The United States Supreme Court has rejected arguments made by Turkiye Halk Bankasi A.S. (“Halkbank”) that, as a majority state-owned bank and thus an agency or instrumentality of the Republic of Türkiye, it enjoys immunity from criminal prosecution in the United States.Specifically, the Supreme Court addressed two questions. First, does 18 U.S.C. § 3231 (“Section 3231”)—which provides district courts with subject-matter jurisdiction over “all offenses against the laws of the United States”—allow the United States to bring criminal prosecutions against foreign sovereign defendants in federal court? If so, does the Foreign Sovereign Immunities Act (FSIA) provide foreign sovereign defendants immunity from such criminal prosecutions?In an opinion issued on April 19, 2023, the Supreme Court held that (i) the district court has jurisdiction under Section 3231 over the United States’ prosecution of Halkbank, and (ii) the FSIA does not provide foreign sovereign defendants immunity from criminal prosecution. The Supreme Court, however, remanded the case back to the Second Circuit Court of Appeals to decide whether Halkbank is entitled to common law immunity from prosecution.I. Background and Lower Court DecisionsOn October 15, 2019, the U.S. Attorney’s Office for the Southern District of New York charged Halkbank with a six-count indictment a

On October 3, 2022, the United States Supreme Court granted certiorari in Turkiye Halk Bankasi A.S. v. United States, No. 21-1450 (“Halkbank”), to determine whether federal courts have subject-matter jurisdiction over criminal prosecutions against foreign sovereign defendants. Specifically, Halkbank, a bank majority-owned by Turkey, asks the Court to decide whether 18 U.S.C. § 3231 (“Section 3231”) and the Foreign Sovereign Immunities Act (FSIA) grant federal courts jurisdiction over criminal actions brought against foreign states or their agencies or instrumentalities.Section 3231 and the FSIASection 3231 provides that “[t]he district courts of the United States shall have original jurisdiction, exclusive of the courts of the States, of all offenses against the laws of the United States.” Thus, Section 3231 grants federal courts broad jurisdiction over criminal matters.The FSIA generally provides that “[t]he district courts shall have original jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign state as defined in section 1603(a) of this title.” And the FSIA makes clear that a “foreign state” is not limited to countries, but includes “a political subdivision of a foreign state or an agency or instrumentality of a foreign state.” Such agencies or instrumentalities include foreign corporations where a majority of the

United States Supreme Court to grant review and consider resolving that split.The Supreme Court’s decision, expected later this year, is likely to have significant ramifications regarding U.S. authority to prosecute foreign sovereigns and their instrumentalities.IntroductionThe Supreme Court of the United States is set to determine whether the United States can prosecute a commercial bank, which is majority-owned by the Republic of Turkey, for allegedly violating U.S. law. In 2019, U.S. federal prosecutors indicted Turkiye Halk Bankasi A.S. (“Halkbank”) for allegedly participating in a multi-billion dollar money-laundering scheme with Iranian and Turkish affiliates to evade U.S. sanctions against Iran.The parties present several key issues for the Court to consider: (1) whether federal courts have subject matter jurisdiction over criminal prosecutions of foreign sovereigns and their instrumentalities (or state-owned entities) under the general grant of federal criminal jurisdiction at 18 U.S.C. § 3231; (2) if so, whether (or how) the Foreign Sovereign Immunities Act (“FSIA”) limits that general grant of criminal jurisdiction as applied to instrumentalities of foreign states; (3) if the FSIA limits a federal court’s jurisdiction over a state-owned entity (i.e., makes them immune from criminal prosecution), whether the FSIA’s statutory exceptions to sovereign immunity apply in the criminal context; and (4) if the FSIA’s exceptions to sovereign immunity apply in criminal cases, whether the “commercial activity” exception applies in these specific circumstances.This case concerns the immunity potentially applicable to entities only; it does not concern questions of immunity relating to individual persons.This case has garnered international attention, particularly in light of the increasing significance of sanctions as a U.S. foreign policy and national security tool. As explained below, the Court’s ruling could have a monumental impact on how foreign sovereigns and their state-owned e

