8513a(d)(4)(D). Subsequently, under the 

Iran Freedom and Counter-Proliferation Act (“IFCA”), passed as part of the 

National Defense Authorization Act for Fiscal Year 2013, Pub. L. No. 112-239, 

sanctions may apply to foreign financial institutions that conduct or facilitate a 

transaction for the sale, supply, or transfer of natural gas to or from Iran unless, as 

with proceeds from Iran’s oil sales, any funds owed to Iran as a result of the trade 

are credited to an account located in the purchasing country. See U.S. Dep’t of the 

Treasury, Frequently Asked Questions: Iran Sanctions (FAQs 297, 313).

3 The 2012 NDAA included an exception for transactions for the sale of food, 

medicine, or medical devices to Iran. See id. (FAQ 641) (“Transactions for the sale 

of agricultural commodities, food, medicine, or medical devices to Iran involving 

the [CBI] are excepted from the relevant sanctions under section 1245(d)(2) of the 

NDAA 2012 and sections 561.203 and 561.204 of the Iranian Financial Sanctions 

Regulations. . . . ”).
6

sanctions against the Government of Iran, when in fact no purchases 

of food or medicine actually occurred.”4

Through the charged scheme, Halkbank allegedly transferred

approximately $20 billion of otherwise restricted Iranian funds in 

order to create a “pool of Iranian oil funds . . . held in the names of 

front companies, which concealed the funds’ Iranian nexus.”5 These 

funds were then used to make international payments on behalf of the 

Government of Iran and Iranian banks, including at least $1 billion in

dollar-denominated transfers that passed through the U.S. financial 

system in violation of U.S. law.

Further, Halkbank executives, acting within the scope of their 

employment and for the benefit of Halkbank, are alleged to have

concealed the true nature of the transactions Halkbank made on behalf 

of the Government of Iran from officials at the U.S. Department of the 

Treasury (the “Treasury”).6 To conceal these transactions, Halkbank 

4 Indictment ¶ 4. 

5 Id. ¶¶ 4, 6. 

6 These executives included: (1) Halkbank’s former General Manager, 

Suleyman Aslan; (2) Halkbank’s former Deputy General Manager for International 

Banking, Mehmet Hakan Atilla, who was responsible for maintaining Halkbank’s 

correspondent banking relationships, including with U.S. correspondent banks, 

and for maintaining Halkbank’s relationships with Iranian banks, including the 

Central Bank of Iran; and (3) the former head of Halkbank’s Foreign Operations 

Department, Levent Balkan. These individual defendants are not parties to the 

present appeal; the Government informs us that Aslan and Balkan were charged 

separately and remain at large, while Atilla was convicted, following a jury trial, of 
7

officers allegedly conspired with Reza Zarrab, an Iranian-Turkish 

businessman, and other Turkish and Iranian government officials, 

some of whom are alleged to have received millions of dollars from 

the proceeds of the scheme in exchange.7

Halkbank was charged in the six-count Indictment with:

conspiring to defraud the United States by obstructing the lawful 

functions of the Treasury, in violation of 18 U.S.C. § 371 (Count One);

conspiring to violate or cause violations of licenses, orders, 

regulations, and prohibitions issued under the International 

Emergency Economic Powers Act (“IEEPA”), codified at 50 U.S.C. §§ 

1701-06 (Count Two); bank fraud, in violation of 18 U.S.C. § 1344 

(Count Three); conspiring to commit bank fraud, in violation of 18 

U.S.C. § 1349 (Count Four); money laundering, in violation of 18 U.S.C. 

§ 1956(a)(2)(A) (Count Five); and conspiring to commit money 

laundering, in violation of 18 U.S.C. § 1956(h) (Count Six).

On August 10, 2020, Halkbank moved to dismiss the Indictment, 

arguing that FSIA renders it immune from criminal prosecution

because it is majority-owned by the Turkish Government.8 Halkbank 

offenses charged separately. See United States v. Atilla, 966 F.3d 118 (2d Cir. 2020); 

Gov’t Br. at 4-5 n.2. 

7 Zarrab pleaded guilty to the charges against him in relation to this scheme 

on October 26, 2017. 

