CAATSA is a US federal law that imposes sanctions on Russia, Iran and North Korea. This law prevents U.S. trading partners from entering into bilateral agreements with these three countries. This measure was adopted on July 27, 2017.
Features of CAATSA
CAATSA Section 231 states that at least 12 of the sanctions described in Section 235 must be imposed on any person or state who knowingly engages or acts in the defense or intelligence sector on Russia?s behalf. Of the five sanctions, the following were imposed under Section 235 of Act of the Ban on Granting U.S. Export Authorizations to Transferred Goods or Technology. Ban on loans or credit from U.S. financial institutions in excess of US$10 million for 12 months. U.S. Export-Import Bank Aid Ban. Requires the US to oppose lending from international financial institutions as well as visa restrictions.
CAATSA Background
CAATSA arose against the backdrop of three events that could have serious geopolitical significance which are:
- Suppressing Russian Influence: Russia’s 2014 annexation of Crimea and the 2016 alleged US intervention in public opinion polls were the catalysts for CAATSA against Russia. Under the law, states or individuals can impose sanctions on Russia if they engage in activities such as cybersecurity, financial institutions, oil projects, human rights violations, corruption, etc.
- Iran’s Nuclear Missile Program: The US government feels that any progress in Iran’s nuclear missile program will further destabilize the Middle East, as Iran repeatedly threatens Israel, NATO ally and other major US allies. CAATSA empowers the President of the US to impose sanctions on all parties involved in the transfer and sale of military technology to the country of Iran.
- North Korea and Weapons of Mass Destruction: North Korea has a military nuclear weapons program and as of 2020 North Korea’s missile arsenal has 3,040 warheads containing enough fissile material to produce 67 missiles a year. North Korea has repeatedly threatened South Korea as well as the United States. Previous administrations previously imposed sanctions on the North Korean dictatorship. What sets CAATSA apart, however, is that the law modifies and strengthens the president’s power to impose sanctions on individuals who violate certain UN Security Council resolutions against North Korea.
Impact on India
CAATSA will sever ties with Indo US. India will also undermine the US image as a trusted partner while playing a key role in its Indo-Pacific strategy. Defense trade between India and the United States has recently increased. In a decade, the trade gap between countries has grown from nearly zero to $15 billion.
Three influential US senators have urged President Joe Biden not to punish India’s adversary for purchasing S400 missile systems from Russia through the CAATSA. Republican Senator Ted Cruz, Mark Warner of the Democratic Party, and John Cornyn of the Republican Party in a letter to Biden asked him to give India a CAATSA exemption for the benefit of U.S. national security as India is a part of the newly formed Quad of India, US, Japan and Australia.