Halkbank pleaded not guilty to bank fraud, money laundering and conspiracy. The case became a thorn in U.S.-Turkey relations, with Turkish President Tayyip Erdogan calling the U.S. charges an "unlawful, ugly" step.

An appeals court ruled that the state-owned lender, accused of helping Iran evade sanctions, isn’t entitled to sovereign immunity.

A U.S. appeals court on Tuesday said the federal government may prosecute Turkey's Halkbank on charges it helped Iran evade American sanctions, rejecting the state-owned lender's argument that it deserved immunity.

Turkey’s state-owned Halkbank can be prosecuted for conspiring to violate US sanctions against Iran, a federal appeals court ruled.

Halkbank, a major bank in Turkey that is owned by the government, is facing legal trouble in the United States. U.S. prosecutors have accused the bank of secretly helping Iran get around tough U.S. sanctions that were put in place to limit Iran’s access to money.