8 The parties do not dispute that Halkbank is an “instrumentality of a 

foreign state” for purposes of FSIA. See Halkbank Br. at 8. Under FSIA, an 

“instrumentality of a foreign state” includes “any entity” for which “a majority of 

[its] shares or other ownership interest is owned by a foreign state.” 28 U.S.C. 
8

further argued that FSIA’s exceptions to immunity are applicable only

in civil cases—not in criminal cases—and that, in any event, even if 

FSIA’s exceptions did apply in the criminal context, the conduct with 

which Halkbank is charged does not fall within the ambit of FSIA’s socalled “commercial activity” exception. Finally, even if FSIA did not 

bar its prosecution, Halkbank argued that it was nevertheless entitled 

to immunity from prosecution under the common law.

Following briefing and oral argument, the District Court denied 

Halkbank’s motion in a Decision and Order dated October 1, 2020. The

District Court principally concluded that Halkbank was not immune 

from prosecution because FSIA confers immunity on foreign

sovereigns only in civil proceedings. The District Court went on to 

conclude that, even assuming arguendo that FSIA did confer immunity 

to foreign sovereigns in criminal proceedings, Halkbank’s conduct 

would fall within FSIA’s commercial activity exception. The District 

Court also rejected Halkbank’s contention that it was entitled to 

immunity from prosecution under the common law, noting that 

Halkbank failed to cite any support for its claim on this basis. 

Halkbank timely appealed.

On appeal, Halkbank moved to stay the District Court 

proceedings pending resolution of this appeal, which the Government 

opposed. The Government then moved to dismiss Halkbank’s appeal, 

taking the position that the District Court’s denial of Halkbank’s 

§ 1603(b)(2). For purposes of this opinion, we use foreign sovereign and foreign 

state interchangeably. 
9

motion to dismiss the Indictment on the basis of foreign sovereign 

immunity is not subject to interlocutory review by our Court.

A motions panel of our Court granted Halkbank’s motion for a 

stay and referred the decision on the Government’s motion to dismiss

to the merits panel.

II. DISCUSSION

A. Appellate Jurisdiction 

As a threshold matter, we must consider whether we have 

jurisdiction over this appeal, which is taken from the District Court’s 

denial of Halkbank’s motion to dismiss the Indictment on the basis of 

foreign sovereign immunity. 

The Government challenges our jurisdiction, asserting that the 

District Court’s sovereign immunity determination is neither a final

judgment nor an order that qualifies for interlocutory appeal. We do 

not agree. 

While Congress has limited our jurisdiction to “final decisions 

of the district courts,”9 we have recognized a narrow exception to the 

final judgment rule that permits interlocutory appeals from certain 

“collateral orders.” It is well established that, to qualify for

interlocutory appeal under the collateral order doctrine, a decision 

must: (1) “conclusively determine the disputed question”; (2) “resolve 

an important issue completely separate from the merits of the action”;

9 28 U.S.C. § 1291. 
10

and (3) “be effectively unreviewable on appeal from a final 

judgment.”10

We have “consistently held that [a] threshold [foreign]

sovereign-immunity determination is immediately reviewable under 

the collateral-order doctrine.”11 But, as the Government points out, our 

holding on this point concerned a sovereign immunity determination

in the civil, not criminal, context. Because the Supreme Court has made 

clear that the collateral order doctrine is to be applied in criminal cases 

with the “utmost strictness,”12 the Government argues that a threshold 

sovereign immunity determination in a criminal case cannot qualify 

for the collateral order exception to the final judgment rule.

It is true that the Supreme Court has “emphasized that one of 

the principal reasons for . . . strict adherence to the doctrine of finality 

in criminal cases is that the Sixth Amendment guarantees a speedy 

10 Coopers & Lybrand v. Livesay, 437 U.S. 463, 468 (1978), superseded on other 

grounds by Fed. R. Civ. P. 23(f).

11 Funk v. Belneftekhim, 861 F.3d 354, 363 (2d Cir. 2017) (first alteration in 

original) (internal quotation marks omitted). 

