The US Justice Department has moved to dismiss the long-running criminal case against Turkiye Halk Bankasi AS, resolving a major diplomatic irritant ahead of President Trump's July visit to Ankara. The Turkish state lender faced charges of helping Iran evade sanctions through approximately $20 billion in restricted transactions, allegations the bank consistently denied. Halkbank shares jumped 3.9% at the Istanbul market open, signaling investor relief over the potential resolution.

The case represented one of the most contentious issues between NATO allies, with tensions escalating after Turkey's 2019 acquisition of Russian S-400 missile systems. Washington responded by removing Turkey from the F-35 fighter jet program and imposing sanctions, measures that strained bilateral defense cooperation. Turkish President Erdogan raised the Halkbank matter directly with Trump during their September White House meeting, expressing expectations for a swift resolution.

This diplomatic breakthrough comes as both nations seek to reset relations amid ongoing conflicts in Ukraine and Iran. The timing suggests strategic coordination ahead of the NATO summit in Ankara, where Trump will hold extensive talks with Erdogan. US Ambassador Tom Barrack has repeatedly emphasized that Turkey's removal of Russian defense systems could facilitate its return to the F-35 program.

The resolution removes a significant barrier to deeper US-Turkey military and economic cooperation, potentially paving the way for renewed defense partnerships as both countries navigate regional security challenges. Halkbank's stock surge reflects market confidence that the bank can now pursue international expansion without legal overhang.