The US House of Representatives has passed by voice vote a legislative amendment that approves waiver to India against the CAATSA sanctions for its purchase of the S-400 missile defence system from Russia to help deter aggressors like China.

Countering America’s Adversaries Through Sanctions Act (CAATSA) is a tough US law that authorises the US administration to impose sanctions on countries that purchase major defence hardware from Russia in response to Russia’s annexation of Crimea in 2014 and its alleged meddling in the 2016 US presidential elections.

The legislative amendment was passed on July 14 as part of an en bloc (all together as a single unit) amendment during floor consideration of the National Defence Authorisation Act (NDAA).

What is the CAATSA?

• On August 2, 2017, US President Donald Trump signed into law the “Countering America’s Adversaries Through Sanctions Act” (CAATSA), which among other things, imposes sanctions on Iran, Russia and North Korea.  

• Under the CAATSA, the US can impose sanctions on any country carrying out significant defence and energy trade with sanctioned entities in Russia, Iran and North Korea.

• The CAATSA requires the US president to select at least five of 12 possible sanctions on countries in violation. The 12 options range from mild to harsh and can target people or entities:

1) Sanction US Export-Import Bank credit or assistance.

2) Sanction US exports of goods and services.

3) Sanction large loans from US financial institutions.

4) Seek to block loans from international financial institutions including the World Bank and International Monetary Fund.

5) Sanctions on financial institutions holding US government funds or serving as US primary dealer.

6) Sanction US procurement of goods or services.

7) Sanction any foreign-exchange transactions under US jurisdiction.

8) Sanction any bank payments or transfers subject to US jurisdiction.

9) Sanction any transactions related to property.

10) Sanction any investment in US debt or equity.

11) Deny visas to corporate officers related to sanctioned entity or person.

12) Sanctions on principal executive officers of targeted entity or person.

• In December 2020, the US imposed sanctions on Turkey for procuring the S-400 surface-to-air missile system from Russia.

The Russian deal and its after-effect

• In October 2018, India and Russia formally inked the $5.2 billion deal for the S-400 missile system, despite a warning from the then-Trump administration that going ahead with the contract may invite US sanctions.

• The S-400 Triumf is an advanced surface-to-air missile system, developed by Russia’s state-owned company Almaz-Antey, and can shoot down hostile aircraft and ballistic missiles. It has an estimated range of 250 km and a possible upgrade is speculated to extend it to 400 km. 

• China was the first foreign buyer to seal a government-to-government deal with Russia in 2014 to procure the lethal missile system. 

• Following the US sanctions on Turkey over the procurement of S-400 missile systems, there were apprehensions that Washington may impose similar punitive measures on India.

• The ministry of external affairs has said that India was pursuing an independent foreign policy and its defence acquisitions are guided by its national security interests.

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