12 Midland Asphalt Corp. v. United States, 489 U.S. 794, 799 (1989) (internal 

quotation mars omitted). Indeed, the Supreme Court has recognized just four 

categories of orders that are immediately appealable in criminal cases: (1) denials

of motions to reduce bail; (2) denials of motions to dismiss on double-jeopardy 

grounds; (3) denials of motions to dismiss under the Speech or Debate Clause, and 

(4) orders for the forced medication of criminal defendants. See id.; Sell v. United 

States, 539 U.S. 166, 176-77 (2003).
11

trial.”13 Still, that the Supreme Court has not yet held that a sovereign

immunity determination in a criminal case falls within the collateral 

order doctrine does not necessarily foreclose that outcome.14

Indeed, where, as here, a sovereign immunity determination in 

the criminal context plainly satisfies the criteria set forth by the 

Supreme Court in Coopers & Lybrand, applied with the “utmost 

strictness,” it qualifies for interlocutory review. First, the District 

Court’s sovereign immunity determination conclusively determined 

the issue against Halkbank.15 Second, Halkbank’s professed 

entitlement to immunity is an issue distinct from the merits of the 

charges at issue.16 Third, an “appeal from [a] final judgment cannot 

repair the damage caused to a sovereign that is improperly required 

to litigate a case.”17 Put another way, “the denial of immunity is 

effectively unreviewable after final judgment because defendants 

13 United States v. MacDonald, 435 U.S. 850, 861 (1978) (internal quotation 

marks and alteration omitted). 

14 Our Circuit has also held that commitment orders, United States v. 

Magassouba, 544 F.3d 387, 400 (2d Cir. 2008), and orders allowing the government 

to try a juvenile as an adult, United States v. Doe, 49 F.3d 859, 865 (2d Cir. 1995), are 

immediately appealable in criminal cases. 

15 See Funk, 861 F.3d at 362-63.

16 See id. at 363.

17 EM Ltd. v. Banco Central de la Republica Argentina, 800 F.3d 78, 87 (2d Cir. 

2015); see also Bolivarian Republic of Venezuela v. Helmerich & Payne Int'l Drilling Co., 

137 S. Ct. 1312, 1317 (2017) (observing that the “basic objective” of foreign sovereign 

immunity is “to free a foreign sovereign from suit” so that it should be decided “as 

near to the outset of the case as is reasonably possible” (emphasis in original)).
12

must litigate the case to reach judgment and, thus, lose the very 

immunity from suit to which they claim to be entitled.”18

In sum, we hold that a threshold sovereign immunity 

determination is immediately appealable pursuant to the collateral 

order doctrine—even in a criminal case. Accordingly, we have 

jurisdiction to review the District Court’s sovereign immunity 

determination.

B. Subject Matter Jurisdiction

On appeal, Halkbank principally contends that the District 

Court lacks subject matter jurisdiction because it has sovereign 

immunity from criminal prosecution under § 1604 of FSIA, which 

grants immunity to foreign sovereigns “from the jurisdiction of the 

courts of the United States,” unless a statutory exception applies.19

i. Standard of Review

On appeal, “[w]e review de novo a district court’s legal 

determinations regarding its subject matter jurisdiction, such as 

whether sovereign immunity exists, and its factual determinations for 

clear error.”20

18 Funk, 861 F.3d at 363. 

19 28 U.S.C. § 1604.

20 Petersen Energía Inversora S.A.U. v. Argentine Republic & YPF S.A., 895 F.3d 

194, 203 (2d Cir. 2018) (internal quotation marks omitted). 
13

ii. The Foreign Sovereign Immunities Act

It is well established that Article III of the United States 

Constitution grants federal courts jurisdiction to hear claims involving 

“foreign States.”21 Still, for most of our history, foreign sovereigns 

enjoyed absolute immunity in U.S. courts as “a matter of grace and 

comity”22 in light of the “perfect equality and absolute independence 

of sovereigns.”23 Accordingly, federal courts “consistently . . . deferred 

to the decisions of the political branches—in particular, those of the 

Executive Branch—on whether to take jurisdiction over actions against 

foreign sovereigns and their instrumentalities.”24 In practice, the U.S. 

