CAATSA is a special law enacted. Its “ultimate aim”, in the words of a senior official of the Ministry of Foreign Affairs, “is to prevent revenue from flowing to the Russian Government.” Toward that end, the sanctions are meant to prevent “significant transactions,” a term that laws have been left undefined. However, in announcing sanctions against EDD, the US government classified the purchase of S-400 systems as “a significant transaction.”
Therefore, India purchase of S-400 systems from Russia will also be considered as a significant transaction and inviting sanctions mandatory.
Indian analysts, and reportedly the Government of India as well, hoping for a waiver of the application of such sanctions. While it is true that CAATSA been provided for a waiver of ‘application’1 beginning of the sanctions, it would be difficult for any president to issue certifications, to be submitted to the US Congress for a waiver as it was, that “the government of the Russian Federation has made significant efforts to reduce the amount and intensity of cyber disruptions carried out by the government. “
Therefore, there would be no waiver of the initial application of sanctions as desired by India. Sanctions, as stated, will be charged to those “who knowingly engage in significant transactions.” In the case of China, it is EDD is responsible for managing the procurement of the Chinese military.
Which in India will be defined as a person who “knowingly enter into transactions” for the S-400?
It could either be (i) the Defense Acquisition Council (DAC) headed by the Minister of Defense, or (ii) the Defense Procurement Board (DPB), led by the Minister of Defense. Selection of the person who will sanction will be made by the US President or the Secretary of State or the Minister of Finance who has delegated these powers.
The USA Stance: The USA has reaffirmed its position in CAATSA in the context of the planned Indian fighter jet deal with Russia on the estimated Rs. 18 148 crores.The USA suspended Turkey of F-35 aircraft program and are prohibited from purchasing the jet, after the purchase of Turkey from the S-400 from Russia
The road ahead
India’s defense procurement has become significant in the middle of a deadly clash with China on the Line of Actual Control (LAC). Russia is the all-weather defense partner of India.
However, India will need to balance its relationship with both Russia and the United States, so that national interests are not compromised.