EXPLAINED: AMERICA’S CAATSA LAW AND THE WAIVER THAT THE US HOUSE HAS PASSED FOR INDIA

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CAATSA, which was signed into a federal law in 2017, allows the United States to punish countries that carry out ‘significant transactions with Iran, North Korea and Russia’. India’s purchase of the S-400 defence system from Russia had raised fears that it would be sanctioned under this legislation

India’s diplomacy and defence procurement scored a big win on Friday when the US House of Representatives passed an amendment that approves a waiver to India against the punitive CAATSA sanctions for its purchase of the S-400 missile defence system from Russia.

The amendment, authored and introduced by Indian-American Congressman Ro Khanna, received an astounding majority of 330 to 99 and now awaits passage in the Senate.

“The United States must stand with India in the face of escalating aggression from China. As Vice Chair of the India Caucus, I have been working to strengthen the partnership between our countries and ensure that India can defend itself along the Indian Chinese border,” said Khanna, the US representative from California’s 17th congressional district.

“This amendment is of the utmost importance, and I am proud to see it pass the House on a bipartisan basis,” he said.

He added that the waiver of CAATSA sanctions is in the best interests of United States and the United States-India defence partnership.

The issue has been looming over India since October 2018 when New Delhi signed a $500 billion deal with Russia to buy five units of the S-400 air defence missile systems — known to be Russia’s most advanced long-range surface-to-air weapon — despite warning from the then Donald Trump administration that such a deal would invited US sanctions.

Earlier, other American lawmakers had extended their support to India, saying the nation should not be sanction. In March, top Republican Senator Ted Cruz had said, “There are reports that the Biden administration is contemplating imposing CAATSA sanctions against India, the largest democracy on Earth, a decision that I think would be extraordinarily foolhardy.”

In April 2021, Republican Senator Todd Young, a member of the Senate Foreign Relations Committee, wrote that 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.

Here’s a brief examination of what exactly is CAATSA, what are the consequences if India is sanctioned and much more.

What’s CAATSA?

First off, CAATSA, as is popularly known, is the Countering America’s Adversaries through Sanctions Act is a federal law.

It was signed into law on 2 August 2017, by then President Donald Trump. CAATSA was passed by the Senate on 27 July 2017, 98–2 and the House 419–3.

Under this law, the American government can impose sanctions on any country that has “significant transactions with Iran, North Korea or Russia”. The law entails economic and financial penalties for any nation that transacts with Russia on arms.

Section 231 of the law has outlined 39 Russian entities that are on the list, which invites sanctions. They include major defence firms like Rosoboronexport, Sukhoi Aviation, Russian Aircraft Corporation MiG, as well as Almaz-Antey Air and Space Defence Corporation JSC, who have made the S-400 system.

While signing the bill into law, Donald Trump had called it “seriously flawed” and said it “encroaches on the executive branch’s authority to negotiate”.

Why Was CAATSA Created?

The idea behind CAATSA was to punish Russia for the Crimean annexation in 2014 and its alleged role in the 2016 US presidential election.

The sanctions are intended to economically hurt Russia over its international actions. CAATSA primarily allows the US government punish any country that engages in transactions with Russian defence and intelligence sectors.

Has US Imposed CAATSA On A Country?

In December 2020, the United States announced that it was imposing sanctions on NATO-ally Turkey for its purchase of Russia’s S-400 missile defence system.

Then Secretary of State Mike Pompeo had said, “Today’s action sends a clear signal that the United States will fully implement CAATSA Section 231 and will not tolerate significant transactions with Russia’s defence and intelligence sectors.”

Sanctions were imposed on Turkey’s main defence procurement agency the Presidency of Defence Industries (SSB) for “knowingly engaging in a significant transaction with Rosoboronexport (ROE), Russia’s main arms export entity” the office of the US State Department spokesperson said in a statement.

The sanctions on Turkey raised apprehensions that Washington would impose similar punitive measures on India.

In 2021, the US levied CAATSA sanctions on China’s Equipment Development Department (EDD) of China’s Ministry of Defence for its purchase of 10 SU-35 Russian combat aircraft in 2017 and S-400 equipment in 2018.

Why Hasn’t US Imposed CAATSA On India Yet?

While the issue has been looming since India’s purchase of the S-400, the US never stated that it would apply to India. In March 2022, it was reported that President Biden was yet to decide on the matter.

The decision on CAATSA for India is a tricky one — India-US relations have been on the upswing for the past two decades, especially in the area of defence where trade has surpassed the $20 billion mark and is only likely to further increase.

Furthermore, the US sees India as an important ally in its fight against China. If sanctioned, the Quad collective, of which India is part, could be significantly impacted.

How Has New Delhi Responded?

On the possibility of being sanctioned for its S-400 deal with Russia, the Ministry of External Affairs (MEA) has reiterated that New Delhi follows an independent foreign policy and its defence acquisitions are guided by its national security interests.

“India and the US have a comprehensive global strategic partnership and India has a special and privileged strategic partnership with Russia. We also pursue an independent foreign policy. This applies to our defence acquisition and supplies which are guided by our national security interests,” MEA spokesperson Arindam Bagchi had said in November 2021 when asked to comment on India’s position on the matter.

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