Department of State would routinely make requests for immunity in 

all actions against “friendly sovereigns.”25

Then, in 1952, the Acting Legal Adviser to the State Department, 

Jack B. Tate, issued a letter announcing the State Department’s 

adoption of a so-called “restrictive” theory of foreign sovereign 

immunity.26 Under this theory, the State Department would take the 

21 U.S. CONST. art. III, § 2, cl. 1. 

22 Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 486 (1983). 

23 The Schooner Exchange v. McFaddon, 11 U.S. (7 Cranch) 116, 137 (1812). 

24 Verlinden, 461 U.S. at 486. 

25 Samantar v. Yousef, 560 U.S. 305, 312 (2010). 

26 Letter from Jack B. Tate, Acting Legal Adviser, Dep’t of State, to Acting 

Attorney General Philip B. Perlman (May 19, 1952), reprinted in 26 Dep't of State 

Bull. 984–85 (1952) and in Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 

682, 711-15 (1976) (App’x 2 to opinion of White, J.).
14

position that foreign sovereigns were not immune from liability in U.S. 

courts for acts that are “private or commercial in character (jure 

gestionis)”; rather, foreign sovereigns would only enjoy immunity for

their “sovereign or public acts (jure imperii).”27 The State Department’s 

new position threw immunity determinations for foreign sovereigns 

into “disarray.”28 Indeed, foreign nations lobbied the State 

Department for immunity, with the result that “political 

considerations sometimes led the Department to file suggestions of 

immunity in cases where immunity would not have been available 

under the restrictive theory.”29 And, when foreign nations did not

request immunity from the State Department, the federal courts were 

left to “determine whether sovereign immunity existed, generally by 

reference to prior State Department decisions.”30 As a result, 

“sovereign immunity determinations were made in two different 

branches, subject to a variety of factors [that] sometimes include[d]

27 Saudi Arabia v. Nelson, 507 U.S. 349, 359-60 (1993). 

28 Republic of Austria v. Altmann, 541 U.S. 677, 690 (2004).

29 Id. (internal quotation marks omitted); see also Curtis A. Bradley & Jack L. 

Goldsmith, Foreign Sovereign Immunity, Individual Officials, and Human Rights 

Litigation, 13 GREEN BAG 2D 9, 19 (2009) (“[T]he pre-FSIA common law regime of 

executive discretion in determining foreign sovereign immunity” was 

“characterized by unprincipled conferrals of immunity based on the political 

preferences of the presidential administration and case-by-case diplomatic 

pressures.”)

30 Altmann, 541 U.S. at 690 (internal quotation marks omitted). 
15

diplomatic considerations” and “the governing standards were 

neither clear nor uniformly applied.”31

As discussed in a recent case, the consequent “inconsistent 

application of sovereign immunity” attracted Congressional notice.32

In 1976 Congress enacted FSIA to “endorse and codify the [State 

Department’s] restrictive theory of sovereign immunity” and to

“transfer primary responsibility for deciding claims of foreign states 

to immunity from the State Department to the courts.”33 Under § 1604 

of FSIA, foreign sovereigns are “immune from the jurisdiction of the 

courts of the United States,”34 with certain exceptions, including an 

exception for the “commercial activity” of a foreign sovereign.35 FSIA

also grants subject matter jurisdiction to federal district courts over 

“any nonjury civil action against a foreign state . . . to which the foreign 

state is not entitled to immunity.”36

iii. FSIA in the Criminal Context

31 Id. at 691 (internal quotation marks omitted). 

32 Samantar, 560 U.S. at 313. 

33 Id. (internal quotation marks omitted); see also 28 U.S.C. § 1602 (setting 

forth Congressional findings and the purposes of FSIA). 

34 28 U.S.C. § 1604 (“Subject to existing international agreements to which 

the United States is a party at the time of enactment of this Act a foreign state shall 

be immune from the jurisdiction of the courts of the United States and of the States 

except as provided in sections 1605 to 1607 of this chapter.”).