On April 19, 2023, the U.S. Supreme Court decided Turkiye Halk Bankasi A.S., aka Halkbank v. United States, holding that the district court has jurisdiction under 18 U.S.C. § 3231 over the prosecution of Halkbank and that the Foreign Sovereign Immunities Act (FSIA) does not provide immunity from criminal prosecution.Halkbank is a bank owned by the Republic of Turkey. The United States indicted Halkbank for conspiring to evade the U.S. economic sanctions against Iran. Halkbank argued that the indictment should be dismissed because the general federal jurisdiction statute, 18 U.S.C. § 3231, does not extend to prosecutions of instrumentalities of foreign states, such as Halkbank. Alternatively, Halkbank argued that the Foreign Sovereign Immunities Act of 1976 provides instrumentalities of foreign states, such as Halkbank, absolute immunity.The district court rejected Halkbank’s position, reasoning that the FSIA does not grant immunity to criminal proceedings. Halkbank filed an interlocutory appeal, and the U.S. Court of Appeals for the Second Circuit affirmed. It held that the district court has subject matter jurisdiction over the prosecution. The court also assu

cessfully crossed that threshold, albeit over the dissenting jurisdictional views of Justices Thomas, Alito, and Gorsuch. A significant number of readers of this blog defend Section 1983 cases, and so should take notice ofReed v. Goertzand its holding with respect to timeliness and standing.Justice Kavanaugh continued his majority authorial run with his opinion inTurkiye Halk Bankasi A.S., AKA Halkbank v. United States, in which he was joined by the Chief Justice and Justices Thomas, Sotomayor, Kagan, Barrett, and Jackson, with Justices Gorsuch and Alito concurring in part and dissenting in part.Halkbank, a bank owned by the Republic of Turkey, was indicted for conspiring to evade U.S. economic sanctions against Iran. In moving to dismiss, Halkbank argued that, as an instrumentality of a foreign state, it was immune from criminal prosecution under the Foreign Sovereign Immunities Act of 1976 (FSIA). Rejecting that argument, the Court held that the district court has jurisdiction under 18 U.S.C. §3231, which grants original jurisdiction as to “all offenses against the laws of the United States.” Although it was conceded that the statute’s literal text encompasses the charged offenses, Halkbank instead argued that because §3231 does not mention foreign states or their instrumentalities, they are implicitly excluded. The Court refused to create an extra-textual limitation on the basis of scattered express references to foreign states and instrumentalities in unrelated statutory provisions.In sum, the FSIA’s comprehensive scheme governing claims of immunity in civil actions against foreign states and their instrumentalities does not cover criminal cases. Rejecting various other procedural contentions, Halkbank ultimately argued that criminal prosecutions like this one might adversely affect national security and foreign policy. The Court responded that, if that were to prove the case, Congress and the President are able to respond. In the end, the case came down to the point, consiste

[authors: Richard Gregorie, William Marguardt, and Arnold Castillo]IntroductionThe COVID-19 pandemic has collided with the constitutional requirement that “infamous” crimes be charged by a grand jury. For the first time in United States history, grand juries in federal courts have been suspended because of the pandemic.[i] This has resulted in a significant controversy arising before federal courts across the country including two contradictory opinions in the Southern District of Florida:U.S. v. B.G.G., Case No. 20-80063-cr-MiddlebrooksU.S. v. Lauren Rosecan, Case No. 20-cr-80052-RuizThis paper will focus on the conflict that these two cases present to illustrate the dilemma that federal prosecutors are facing due to the suspension of grand juries, which has resulted in the inability to secure indictments and prosecutors filing criminal informations. We will explore the arguments that arise out of the application of the statute of limitations, 18 USC § 3231-3301, the Federal Rules of Criminal Procedure – Rule 6 and 7, Supreme Court decisions going back to 1885, and the Fifth Amendment of the U.S. Constitution.Brief History and Purpose of the Grand JuryThe first sentence of the Fifth Amendment reads, in part, as follows:“No person shall be held to answer for a capital or otherwise infamous crime unless on a presentment or indictment of a Grand Jury…”The grand jury has stood between the prosecutor and the accused as the sole protection against a “hasty, malicious, and oppressive prosecution” for centuries.[ii] In 1734, New York publisher, Peter Zenger, was charged by the King’s New York Governor with seditious libel. The case was brought before two colonial grand juries which, one after the other, refused to indict Zenger. The Governor then brought Zenger to trial on an information, a charging instrument issued by the prosecutor alone. Zenger sat in jail for over a year before he was tried and acquitted. It was this case that led to George Maso

