CAATSA waiver

The US House of Representatives has made a historic decision and approved legislation that recommends an India-specific waiver under CAATSA as a part of an amendment during floor consideration of the National Defense Authorization Act (NDAA).

• The United States House of Representatives has passed by voice vote the legislative amendment that approves waiver to India against the punitive CAATSA sanctions.
• It was in the backdrop of India purchasing the S-400 missile defense system from Russia to help deter aggressors like China.

About CAATSA sanctions:

• The Countering America's Adversaries Through Sanctions Act (CAATSA) law was brought in 2017 and provides for punitive actions by the US government against any country engaged in transactions with the Russian defense and intelligence sectors.
• CAATSA is a tough US law that authorizes the US administration to impose sanctions on countries that purchase major defense hardware from Russia
• Besides Russia, CAATSA is aimed at enforcing sanctions against Iran and North Korea.
• This was in response to Russia’s annexation of Crimea in 2014 and its alleged meddling in the 2016 US presidential elections.

Sanctions on India:

• Types of Sanctions: The CAATSA contains 12 types of sanctions. There are only two sanctions that may impact either India-Russia relations or India-US relations.

1. Prohibition of Banking transactions: The first of these, which is likely to have an impact on India-Russia relations, is the “Prohibition of Banking transactions”.

This was meant for making it difficult for India in making payments in US Dollars to Russia for the purchase of the S-400 systems.

2. Export Sanction: This is the “export sanction” which has the potential to completely derail the India-US Strategic and Defence partnership, as it will deny the license for, and export of, any items controlled by the US. The second sanction will have greater consequences for India-US relations.

• Waiver Criteria: The US President was given the authority in 2018 to waive CAATSA sanctions on a case-by-case basis.

How did the issue raise?

• In October 2018, India signed a USD 5 billion deal with Russia to buy five units of the S-400 air defense missile systems, despite a warning from the then-Trump administration, while ignoring the CAATSA.
• The U.S. threatened India with sanctions over India's decision to buy the S-400 missile defense systems from Russia.

The S-400 is known as Russia’s most advanced long-range surface-to-air missile defense system. The US has already imposed sanctions on Turkey under the CAATSA for the purchase of a batch of S-400 missile defense systems from Russia.

Reasons for waiver and US stand:

• The United States now recognizes the common goal of curbing China’s advancement in the region and the waiver will help to deter aggressors like China.
• It must stand with India in the face of escalating aggression from China to ensure that India can defend itself along the Indian Chinese border.
• The US recognizes the significance of its relationship with India in terms of strategic interests.