35 Id. § 1605(a)(2).

36 Id. § 1330(a). 
16

By enacting FSIA, Congress established a comprehensive 

framework “governing claims of immunity in every civil action 

against a foreign state or its political subdivisions, agencies, or 

instrumentalities.”37 By its terms, FSIA plainly confers immunity on 

foreign sovereigns from civil actions—albeit with certain exceptions.38

What is less clear, however, is whether Congress also intended for 

FSIA to confer immunity on instrumentalities of foreign sovereigns in 

criminal cases.39

Halkbank takes the position that § 1604 of FSIA confers 

immunity on foreign sovereigns and their instrumentalities from 

criminal prosecution. In particular, Halkbank argues that § 1604, 

which confers immunity (with enumerated exceptions) on foreign 

sovereigns “from the jurisdiction of the courts of the United States,” 

must be read “in tandem”40 with a separate provision of FSIA, § 

1330(a), which grants district courts jurisdiction over “any nonjury 

37 Verlinden, 461 U.S. at 488. 

38 See 28 U.S.C. § 1330(a). 

39 Other circuits to consider FSIA’s availability in criminal cases have split. 

Compare Southway v. Cent. Bank of Nigeria, 198 F.3d 1210, 1215 (10th Cir. 1999)

(concluding in the context of a civil Racketeer Influenced and Corrupt 

Organizations Act (“RICO”) claim that if Congress intended defendants such as the 

Republic of Nigeria “to be immune from criminal indictment under the FSIA, 

Congress should amend the FSIA to expressly so state”), and United States v. Noriega, 

117 F.3d 1206, 1212 (11th Cir. 1997) (same, in a case involving head-of-state 

immunity), with Keller v. Cent. Bank of Nigeria, 277 F.3d 811, 820 (6th Cir. 2002) 

(considering FSIA in the context of civil RICO, but holding that FSIA does apply to 

criminal cases). 

40 Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434 (1989).
17

civil action against a foreign state.”41 Thus, Halkbank urges that, the 

absence of any express grant of criminal jurisdiction over foreign 

sovereigns in § 1330(a), combined with § 1604’s general grant of 

immunity to foreign sovereigns from the jurisdiction of U.S. courts, 

necessarily leads to the conclusion that foreign sovereigns and their 

instrumentalities are immune from criminal prosecution.

As an initial matter, to the extent Halkbank’s challenge rests on 

the idea that FSIA is the sole basis for the District Court’s subject 

matter jurisdiction over this criminal prosecution, that premise is 

incorrect.42 It is true that we have held, in the civil context, that “FSIA 

provides the sole basis for obtaining jurisdiction over a foreign state in 

the courts of this country.”43 But federal district courts have “original 

jurisdiction, exclusive of the courts of the States, of all offenses against 

the laws of the United States” pursuant to § 3231 of Title 18 of the U.S. 

Code.44 As one of our sister circuits recently observed, “[i]t is hard to 

imagine a clearer textual grant of subject-matter jurisdiction”— “‘[a]ll’ 

41 28 U.S.C. § 1330(a) (emphasis added).

42 In support of this proposition Halkbank relies on Amerada Hess, in which 

the Supreme Court wrote that “the text and structure of FSIA demonstrate 

Congress’ intention that the FSIA be the sole basis for obtaining jurisdiction over a 

foreign state in our courts.” 488 U.S. at 434. But Amerada Hess was a civil case and 

neither our Court nor the Supreme Court has ever extended this holding to a 

criminal case.

43 Barnet as Tr. of 2012 Saretta Barnet Revocable Tr. v. Ministry of Culture & 

Sports of the Hellenic Republic, 961 F.3d 193, 199 (2d Cir. 2020) (internal quotation 

marks omitted).

