Countering America’s Adversaries through Sanctions Act (CAATSA)

In News

Recently, US Democratic Representative stated that the US government must not impose sanctions on India under the Countering America’s Adversaries through Sanctions Act (CAATSA) for its purchase of the S-400 missile weapons system from Russia.

Key Points

• The Chinese aggression at Indian borders outline India’s need for import of S-400 from Russia.
• In the past, other American lawmakers have demanded India should not be sanctioned. 
  • Negatively affecting relations: If the Joe Biden administration imposes sanctions on India, it would undermine their relations and also affect the Quadrilateral Security Dialogue (QUAD), the strategic security grouping of the US, Japan, Australia, and India that is billed as a network of democracies in the Indo-Pacific region.

Image Courtesy: ToI 

What is the CAATSA?

• Origin: 
  • It is a law that came into effect in the US in 2017.
• Objective: 
  • It is meant to punish countries having deep engagements with Russia, North Korea, and Iran using economic sanctions. 
    • The US flagged issues of Russia’s alleged interference in the 2016 Presidential elections, and its role in the Syrian war as some of the reasons for punishing engagement with it. 
• Waivers: 
  • Ordinary transactions will not invite sanctions, and the decision of who has sanctions imposed on them comes down to the interpretation of “significant transaction”. 
  • This is one of the various waivers or exemptions mentioned, such as the transaction not affecting US strategic interests, not endangering the alliances it is a part of, etc.
• Section 231 of the law:
  • It notifies 39 Russian entities, including all the major defence companies like Rosoboronexport, Sukhoi Aviation, Russian Aircraft Corporation MiG, transactions with whom could invite sanctions. 
  • Almaz-Antey Air and Space Defence Corporation JSC, who have made the S-400 system, are in this list.
• Sanctions applied:
  • In 2020, Turkey was sanctioned for its purchase of the S-400 system. Turkey had ignored repeated reminders to not go ahead with the purchase, and was, therefore, sanctioned.
• 12 sanctions: It contains 12 types of sanctions. Of these, 2 sanctions may impact India’s relations with either Russia or the US.
• First Sanction:
  • Prohibition of Banking transactions
    • India would not be able to make payments in US Dollars to Russia for the purchase of the S-400 systems.

• Second sanction:
  • Export sanctions 
    • As it will deny the licence for, and export of, any items controlled by the US to the sanctioned person 
    • It has the potential to completely derail the India-US Strategic and Defence partnership.

Could CAATSA apply to India?

• India has purchased the S-400 Triumf missile systems
  • It has advanced capabilities to judge the distance from a target and launch a surface-to-air missile attack. 
  • Five such systems were bought by India in 2018 for US$ 5.5 billion and in November last year, their delivery began. 
  • They were deployed in Punjab.
• However, the application of CAATSA is not limited to the S-400, and may include other joint ventures for manufacturing or developing weapons in the future, or any other kinds of major deals with Russia.
• So why has India not faced CAATSA sanctions yet?
  • The US has never categorically stated whether CAATSA would apply to India. 
  • India is a really important security partner of the US now.
• India’ s stand:
  • India has mentioned the need for the S-400 missiles for its border defence several times in the past.
  • With the ongoing conflict in Ukraine and the US hardening its stance against Russia, India has continued its neutrality and not joined any of the sanctions against Russia imposed by Western countries. 
  • India has always pursued an independent foreign policy. This also applies to the country’s defence acquisitions and supplies which are guided by our national security interests.
• Concerns for India:
  • Could impact joint ventures
    • Like Indo Russian Aviation Ltd, Multi-Role Transport Aircraft Ltd and Brahmos Aerospace. 
  • Russian Origin Weapon Systems
    • It will also affect India’s purchase of spare parts, components, raw materials and other assistance.
    • India is using a large number of Russian developed Defence equipment like
      • Nuclear submarine INS Chakra, 
      • Kilo-class conventional submarine, 
      • Brahmos cruise missile, 
      • MiG 21/27/29 and Su-30 MKI fighters, 
      • Mi-series of helicopters, and 
      • Vikramaditya aircraft carrier

• Issues Highlighted by other countries 
  • EU countries such as France and Germany that had even more significant ties with Russia for oil and gas supply before the Ukraine-Russia conflict in 2022, had also criticised CAATSA. 

• France’s foreign ministry said the new policy seemed “at odds with international law due to the extra-territorial reach.

Way Ahead

• CAATSA Waiver
  • Criteria: The USA President was given the authority in 2018 to waive CAATSA sanctions on a case-by-case basis.
  • India and the U.S. must keep the dialogue open either at the Congressional level or at the 2+2 level. 
• Strategic Interests 
  • The defence procurement for India has become significant amid deadly clashes with China on the Line of Actual Control (LAC). 
  • Apart from that another hostile neighbour i.e Pakistan also needs to be tackled.
• Balancing foreign relations
  • Russia is an all-weather defence partner of India.
  • Russia facilitated India’s inclusion into SCO and the formation of the RIC doctrine. 
  • However, India needs to balance its relationship with both Russia and USA, so that its national interest is not compromised.
• Building a peaceful world order 
  • India today is in a unique position to have a favourable relation with all great powers.
  • Thus, India must leverage this position to help in building a peaceful world order. 
• Supporting each other: 
  • The US should take additional steps to encourage India to accelerate India’s transition of Russian-built weapons and defence systems while strongly supporting India’s immediate defence needs.

Source: IE