over “any nonjury civil action against a foreign state.”However, the FSIA contains an apparent lacuna with respect to criminal prosecutions. Elsewhere the U.S. Code endows the federal district courts with original jurisdiction of “all offenses against the laws of the United States.” In Halkbank, the Supreme Court will have to determine whether the plenary grant of criminal jurisdiction trumps the FSIA or whether the FSIA adequately carves out foreign states from criminal prosecutions as it does for civil suits.Halkbank argued for the latter. The Second Circuit disagreed. It sidestepped the question of whether the FSIA applied at all in a criminal prosecution, and instead, assuming that it did, held that Halkbank’s conduct was “commercial activity” and thus actionable in either the civil or criminal contexts. The Supreme Court granted certiorari to hear Halkbank’s appeal.Does the FSIA govern criminal prosecutions?Halkbank’s appeal rests on three primary arguments. First, it argues that 18 U.S.C. § 3231 - the general criminal jurisdiction statute identified above - does not apply to foreign states at all. Congress enacted that statute as part of the Judiciary Act of 1789 at a time when foreign sovereigns held absolute immunity in both civil and criminal proceedings. The Government has never before construed that statute to apply against a foreign state. Second, the later-in-time FSIA by its terms only applies in civil cases. The statute’s detailed provisions regarding civil cases, which also touch upon service of process, pre-judgment attachment, execution against assets, and other accompaniments of civil suits, only serve to confirm that foreign sovereigns enjoy absolute immunity in the criminal context. Third and finally, even if the FSIA’s civil exceptions applied in the criminal context, Halkbank’s relevant conduct was too geographically remote from the United States to meet the requirements of the commercial activity exception and thus warrant prosecution.The Government, in cont

t used in connection with the specific “act of international terrorism” that injured the plaintiff may be liable for aiding and abetting under Section 2333.In re Grand Jury, No. 21-1397: In this case, the United States sought to compel compliance with two grand-jury subpoenas. The recipients objected, arguing the information sought was protected by the attorney-client privilege. The question presented is: Whether a communication involving both legal and non-legal advice is protected by attorney-client privilege where obtaining or providing legal advice was one of the significant purposes behind the communication.Turkiye Halk Bankasi A.S. v. United States, No. 21-1450: This case concerns the federal government’s prosecution of a Turkish state-backed lender for allegedly helping Iran evade U.S. sanctions. The question presented is: Whether U.S. district courts may exercise subject-matter jurisdiction over criminal prosecutions against foreign sovereigns and their instrumentalities under 18 U.S.C. § 3231 and in light of the Foreign Sovereign Immunities Act.Glacier Northwest, Inc. v. International Brotherhood of Teamsters Local Union No. 174, No. 21-1449: This case concerns the preemptive force of federal labor law. The question presented is: Does the National Labor Relations Act impliedly preempt a state tort claim against a union for intentionally destroying an employer’s property in the course of a labor dispute?Financial Oversight & Management Board for Puerto Rico, v. Centro de Periodismo Investigativo, Inc., No. 22-96: This case concerns federal jurisdiction over claims against the Financial Oversight and Management Board for Puerto Rico arising from the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA). The question presented is: Does PROMESA’s general grant of jurisdiction to the federal courts over claims against the Board and claims otherwise arising under PROMESA abrogate the Board’s sovereign immunity with respect to all federal and territorial claims?

The judge reasoned that admiralty jurisdiction is not available because Table Rock Lake, where the incident occurred, is not "navigable in fact." While the judge acknowledge federal statute 18 U.S.C. § 3231 authorizes the court to preside over any charged offense against U.S. laws, the judge rejected the government's argument, stating that the prescriptive reach of the statute is defined by admiralty law because the statutes do not define the standard directly.In the Eighth Circuit, the appellate court overseeing Missouri, the test for admiralty jurisdiction is whether the waterbody is "navigable in fact." This is significant because, in contrast, the congressional regulatory standard for navigability is merely "historical navigability" – a much lower burden.

Federal courts, as courts of limited jurisdiction, have subject matter jurisdiction only where Congress has explicitly conferred it. Jurisdiction over federal criminal prosecutions is granted to federal courts pursuant to 18 U.S.C. § 3231, and jurisdiction is vested in the courts when a proper indictment is filed. Balde’s argument that the deficiency in the indictment stripped the district court of jurisdiction is significant because, generally, a defendant who has pled guilty waives all challenges to his conviction except those going to the court’s jurisdiction.