A federal judge in Manhattan has dismissed the case against Turkish state-owned bank Halkbank, which had been facing charges of circumventing sanctions against Iran, after the US government withdrew the prosecution against the bank.

Türkiye Halk Bankası, known as Halkbank, had faced charges since 2019, including fraud and money laundering. The bank was accused of carrying out transactions between 2012 and 2016 that violated US sanctions against Tehran.

Manhattan prosecutor Jay Clayton, Donald Trump’s nominee for the next Director of National Intelligence, decided to drop the charges after reaching a conditional deferred prosecution agreement (DPA) in March with the bank.

A spokesperson for the prosecution told Judge Richard Berman that Turkey’s contribution to ceasefire negotiations between Israel and Hamas following the outbreak of the war on 7 October 2023 was noted.

The case had strained diplomatic relations between Turkey and the United States.

Prior to the indictment against Halkbank, its deputy manager, Mehmet Hakan Atilla, had already faced charges for the same offences.

He was sentenced to 32 months in prison in 2018, before being granted early release in 2019 and subsequently deported from the United States.

During the trial of the former bank executive, Turkish-Iranian businessman Reza Zarrab testified against Atilla and implicated Turkish President Recep Tayyip Erdogan and Turkish ministers in the case.