Countering America’s Adversaries Through Sanctions Act (CAATSA)

In News

• Key lawmakers continue to voice their support for a sanctions waiver for India for its purchase of the S-400 missile defence system from Russia.

What is the issue?

• India is likely to begin taking delivery of the S-400 in November 2021. 
  • It would potentially activate U.S. sanctions under Countering America’s Adversaries Through Sanctions Act (CAATSA). 

Countering America’s Adversaries Through Sanctions Act

• CAATSA is a United States federal law that imposed sanctions on 
  • Iran, North Korea, and Russia.
• The Act empowers the US President to impose at least five of the 12 listed sanctions on persons engaged in 
  • A “significant transaction” with the Russian defence and intelligence sectors.
• Its goal is to prevent revenue from flowing to the Russian Government.

• 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 license 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.

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

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. 

Source: TH