44 18 U.S.C. § 3231 (emphasis added). 
18

means ‘all.’”45 Indeed, § 3231 “contains no carve-out” that supports an 

exemption for federal offenses committed by foreign sovereigns, and 

“nothing in the [FSIA’s] text expressly displaces [§] 3231’s 

jurisdictional grant.”46

Although Halkbank argues that § 1604’s broad grant of 

sovereign immunity cuts back on § 3231’s grant of criminal 

jurisdiction, that logic is unavailing. Indeed, we agree with our sister 

circuit that (in an analogy we now understand all too well in this time 

of global pandemic) “granting a particular class of defendants 

‘immunity’ from jurisdiction has no effect on the scope of the 

underlying jurisdiction, any more than a vaccine conferring immunity

from a virus affects the biological properties of the virus itself.”47

We think that the District Court plainly has subject matter 

jurisdiction over the federal criminal prosecution of Halkbank 

pursuant to § 3231. However, we need not—and do not—decide 

whether § 1604 of FSIA confers immunity on foreign sovereigns in the 

criminal context. As we explain below, even assuming arguendo that 

FSIA confers sovereign immunity in criminal cases, the offense 

45 In re Grand Jury Subpoena, 912 F.3d 623, 628 (D.C. Cir. 2019). 

46 Id. 

47 Id. 
19

conduct with which Halkbank is charged falls within FSIA’s 

commercial activities exception to sovereign immunity.48

iv. FSIA’s Commercial Activity Exception to Sovereign Immunity

The Government submits that, even assuming that FSIA confers 

immunity to foreign sovereigns in criminal cases, Halkbank’s charged 

offense conduct would fall within FSIA’s exception to sovereign 

immunity for commercial activity. We agree.

Section 1605(a)(2) of FSIA, the statute’s commercial activity 

exception, provides that “[a] foreign state shall not be immune from 

the jurisdiction of courts of the United States or of the States in any 

case” in which the action is based upon (1) “a commercial activity 

carried on in the United States by the foreign state”; (2) “upon an act 

performed in the United States in connection with a commercial 

activity of the foreign state elsewhere”; or (3) “upon an act outside the 

territory of the United States in connection with a commercial activity 

48 We also note that, although Halkbank takes the position that FSIA’s § 1604 

confers sovereign immunity in criminal cases, it also takes the position that FSIA’s 

exceptions to sovereign immunity, which are set forth in § 1605, are not available in 

criminal proceedings. Under this reasoning, a foreign sovereign could be liable 

under FSIA’s commercial activity exception in the civil context, but immune from 

criminal liability for the same commercial conduct. We are skeptical that Congress 

intended for § 1604’s grant of immunity to sweep far more broadly in criminal cases 

than in civil cases. Further, the text of § 1605 plainly states that FSIA’s exceptions to 

foreign sovereign immunity apply “in any case.” 28 U.S.C. § 1605(a) (emphasis 

added). Just as “all” means “all,” so must “any” mean “any.”
20

of the foreign state elsewhere and that act causes a direct effect in the 

United States.”49

To fall within the commercial activity exception, Halkbank’s 

activities need to qualify for at least one of the categories specified in 

the three clauses of § 1605(a)(2).

We begin this inquiry by identifying an “act of the foreign 

sovereign [s]tate” that is “‘based upon’ the ‘particular conduct’ that 

constitutes the ‘gravamen’ of the suit.”50 Here, the Indictment alleges 

that Halkbank “participated in the design of fraudulent transactions 

intended to deceive U.S. regulators and foreign banks” in order to 

launder approximately $1 billion in Iranian oil and gas proceeds 

through the U.S. financial system.51 The Indictment further alleges that 

Halkbank lied to Treasury officials regarding the nature of these 

transactions in an effort to hide the scheme and avoid U.S. sanctions.

This conduct plainly constitutes the “gravamen” of the charges against 

Halkbank. 

49 28 U.S.C. § 1605(a)(2). 

50 Petersen Energía, 895 F.3d at 204 (quoting OBB Personenverkehr AG v. Sachs, 

577 U.S. 27, 35 (2015)); see also Barnet, 961 F.3d at 200 (“We first must identify [the] 

predicate act that serves as the basis for plaintiff’s claims.”) (internal quotation 

marks omitted). 

51 Indictment ¶¶ 1, 64. 
21

We next consider whether the identified act took place inside or 

outside the United States, and whether the act constitutes commercial 

activity within the meaning of FSIA. 

FSIA defines “commercial activity” in a circular manner, as 

meaning “either a regular course of commercial conduct or a particular 

commercial transaction or act.”52 But FSIA does go on to provide that 

“[t]he commercial character of an activity shall be determined by 

reference to the nature of the course of conduct or particular

transaction or act, rather than by reference to its purpose.”53 In 

applying this provision of FSIA, we have held that “purpose is the 

reason why the foreign state engages in the activity and nature is the 

outward form of the conduct that the foreign state performs or agrees 

to perform.”54 Put another way, “the issue is whether the particular 

actions that the foreign state performs . . . are the type of actions by 

which a private party engages in trade and traffic or commerce.”55

Whether a foreign state acts in the manner of a private party to engage 

52 28 U.S.C. § 1603(d).

