Countering America’s Adversaries Through Sanctions Act (CAATSA) - Important UPSC Notes!

The Countering America’s Adversaries Through Sanctions Act (CAATSA) is a federal law of the United States under which sanctions are imposed on Iran, North Korea and Russia. This act came into force on 2nd August 2017, during the tenure of former US president Donald Trump. The provisions of CAATSA prohibit US trade partners from entering into any bilateral contracts with these three sanctioned countries.

The topics related to Important laws and initiatives that directly or indirectly influence India's foreign and trade policy are significant for the UPSC exams under the theme of International Relations (GS-2) syllabus. Time and again, factual and analytical questions have been asked related to such topics. This article on CAATSA will help you to prepare for the Prelims and Mains stage of the UPSC IAS/IPS exam.

This article on testbook will discuss in detail the Countering America’s Adversaries Through Sanctions Act (CAATSA) and its recent updates, need, Important sanctions, key features and Powers. We will also learn about the impact of CAATSA on India and the implications of buying Russia's S-400 missile defense system.

Recent Updates on CAATSA

• US exempts India from CAATSA – In July 2022, the US House of Representatives enacted a legislative amendment exempting India from economic sanctions under the Countering America’s Adversaries Through Sanctions Act (CAATSA) for purchasing Russia’s S-400 missile defense system. Indian-American Congressman Ro Khanna proposed this amendment.
• US imposes CAATSA sanctions on Turkey for S-400 Purchase. In 2020, Under Section 231 of the Countering America’s Adversaries Through Sanctions Act (CAATSA), the United States imposed sanctions on Turkey for purchasing Russia’s S-400 missile defense system. These sanctions will include a complete blockade of visas for officials of Turkey’s defense procurement agency.

Countering America’s Adversaries Through Sanctions Act (CAATSA)

• CAATSA is a federal law of the USA that came into force in 2017 to punish countries with deep engagements, especially defense and economics, with Russia, North Korea, and Iran.
• At least five kinds of sanctions can be imposed under CAATSA for significant transactions.
• The Act covers sanctions imposed on Russia’s oil and gas sector, defence and security industry, and financial institutions in retaliation to its military intervention in Ukraine and alleged meddling in the 2016 US presidential elections.

Check out the syllabus, weightage and preparation strategy of International Relations (IR) for the UPSC IAS exam.

What was the need for CAATSA Act?

The need for the CAATSA Act by the US came due to the following primary reasons discussed below:

• To curb the influence of Russia in Geopolitics – The United States of America flagged serious issues of Russia’s alleged interference in its 2016 Presidential elections and its role in the Syrian war and annexation of Crimea in 2014 are some of the reasons for imposing CAATSA on Russia.
• Nuclear Missile Program of Iran – The US government was concerned that any advancement in Iran’s nuclear missile programme would further destabilize the region of the Middle East, as Iran has also repeatedly threatened Israel. The CAATSA grants the President of the United States the ability to impose sanctions on any party involved in the sale or transfer of military technology to Iran.
• Continued Threats by North Korea – North Korea has regularly threatened its neighbor, South Korea and the United States. It also has a nuclear weapons military programme, and its missile arsenal is anticipated to have 30-40 warheads with enough fissile materials to launch 6-7 missiles per year by 2020.

Important Sanctions Under CAATSA

Some of the Important sanctions which have been imposed by the US are –

CAATSA sanctions list
S.No.	Sanction	Year	Description
1	Countering Iran’s destabilizing activities act	2017	Sanctions against Iran’s ballistic missiles or weapons of mass destruction can be imposed by the US president. The President of the United States may also put sanctions on those responsible for abuses of United Nations’s recognised human rights committed against individuals.
2	Countering Russian Influence in Europe and Eurasia Act	2017	This act imposes additional penalties on Russia for interfering in the 2016 US elections as well as its engagement in the conflicts of Ukraine and Syria.
3	Korean interdiction and Modernization of Sanctions Act	2017	US financial institutions will not establish or keep any correspondent accounts utilised by foreign financial institutions to provide North Korea with indirect financial services.

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Powers Of US President under CAATSA

The President of the US has the following powers under CAATSA :

• Under CAATSA, he can impose at least five of the 12 listed sanctions on individuals involved in “significant transactions” with Russian defence and intelligence sectors.
• If it is in the essential national security interests of the United States, the US president can waive the initial application of CAATSA sanctions against any person.
• The President may delay the enforcement of sanctions if the individual significantly reduces the number of important transactions with countries that have been put under CAATSA.

Exceptions under CAATSA:

• Sanctions will not be applied to routine transactions, and determining who will face the sanctions depends on how “major transaction” is defined.

Check out this article on the Nuclear Suppliers Group for UPSC exam.

India and CAATSA

• The India-US relationship has risen sharply in the recent decade, particularly in defense partnership. Since 2019, India has traded over 15 billion USD in the defense segment with the USA.
• Since the Cold War era, India has procured many advanced weapons from Russia. India is still heavily dependent on Russian arms. A SIPRI report states that Russian armaments account for half India’s overall military purchases.
• Russian defense manufacturer Almaz-Antey Air and Space Defence Corporation JSC manufactures the S-400 system. These companies are among the 39 CAATSA-sanctioned companies. CAATSA, if strictly enforced, will influence the Indian defense acquisition of the S-400 missile system from Russia.
• In October 2018, India signed a defense deal of $5 billion with Russia for five S-400 air defense missile systems. At the time, the Trump administration had warned India that India could face severe sanctions for this transaction.
• Later, Sanctions were not imposed on India due to a waiver clause that considered India’s intentions to diversify defense purchases over time. The US defence industry views India as a major market.
• Previously, India had come under CAATSA over buying oil from Iran. Iran was India’s top import destination country, but later India reduced its purchase of crude oil from Iran.
• The imposition of CAATSA will have an impact on strengthening Indo-US ties. It will tarnish the US’s image as a trusted partner at a time when the US is promoting India as a key player in its Indo-Pacific strategy.

