Hakan Atilla found guilty, worst-case scenarios operative

TURKEY - In Brief 03 Jan 2018 by Atilla Yesilada

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A jury found a former VP of state-owned lender Halkbank, Mr. Hakan Atilla, guilty on 5 charges, including bank fraud and conspiracy to violate U.S. sanctions law. Judge Richard Berman scheduled Atilla to be sentenced on April 11. He may face 30 years in prison, or more. His lawyers will appeal the verdict. The verdict, if not overturned on appeal, could have significant ramifications on the already troubled Turkey-U.S. relations, as well as the banking system. I urge readers to follow the developments very closely to assess the potential damage. For an excellent background of the case, visit the link, which is an article published in NYT on Thursday. However I assume my readership has sufficient familiarity with the case to skip a discussion of the background to move to predictions. Banking system The case now goes to the Treasury Department, according to the limited commentary available in the press this morning. I confess that I need to study the process more thoroughly. Yet, Turkish commentators seem reconciled to large penalties for Halkbank. Some sources had mentioned bans on certain activities for Halkbank, as well, while other claim Ziraat and Vakif (other state banks mentioned in the trial) might also be added to the sanctions list. I hate to speculate on an important event like this, but basically the charges are so grave (essentially implicating the current president of Turkey) that one may say “sky is the limit” as far as the magnitude and scope of potential sanctions go. It will probably be a political decision how far and how wide to pursue this case against Turkey. On the Turkish side, while some hot heads recommended refusing to pay potential fines, I be...