53 Id.

54 Pablo Star Ltd. v. Welsh Government, 961 F.3d 555, 561 (2d Cir. 2020)

(emphasis added) (other emphases and internal quotation marks omitted).

55 Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 614 (1992) (emphasis in 

original) (internal quotation marks omitted). We note that such commercial activity 

has “been held to include criminal acts if those actions are ones in which private 

parties could engage and if they are committed in the course of business or trade, 

including illegal contracts to steal money, bribery, forgery, and mail, wire, and 

securities fraud.” Restatement (Fourth), The Foreign Relations Law of the United 

States § 454 rn. 3.
22

in commercial activity is thus “a question of behavior, not 

motivation.”56

Here, Halkbank’s alleged offense conduct qualifies as 

commercial activity under all three categories set forth in § 1605(a)(2).

As to the first two clauses of § 1605(a)(2), Halkbank’s activities 

in the United States—that is, Halkbank’s communications with 

Treasury officials, including communications made in meetings and in 

conference calls, in furtherance of its efforts to evade U.S. sanctions—

qualify under both. Although Halkbank is majority-owned by the 

Government of Turkey, such communications are plainly the type of 

activity in which banks, including privately owned correspondent 

banks, routinely engage.57 Just as in Pablo Star, where we observed that 

“[l]iterally anyone can do”58 copyright infringement, so, too, can 

literally any bank violate sanctions. Halkbank’s interactions with the 

Treasury were therefore “commercial activity carried on in the United 

States” or, in the alternative, “act[s] performed in the United States in 

connection with a commercial activity . . . elsewhere”—specifically, its 

banking activities in Turkey on behalf of the Government of Iran.59

As to the third clause of § 1605(a)(2), Halkbank’s activities 

outside the United States—Halkbank’s participation in schemes to 

56 Nelson, 507 U.S. at 360.

57 Cf. Weltover, 504 U.S. at 614. 

58 Pablo Star, 961 F.3d at 562.

59 28 U.S.C. § 1605(a)(2).
23

launder Iranian oil and gas proceeds through non-U.S. 

transactions60—also qualify as commercial activities for the same 

reasons. In addition, such activities were Halkbank’s “commercial 

activit[ies] . . . elsewhere” that nevertheless caused a “direct effect” in 

the United States by causing victim-U.S. financial institutions to take 

part in laundering over $1 billion through the U.S. financial system in 

violation of U.S. law.61

With respect to the third clause, Halkbank argues that its 

activities outside the United States were “sovereign, not commercial”

because the Government of Turkey has designated Halkbank as its 

“sole repository of proceeds from the sale of Iranian oil to Turkey’s 

national oil company and gas company,” consistent with applicable 

U.S. laws.62 But we rejected a similar argument in Pablo Star. In that 

case, we were faced with a copyright dispute over the Welsh 

Government’s use of the likeness of the poet Dylan Thomas in its 

promotional materials. The Welsh Government urged us to 

characterize its activities as promoting Welsh culture and tourism 

60 These transactions included purchases of gold using Iranian oil and gas 

proceeds as well as transactions fraudulently disguised as purchases of food and 

medicine, which would have fallen under a “humanitarian exception” to the U.S. 

sanctions regime. Indictment ¶ 4.

61 28 U.S.C. § 1605(a)(2).

