CAATSA ( Countering America’s Adversaries Through Sanctions Act, 2017), is an act through which USA seeks to constrain its enemies power economically. Through this USA imposes economic sanctions on its adversaries and all countries and firms dealing with its adversaries.
So, under CAATSA, 3 Countries have been declared adversaries under USA :-
And these countries have been placed under primary sanctions. On the other hand, the countries that deals with the above mentioned countries especially in Defence and Strategic areas, they are placed under secondary sanctions.
USA said that country like India will risk inviting sanctions under CAATSA Legislation, if they proceed with Defence deals with Russia, the recent one being S – 400 Missile deal with Russia.
The S – 400 Missile Deal is known as Russia’s most advanced long – range surface – to – air missile defence system, capable of destroying hostile strategic bombers, jets, missiles and drones at a range of 380 km. Last year, India and Russia signed a 500 billion deal for it but lately it seems to run into trouble for India inviting secondary sanctions under CAATSA Legislation.
Now, for months Senior Officials and Leaders are trying to seek waiver from sanctions. But, USA State Department has clarified that there won’t be any automatic waiver for countries like India and eventually, India will be running into inviting secondary sanctions if they proceed with the deal with Russia. However, India has claimed to proceed with the deal, despite threats and hopes that USA will help in securing one live waiver for missile deal. Also, India has stressed that India would reduce defence purchase from Russia and take it to a new height with USA.
On a day when External Affairs Minister, S. Jai Shankar said he was “reasonably convinced” of persuading the USA to accept India’s decision on the purchase of the Russian S – 400 Missile Defence System, USA Officials has warned that any purchase might risk sanctions.
They said, “we urge all our allies and partners to forgo transactions with Russia that risk triggering sanctions under the Countering America’s Adversaries Through Sanctions Act (CAATSA). Thus, sanctions could kick in when the first payment for the equipment is made, unless the USA President grants the waiver.
Also, considering the economic might of USA, it is a big challenge for any nation to overlook USA and continue trade links with other partners.
Presently, India is in a very crucial position because it could neither dare USA Sanctions nor forgo Suppliers, as India has a strong critical trade ties with Iran and Russia for over last 6 decades. Iran has been India’s second largest oil supplier, whereas Russia has forever been India’s major defense supplier. Curtailing Defence ties with Russia would effect India’s capability within the Quad Coalition ( Asia – Pacific Security Bloc that has Japan, Australia, India and the U.S.A.). There are risks arising of sanctions against energy trade with Iran.
The Congressional Committee set up, seems to be relented as the need for waivers to some country was recognized. This Committee has also proposed amendments to CAATSA, in order to allow the President to waive sanction in certain circumstances for six months at a time, so that within the given time, India could continue trade with Russia. But, the unpredictable policy change by U.S.A. has proved to be not a good sign as a future look.
It is not a smart move by USA, because if sanction gets imposed on India, it is definitely going to cause anti – USA public sentiments.
But, on a global level if we see, USA is in lose position in terms of trade, and they feel the need to buckle it up.