Page 39 - IRANRptFeb22

releases. The reason behind the supposed improvement in NPL clearance is the Rouhani cabinet's move in February to approve the penalty waiver for loans amounting to IRR1bn.
8.1.5 Bank news
US prosecution of Turkey’s Halkbank for Iran sanctions-busting put on hold to allow for supreme court appeal
State banks in Iran continue to cut costs by selling off branches surplus to requirements
A US appeals court has put the federal government's prosecution of Turkish state-owned lender Halkbank for allegedly scheming with Iran to evade American sanctions on hold while the bank appeals to the US Supreme Court.
A January 14 order from the 2nd US Circuit Court of Appeals in Manhattan granted permission to Halkbank to appeal. The order said the bank would not have to defend itself against the criminal case at the same time and expressed no view on the merit of an appeal, Reuters reported.
The US Department of Justice had opposed granting a delay. Halkbank's "meritless" claims neither raised "substantial" questions nor overcame the public interest in a speedy trial, it said.
Halkbank has pleaded not guilty to bank fraud, money laundering and conspiracy. The scheme allegedly used money servicers and front companies in Iran, Turkey and the United Arab Emirates to enable the evasion of sanctions. During the Donald Trump presidency, the case drew headlines after it became known that Turkish President Recep Tayyip Erdogan had asked Trump to halt the prosecution. Erdogan has claimed that the indictment results from the actions of self-exiled Gulenist foes who are attempting to bring down his administration. He has not presented evidence to back his claim.
The alleged misconduct of Halkbank includes helping Iran covertly transfer $20bn of restricted funds, including $1bn laundered through the US financial system, and converting oil revenue into gold and then cash to benefit Iranian interests.
In late October, the a US 2nd Circuit court said Halkbank could be prosecuted because its alleged misconduct involved commercial activity that was not covered by sovereign immunity.
Halkbank, reported Reuters, said that decision conflicted with Supreme Court precedents as it "greenlights the first criminal trial of a foreign sovereign in the nation's history", while adding that it would suffer irreparable harm if forced to defend against "a case from which it is immune."
State-owned Iranian banks are continuing with cost-cutting strategies that hinge on shutting down high street banks viewed as surplus to requirements, according to an economy ministry report cited by Donya-e Eqtesad.
Bank Melli Iran (MBI), Bank Mellat, Bank Sepah (sometimes wrongly associated with the Islamic Revolutionary Guard Corps, or IRGC) and Bank Tejarat (Trade Bank) are among those closing branches.
The state lenders have reportedly sold off branch assets for IRR280tn ($1.2bn at the free market exchange rate, but $6.7bn at the official rate) since January 2018 to private developers. The buildings are typically turned into restaurants or are torn down to make way for apartment complexes.
In the period stretching from the start of President Hassan Rouhani's first term in 2013 to the end of 2017, the state banks sold IRR135tn of commercial real estate assets, the report noted.
Successive governments in Iran have mounted increasing pressure over the years to force banks to divest all non-core assets, including companies that have come under their control following bankruptcies, impaired loans and bad
39 IRAN Country Report February 2022 www.intellinews.com