What is CAATSA Act? What Sanctions are under CAATSA? How can USA impose Sanctions on India?

CAATSA Act: The 'Countering America's Adversaries Through Sanctions Act (CAATSA)' is a piece of US legislation that imposes sanctions on the American Adversaries- North Korea, the States of Iran, and Russia. But why US is considering to impose sanctions against India under CAATSA Act?

Sanctions on India by US
Sanctions on India by US

CAATSA Act:  Amid Russia and US conflict over Russia’s invasion of Ukraine, the United States has announced that the country has been looking whether to apply or waive sanctions on India for its purchase of S-400 Triumf missile defence system from Russia, under the Countering America’s Adversaries Through Sanctions Act (CAATSA). 

The latest remarks from the United States came as India drew criticism from the US lawmakers, both Democrats and Republicans, at a hearing on the US relationship with India for being among the 35 countries that abstained on March 2 from a UN vote to rebuke Russia’s invasion. For India, not voicing against Russia has become a critical issue as the country relied heavily on the Russian Military exports. In 2020, Russia contributed 49% to India's total military imports.

The latest announcement by the US regarding imposing sanctions against India under CAATSA has bought the country to the loggerheads with the United States. Let's understand what is CAATSA and how US can impose sanctions on India.

What is CAATSA Act?

The 'Countering America's Adversaries Through Sanctions Act (CAATSA)' is a piece of US legislation that imposes sanctions on the American Adversaries- North Korea, the States of Iran, and Russia. CAATSA Bill was passed back in 2017. 

The sanctions under CAATSA had targeted Russia in particular for the Crimean annexation as well as for its alleged role in 2016 US Presidential elections. 

What sanctions are under CAATSA?

The sanctions under CAATSA Act covers:

1. Countering Iran's destabilizing activities act of 2017: It required the US president to impose sanctions against Iran's ballistic missile or weapons of mass destruction. The President may also impose sanctions against persons responsible for the violations of internationally recognized human rights committed against individuals.

2. Countering Russian Influence in Europe and Eurasia Act of 2017: The act had imposed new sanctions on Russia for the interference in the 2016 US elections and its involvement in Ukraine and Syria, among others. 

3. Korean interdiction and Modernization of Sanctions Act: Among other impositions, under the act US financial institutions are not to establish or maintain any correspondent accounts used by the foreign financial institutions for providing indirect financial services to North Korea.

The sanctions under Countering America’s Adversaries Through Sanctions Act (CAATSA) are intended to economically hurt the countries. As part of the sanctions, the United States can also economically push any country which will try to engage in the transactions with the nations against whom sanctions are imposed. 

How and Why US can impose sanctions against India?

As Russia progresses day by day in controlling Ukraine's cities, the US has been imposing sanctions against Russia over its actions and violence in Ukraine, whether they are economic or defence.

With India's 'no stand' against Russia's actions in Ukraine and the latest decision of abstaining from the UN vote to rebuke Russia's invasion, the US's mounting pressure on the country to take sides has become a problem point for India. Under CAATSA, US can consider sanctions against India for continuing with defence deals with Russia amid the international crisis. 

A concern that stood out repeatedly during a hearing on the US relationship with India was the India-US defence security cooperation and whether India will be sanctioned for its purchase of the S-400 Triumf missile defence system from Russia. However, Biden Administration is yet to decide on applying sanctions on India under CAATSA.

As per the US Diplomat Donald Lu, India is a really important security partner of the US and it values moving forward that partnership.

As the United States strengthens its ties with India as a pivotal regional counterweight to China, Joe Biden's administration has delayed the enforcement of a law ordering sanctions on India for trading with Russia.

What will be the impact if US waives sanction against India?

The US Diplomat explained that India had recently cancelled the orders of Russian MiG-29 fighter aircraft, anti-tank weapons and helicopters and also projected that the new sanctions will motivate other countries to do likewise.

How sanctions will impact Russia?

Lu further added that it is unlikely that Russia will be able to make new sales or provide maintenance to the customers or existing systems. It will be very difficult for anyone to buy major weapon systems from Russia in the coming months and years because of the sweeping financial sanctions that the Biden Administration has levelled.

Background

The latest move by the US against India has come as the country abstained from a UN vote to rebuke Russia’s invasion of Ukraine.

The voting results that were displayed on the screens at the United Nations General Assembly showed that 141 countries had voted in favour of condemning Russia’s invasion of Ukraine, while 5 nations were against it, with 35 countries, including India, abstaining.

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