62 Halkbank Br. at 40-41 (internal quotation marks omitted); see also supra

note 2, at 5 (explaining that the ITRA amended the 2012 NDAA to require the 

proceeds of Iranian oil sales between Iran and another country, like Turkey, to be 

deposited in a specified account in that country to only be used for trade with that 

country). 
24

pursuant to a statutory mandate—activity that it asserted was

distinctly “sovereign” in nature that would qualify for immunity 

under FSIA.63 We declined to do so, observing that the Welsh 

government’s broad characterization of its activities “conflate[s] the 

act with its purpose.”64

Here, Halkbank’s broad characterization of its activities as 

sovereign in nature also “conflates the act with its purpose.” The 

gravamen of the Indictment is not that Halkbank is the Turkish 

Government’s repository for Iranian oil and natural gas proceeds in 

Turkey, i.e., the purpose for which it held these funds. Rather, it is 

Halkbank’s participation in money laundering and other fraudulent 

schemes designed to evade U.S. sanctions that is the “core action taken 

by [Halkbank] outside the United States.”65 And because those core 

acts constitute “an activity that could be, and in fact regularly is, 

performed by private-sector businesses,” those acts are commercial, 

not sovereign, in nature.66

Halkbank also argues that its activities elsewhere did not have 

a “direct effect” in the United States. That is plainly not the case. We 

find a direct effect if “an effect simply followed as an immediate 

63 Pablo Star, 961 F.3d at 562.

64 Id. This reflects a fundamental issue with the nature-purpose distinction, 

which is that its “application may sometimes depend on the level of generality at 

which the conduct is viewed.” Id. at 561. 

65 Barnet, 961 F.3d at 200 (internal quotation marks omitted). 

66 Pablo Star, 961 F.3d at 562. 
25

consequence of the defendant’s activity.”67 That effect “need not be 

substantial or foreseeable.”68 Again, Halkbank’s activities outside the 

United States led to approximately $1 billion being laundered through 

the U.S. financial system. 

In sum, even assuming arguendo that FSIA confers immunity on 

the instrumentalities of foreign sovereigns in the criminal context, 

Halkbank’s charged offense conduct would fall within FSIA’s

commercial activity exception to sovereign immunity. 

C. Common Law Immunity

Halkbank argues that even if FSIA does not confer foreign 

sovereign immunity in criminal cases, it is nevertheless immune from

criminal prosecution under common law. We do not agree. 

Assuming arguendo that FSIA does confer sovereign immunity 

in criminal cases—a holding we do not reach today—its enactment

displaced any pre-existing common-law practice.69 Further, even 

assuming that FSIA did not supersede the pertinent common law, any 

foreign sovereign immunity at common law also had an exception for

67 Barnet, 961 F.3d at 199 (internal quotation marks and alteration omitted). 

68 Peterson Energía, 895 F.3d at 205. 

69 See, e.g., Samantar, 560 U.S. at 312-13; Amerada Hess, 488 U.S. at 435

(recognizing the “general rule that the [FSIA] governs the immunity of foreign 

states in federal court” (internal quotation marks omitted)).
26

a foreign state’s commercial activity,70 just like FSIA’s commercial 

activity exception. 

Finally, in any event, at common law, sovereign immunity

determinations were the prerogative of the Executive Branch; thus, the 

decision to bring criminal charges would have necessarily manifested

the Executive Branch’s view that no sovereign immunity existed.71

III. CONCLUSION

To summarize, we hold as follows:

(1) We have jurisdiction over the instant appeal pursuant to the 

collateral order doctrine;

(2) Even assuming FSIA applies in criminal cases—an issue that 

we need not, and do not, decide today—the commercial 

activity exception to FSIA would nevertheless apply to 

Halkbank’s charged offense conduct; thus, the District Court 

did not err in denying Halkbank’s motion to dismiss the 

Indictment; and

70 See, e.g., Verlinden, 461 U.S. at 487-88. Under the restrictive view of 

immunity under customary international law, “states are generally required to 

afford immunity from jurisdiction to adjudicate to foreign states in respect to claims 

arising out of government activities . . . but not in respect to claims arising out of 

activities of a kind carried on by private persons . . . including commercial 

activities.” Restatement (Fourth), The Foreign Relations Law of the United States 

§ 454 cmt. h. 

71 See Verlinden, 461 U.S. at 486.
27

(3) Halkbank, an instrumentality of a foreign sovereign, is not

entitled to immunity from criminal prosecution at common 

law. 

For the foregoing reasons, we DENY the Government’s motion 

to dismiss this appeal, and we AFFIRM the District Court’s Decision

and Order dated October 1, 2020.