In 2019, the United States indicted Turkiye Halk Bankasi (Halkbank), a Turkish state-owned bank, alleging a multiyear scheme to evade US sanctions against Iran by using fraudulent transactions to transfer the proceeds of oil and gas sales to Iran. This chapter evaluates the charges against Halkbank under both US domestic law and customary international law. After briefly reviewing the charges against Halkbank and the US district court’s analysis of the extraterritoriality questions, the chapter considers the application of the US presumption against extraterritoriality, concluding that all the charges except for the bank fraud charges survive this analysis. The conclusion with respect to customary international law, however, is quite different. Under customary international law, the United States lacks jurisdiction to prescribe when its only connection to the foreign defendant is the clearing of transactions through banks in the United States. Because the International Emergency Economic Powers Act authorizes sanctions on financial transactions only when the person or property is subject to the jurisdiction of the United States, the sanctions regulations cannot lawfully be applied to Halkbank.

Chapter 5 focuses on Turkey’s energy policies in the context of the country’s relations with the West. It provides case studies of Turkey’s rejection of full membership status in the Energy Community Treaty (ECT), the reinstating of the Turkish Stream pipeline project with Russia, and Turkey’s refusal to implement the renewed sanctions against Iran. It makes a case that through rejecting its full membership into the Energy Community Treaty without its full accession into the EU and the revived Turkish Stream project with Russia, Turkey engages in challenging the boundaries of its partnership with the EU in the energy sector, using informed strategic noncooperation, cooperative balancing with Russia, and economic statecraft. Turkey has been signaling to the EU that it can undertake alternative projects to the Southern Gas Corridor project, a project of strategic importance for the EU, which would help EU decrease its dependency on Russia. The chapter further illustrates Turkey's boundary breaking against the USA through the evasion of Iran sanctions from 2010 to 2015 and the announcement of its unwillingness to implement the renewed sanctions against Iran.