A federal judge in Manhattan on Wednesday granted a 90-day pause in the criminal case against Turkey’s state-run Halkbank, a first step toward a possible dismissal of charges that the bank helped launder billions of dollars in Iranian oil and gas proceeds, according to The New York Times.

Under a tentative deferred prosecution agreement (DPA) between the U.S. Justice Department and Halkbank, the lender must undergo an independent review to show it is no longer evading U.S. sanctions or anti-money-laundering laws and that it has internal controls in place to prevent future violations. If it passes that review, prosecutors plan to ask the court to dismiss the 2019 indictment, the newspaper said. 

The agreement, disclosed in court papers unsealed Monday, would resolve a long-running case that strained relations between Washington and Ankara and raised concerns about political interference during President Donald Trump’s first term, according to the report. 

Halkbank has been accused of helping Iran gain access to about $20 billion in oil and gas revenue in a multiyear scheme designed to evade U.S. sanctions, the newspaper said. The indictment also alleged tens of millions of dollars in bribes to senior officials in Iran and Turkey and ties to gold trader Reza Zarrab.

Federal prosecutors told the court that the proposed DPA served U.S. national security and foreign policy interests. In a letter to Judge Richard Berman, the U.S. attorney’s office in Manhattan said the agreement furthered America’s “compelling interests in combating terrorist financing and financial support for the government of Iran,” according to the NYT.

The government said Turkey merited leniency because of its role in negotiations following the Hamas-led attack on Israel in 2023, including efforts to secure the release of hostages and help bring about a cease-fire in the war that followed, the NYT said. Prosecutors cited “unique and extraordinary national security and foreign policy considerations,” particularly high-level diplomatic discussions between the United States and Turkey.

Read more at The New York Times