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Countering America’s Adversaries Through Sanctions Act (CAATSA)

Topics Covered: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

Countering America’s Adversaries Through Sanctions Act (CAATSA)

The US has urged all its allies and partners to forgo transactions with Russia that risk triggering sanctions under the Countering America’s Adversaries Through Sanctions Act (CAATSA).

  • This indicates that despite a change in the ground realities following the deadly clash between India and China along the Line of Actual Control (LAC) last month, the U.S’s message to countries, including India, on sanctions for the purchase of Russian arms has not changed.

What is CAATSA?

Enacted in 2017, it is a US federal law that imposed sanctions on Iran, North Korea and Russia.

Includes sanctions against countries that engage in significant transactions with Russia’s defence and intelligence sectors.

The Act empowers the US President to impose at least five of the 12 listed sanctions on persons engaged in a “significant transaction” with Russian defence and intelligence sectors.

What sanctions will be imposed?

  1. prohibition on loans to the sanctioned person.
  2. prohibition of Export-Import bank assistance for exports to sanctioned persons.
  3. prohibition on procurement by United States Government to procure goods or services from the sanctioned person.
  4. denial of visas to persons closely associated with the sanctioned person.

Implications on India:

Although the sanctions are not directly imposed on India, it affects India nevertheless. The major reason for this is the nature of relationship India has with Iran and Russia. India happens to have strong trade ties with both these nation states.

No, as per the provisions of the bill, US imposes sanctions on all its adversaries, as well as all countries and firms dealing with this adversaries.

  • So, if India does not remove ties with Russia and Iran, the US may invoke sanctions against India. India cannot afford to lose the growing diplomatic relations with the US, but neither can it afford to forego supplies of defence and oil from Russia and Iran.

InstaLinks:

Prelims Link:

  1. CAATSA is associated with?
  2. Powers of US president under CAATSA.
  3. Types of sanctions that can be imposed.
  4. Significant defence deals between India and Russia.
  5. Overview of Iran Nuclear deal.

Mains Link:

Discuss the features and significance of CAATSA.

Sources: the Hindu.