May 7 (Reuters) - Turkey's state-controlled Halkbank

asked the U.S. Supreme Court to throw out a lower

court ruling saying it could be prosecuted on criminal charges

it helped Iran evade American sanctions.

In a petition posted this week on the Supreme Court's

website, Halkbank said it was entitled to "absolute immunity"

under the common law because the sovereign immunity that

countries have extends to their instrumentalities.

Halkbank pleaded not guilty to fraud, money laundering and

conspiracy charges over its alleged use of money servicers and

front companies in Iran, Turkey and the United Arab Emirates to

evade sanctions.

Prosecutors said Halkbank helped Iran secretly transfer $20

billion of restricted funds, and helped launder money through

the U.S. financial system.

In October, the federal appeals court in Manhattan decided

that Halkbank could be prosecuted.

"The decision below thus authorizes the first criminal trial

of a foreign sovereign instrumentality in world history,"

Halkbank said in its Supreme Court petition.

Halkbank also said the decision exposed U.S. agencies such

as the Navy, CIA and Export-Import Bank to possible criminal

prosecution outside the country, and it was "only a matter of

time" before other sovereigns targeted their diplomatic

adversaries.

The case began in 2019, and is making its second trip to the

Supreme Court.

In 2023, the court said Halkbank wasn't shielded from

prosecution under the federal Foreign Sovereign Immunities Act

of 1976, but left open whether the bank deserved immunity under

the common law, based on court decisions rather than statutes.

The Supreme Court may not decide until its term beginning in

October whether to hear Halkbank's appeal.

Halkbank said it is 91.49% owned by the Turkish Wealth Fund,

which is owned by Turkey.

The case has been a thorn in U.S.-Turkey relations, with

Turkish President Tayyip Erdogan calling it an "unlawful, ugly"

step.

The case is Turkiye Halk Bankasi AS v. United States, U.S.

Supreme Court, No. 24-1144.