Author Topic: Justices probe global consequences of allowing U.S. prosecutions of companies owned by foreign gover  (Read 325 times)

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SCOTUSblog by Amy Howe 1/17/2023

The Supreme Court heard oral argument on Tuesday in the case of a Turkish bank that the U.S. government accuses of committing money laundering and fraud as part of a scheme to evade U.S. sanctions against Iran. During over 90 minutes of debate, the justices appeared skeptical of the bank’s contention that federal laws bar the government from prosecuting the bank, but they also expressed concern about the consequences of allowing the prosecution to go forward.

Halkbank, whose majority shareholder is the Turkish government, was indicted in 2019 on charges that it had participated in a multi-year scheme to launder billions of dollars stemming from the sales of Iranian oil and natural gas. In the Supreme Court on Tuesday, lawyer Lisa Blatt told the justices that allowing criminal prosecutions of foreign countries and their publicly owned businesses would be “unprecedented” and would “risk retaliation” by other countries against U.S. entities.

The Foreign Sovereign Immunities Act, which generally bars lawsuits against foreign governments in U.S. courts, Blatt continued, does not apply solely to civil lawsuits. It also prohibits criminal cases against foreign countries, she said. A ruling that the FSIA only confers immunity in civil lawsuits, Blatt suggested, would mean that Congress “created special guidelines for civil suits, but threw sovereigns to the wolves” for criminal cases.

Representing the federal government, Deputy Solicitor General Eric Feigin countered that it is the bank, rather than the government, which is “asking for an extraordinary and unprecedented rule.” A ruling for the bank, Feigin posited, would allow foreign governments to use state-owned corporations to interfere with U.S. elections, steal nuclear secrets, and circumvent sanctions, even though there is no support for such a broad grant of immunity to foreign-owned corporations.

The justices spent relatively little time on the question whether, as the federal government contends, criminal prosecutions of foreign states are allowed under a separate federal law, 18 U.S.C. § 3231, that gives federal district courts power to adjudicate “all offenses against the laws of the United States.” The bank’s argument that Congress intended in the FSIA to strip U.S. courts of jurisdiction over foreign countries also received little airtime.