Turkey-Cuba: In Exxon Mobil Libertad Act Lawsuit, Cuba Claims Companies Are Government Instrumentalities Thus Shielded By FSIA. Judge In Halkbank Lawsuit Dismisses Similar Argument.

Turkey-Cuba Connectivity: In Exxon Mobil Libertad Act Lawsuit, Cuba Claims Two Companies Are Government Instrumentalities And Shielded By Foreign Sovereign Immunities Act (FSIA).  Judge In Turkey’s Halkbank Lawsuit Dismisses Somewhat Similar Argument. 

“The appeals court said that even if the law “confers sovereign immunity in criminal cases, the offense conduct with which Halkbank is charged falls within FSIA’s commercial activities exception to sovereign immunity.” 

The Trump Administration on 2 May 2019 made operational Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”). Title III authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset.   

The sixteen (16) Republic of Cuba government-operated entities which have been named as a defendant within one or more of the forty-two (42) lawsuits filed since 2019 using Title III of the Libertad Act: 

Corporacion Cimex S.A. (Cuba)
Corporacion Cimex S.A. (Panama)
Corporacion de Comercio Y Turismo Internacional Cubanacan S.A.
Corporacion Habanos S.A.
Empresa Agropecuaria Nuevitas
Empresa Cubana Exportadora De Alimentos Y Productos Varios
Empresa Extrahotelera Palmares S.A.
Empresa Forestal Integral De Camaguey
Grupo de Turismo Gaviota S.A.
Grupo Empresarial Agrícola, Grupo Empresarial Agroforestal
Grupo Empresarial Viajes Cuba
Grupo Hotelero Gran Caribe
Grupo Internacional De Turoperadores Y Agencias De Viajes
Havanatur S.A. (Cuba)
Havanatur S.A. (Panama)
Union Cuba-Petroleo

LINK To Libertad Act Title III Lawsuit Filing Statistics
LINK To Foreign Sovereign Immunities Act Text

LINKS To Relevant Analyses 

Exxon Mobil Responds With 1,452 Pages To Cuba In Libertad Act Lawsuit: FSIA Jurisdiction Is Key September 29, 2020 

Might Jurisdiction Defense By King & Spalding In Turkey’s Halkbank Case Be Instructive For Libertad Act Lawsuits? Exxon Mobil? December 19, 2019

Reuters
London, United Kingdom
22 October 2021

A U.S. appeals court ruled on Friday that state-owned Turkish lender Halkbank (HALKB.IS) can be prosecuted over accusations it helped Iran evade American sanctions.  The 2nd U.S. Circuit Court of Appeals said even if the Foreign Sovereign Immunities Act shielded the bank, the charge against Halkbank falls under the commercial activity exception. Robert Cary, an attorney at Williams & Connolly which represents Halkbank, declined to comment. There was no immediate comment from the Turkish foreign ministry or Halkbank.  

Prosecutors accused Halkbank of converting oil revenue into gold and then cash to benefit Iranian interests and documenting fake food shipments to justify transfers of oil proceeds.  They also said Halkbank helped Iran secretly transfer $20 billion of restricted funds, with at least $1 billion laundered through the U.S. financial system. Halkbank has pleaded not guilty to bank fraud, money laundering and conspiracy charges over its alleged use of money servicers and front companies in Iran, Turkey and the United Arab Emirates to evade sanctions.  The bank had argued it is immune from prosecution under the federal Foreign Sovereign Immunities Act because it was "synonymous" with Turkey, which has immunity under that law.  

The court said Halkbank was conflating its purpose - to act as a repository for the Turkish government's Iranian oil and gas proceeds - with its action, which was a scheme to participate in money laundering.  The appeals court said that even if the law "confers sovereign immunity in criminal cases, the offense conduct with which Halkbank is charged falls within FSIA’s commercial activities exception to sovereign immunity." 

Halkbank had been appealing an Oct. 1 ruling by U.S. District Judge Richard Berman allowing it to be prosecuted.  Berman has overseen several related cases, including the conviction of former Halkbank executive Mehmet Hakan Atilla and a guilty plea by Turkish-Iranian gold trader Reza Zarrab. Halkbank's case has complicated U.S.-Turkish relations, with Turkish President Tayyip Erdogan backing Halkbank's innocence in a 2018 memo to then-U.S. President Donald Trump. The case was decided by Judges Amalya Kearse, Joseph Bianco and Jose Cabranes, who wrote the opinion. The lower court had scheduled a trial to start for May 3, but the proceeding was stayed during the appeal and a new trial has yet to be scheduled.