U.S. WARNS ALLIES OF SANCTIONS RISK

Why in News?

  • The U.S. officials have warned India that with the decision to go ahead with the purchase of the Russian S-400 missile defence system, India may risk sanctions.

Background:

  • India had agreed to purchase the surface-to-air missile system (S-400 missile defence system) from Russia in 2018 for about $5.2 billion, risking sanctions under the 2017 U.S. CAATSA law.Sanctions could kick in when the first payment for the equipment is made unless the U.S. President grants a waiver.
  • S. government officials have repeatedly asserted, in the Indian context, that countries should not assume that waivers are automatic.

Highlights:

  • The S-400 ‘Triumf’ is the most advanced long-range air defense missile system that went into service in Russia in 2007.It is designed to destroy aircraft, cruise and ballistic missiles, including medium-range missiles, and can also be used against ground installations.The S-400 can engage targets at a distance of 400 km and at an altitude of up to 30 km.
  • Russia has also signed the contracts for the delivery of these systems with China (the first customer) and Turkey.
  • The U.S. has urged all their partners to forgo transactions with Russia that risk triggering sanctions under the Countering America’s Adversaries Through Sanctions Act (CAATSA).

CAATSA:

  • CAATSA, Enacted on August 2, 2017, aims to counter the aggression by Iran, Russia and North Korea through punitive measures.
  • The Act deals with sanctions on Russian interests such as its oil and gas industry, defence and security sector, and financial institutions, in the backdrop of its military intervention in Ukraine and its alleged meddling in the 2016 US Presidential elections.
  • The Act empowers the US President to impose at least five of the 12 listed sanctions on persons engaged in a “significant transaction” with Russian defence and intelligence sectors.
  • Two of the most stringent of these sanctions are the export licence restriction by which the US President is authorised to suspend export licences related to munitions, dual-use and nuclear-related items; and the ban on American investment in equity/debt of the sanctioned person.
  • The extent to which CAATSA would affect Indo-US defence relations will depend on what sanctions, if any, Washington decides to impose on New Delhi in view of India’s continued defence cooperation with Russia.
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