Check out this article on the South China Sea Dispute here.

S-400 missile system of Russia

• The S-400 Triumph is a complex air defense missile system comprising radars, control systems, and many different types of advanced missiles.
• Almaz Central Design Bureau designed it in the 1990s to upgrade Russia’s S-300 missile system.
• It is a type of surface-to-air missile system.
• The S-400 missile system has a range of 400 kilometers at an altitude of up to 30 kilometers and can build a layered defense.
• The S-400 air defense system is equipped with advanced features of targeting systems, autonomous detection, multifunction radars, anti-aircraft missile systems and a command and control center.
• This missile system can identify and destroy advanced fighter jets like the F-16 and F-22 and missiles like the Tomahawk.
• Some of the other Key Technical Features of the S-400 are:
  • Maximum target speed – 4.8 km/s (Mach 14)
  • Target detection distance – 600 km
  • The number of simultaneously engaged targets – is 80
  • The number of simultaneously guided missiles – 60
  • Time is taken to get ready for operation on a signal from driving – 5 minutes.
  • Time is taken to get ready for operation on a signal from standby – 35 sec.

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How India will be benefited from the S-400 Missile Deal?

The S-400 Missile deal between India with Russia will benefit the defense forces of India in the following ways discussed below:

• Air defense missiles used by the Indian Air Force (IAF) can now only engage targets 40 kilometers distant. In contrast, the S-400 will triple the IAF’s missile range.
• The radars on the S-400 can see deep within Pakistani territory and detect enemy aircraft nearly immediately after they take off.
• The missile system along China’s eastern border can monitor fighter jets taking off from airfields on the Tibetan plateau.
• In a conflict, the S-400s will free up our multi-purpose fighters to perform other operations, such as air-to-ground bombing missions, rather than tying them up in the air superiority duty of shooting down opposing fighters.

Key Features Of CAATSA

• The Countering America’s Adversaries Through Sanctions Act (CAATSA) seeks to impose sanctions on Russia, Iran, and North Korea.
• The Act addresses sanctions imposed on Russia’s oil and gas business, defence and security sector, and financial institutions in response to its military intervention in Ukraine and alleged meddling in the 2016 US presidential elections.
• In 2018, the President of the United States was given the authority to waive CAATSA sanctions on a case-by-case basis.
• The two main types of sanctions under the CAATSA are –
  • Prohibition on loans to the sanctioned country
  • Prohibition of Export-Import bank assistance from the United States for exports to sanctioned persons/companies.

Check out this article on Missile Technology Control Regime (MTCR) for UPSC Exam.

Criticism Of CAATSA

• According to geopolitical research think tanks, the CAATSA will make it more difficult for the United States Asian partners to resist expanding Chinese dominance through debt trap diplomacy and Belt and Road Initiative (BRI).
• This would deter other sovereign countries from developing defensive relationships with the US to avoid future strategic autonomy sacrifices. According to geopolitics strategists, if the CAATSA is implemented strictly, it would have a negative impact on US policy shortly.

What are the implications of the CAATSA Waiver on India-US Relations?

• The NDAA amendment encouraged the US to do more to help India transition away from its reliance on Russian-made weapons.
• The amendment is consistent with the prevailing strategic tone of bilateral ties.
• 2008 was a turning point, and since then, US defence transactions with India have totaled at least USD 20 billion. 
• Only USD 500 million were spent on it in the time before 2008.
• Moreover, the US recognised India as a significant defence partner in 2016. With associations like Quad and, more recently, I2U2, strategic linkages have also been strengthened.
• It is in India's strategic interests to move away from Russian platforms.
• Since it invaded Ukraine, Russia's reliance on China has grown dramatically, and this position is unlikely to change in the near future.
• China is currently Russia's second-largest arms export customer, behind only India.
• Dependence on Russian weapons systems is unwise, given the unravelling of India's long-standing border management protocols with China.
• The CAATSA waiver has regional security implications, as it signals the US recognition of India's importance as a regional security partner. This could have implications for India's relations with other countries in the region, particularly China and Pakistan.

Way Ahead

India must strike a balance in its relations with Russia and the United States to protect its national interests. India must use its position to help develop a peaceful international order.

UPSC Previous Year Mains Questions (PYQs) related to CAATSA Act

Q1 “The USA is facing an existential threat in the form of China, which is much more challenging than the erstwhile Soviet Union.” Explain. [UPSC Mains 2021]

Q2 What is the significance of Indo-US defence deals over Indo-Russian defence deals? Discuss with reference to stability in the Indo-Pacific region.  [UPSC Mains 2020]

Q3 What introduces friction into the ties between India and the United States is that Washington is still unable to find for India a position in its global strategy, which would satisfy India’s national self-esteem and ambitions. Explain with suitable examples.  [UPSC Mains 2019]

Q4 In what ways would the ongoing US-Iran Nuclear Pact Controversy affect the national interest of India? How should India respond to its situation?  [UPSC Mains 2018]

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