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Turkey, U.S. Discussed Return Of Jailed Halkbank Executive -Turkey Foreign Minister

Mehmet Hakan Atilla, a deputy general manager of Turkey's Halkbank
Mehmet Hakan Atilla, a deputy general manager of Turkey's Halkbank

Turkey and the United States have discussed returning a jailed executive from state-owned lender Halkbank to Turkey where he can serve the rest of his sentence from an Iran sanctions-busting case, Foreign Minister Mevlut Cavusoglu said on Tuesday.

In May, a U.S. court jailed Hakan Atilla, an executive from Halkbank, to 32 months in prison for helping Tehran get around U.S. sanctions, in a case that has strained already tense ties between the NATO allies.

Halkbank has since faced potential U.S. fines in relation to the case, while the U.S. Treasury is also considering a fine against the bank.

Speaking to reporters following talks with U.S. Secretary of State Mike Pompeo in Washington, Cavusoglu said Halkbank had not violated any U.S. sanctions, adding that he had discussed what steps could be taken in the case during his talks.

"There is also the situation of Hakan Atilla being sent to Turkey. As part of bilateral agreements, he can serve the rest of his sentence in Turkey. We also evaluated what could be done on this issue," Cavusoglu said.

Halkbank denies any wrongdoing and President Tayyip Erdogan has condemned the case as a political attack against his government, while his son-in-law, Finance Minister Berat Albayrak, said he did not expect the bank to face a fine.

Erdogan has said he has discussed Halkbank's case with U.S. President Donald Trump, saying the talks were on a "positive path."

He said earlier this month that Trump had told him "he would instruct the relevant ministers immediately" regarding the Halkbank case, without elaborating.

However, Cavusoglu warned on Tuesday that if Washington did not end legal proceedings against Halkbank, they would be considered "politically motivated."

"Since there was no evidence - and the jury couldn't prove it either - these proceedings need to be stopped. Otherwise they will be politically motivated," he said.

Turkey has accused the United States of waging an economic war against it amid a currency crisis that saw the lira currency plunge more than 40 percent this year.

Strained ties between Ankara and Washington began to improve after U.S. pastor Andrew Brunson, who was on trial over terror-related charges in Turkey, was released last month.

The NATO allies remain divided on a host of other issues, including U.S. policy in Syria and Turkey's request for the United States to extradite Fethullah Gulen, a cleric Ankara blames for organizing the 2016 abortive putsch. Gulen denies involvement.

Cavusoglu said on Tuesday that the Halkbank case was a plot by Gulen, who has lived in self-imposed exile in Pennsylvania since 1999, against Turkey.

(Reporting by Humeyra Pamuk in Washington, Tuvan Gumrukcu in Ankara; editing by Clive McKeef and James Dalgleish)