What is CAATSA? Know CAASTA Sections Act; Implications on India

By Naveen Singh|Updated : June 7th, 2019

Here we will talk about CAATSA, an important act undertaken by the US government to cripple its adversaries. Let's read about it in detail.

What is CAATSA?

The CAATSA, which expands to Countering America’s Adversaries through Sanctions Act is a federal law that is passed by the united states. It imposes sanctions on Iran, Korea and Russia.


Bill in the US Congress

  • The bill was introduced in January 2017, by a group of senators in the Congress, In June 2017, the US Senate voted in an overwhelming majority to pass the bill, after Russia’s alleged interference in the 2016 US presidential elections.
  • Russia’s involvement in the wars in Ukraine, as well as Syria, was also a major factor in the promulgation of this bill.
  • This bill was an amendment to the underlying Iran sanctions bill.
  • The main aim of this bill is to counter the acts of aggression through prescribed punitive measures.
  • The sanctions represent the implementation of multiple legal authorities.
  • A few of these are executive orders passed by the US president.
  • The rest of them are public laws passed by Congress. (modifications to these regulations are posted in the federal register)

Section 231 of CAATSA

The section states that the president has the power to impose 5 or more sanctions (described in section 235) if it has been determined knowingly by the president that, a person, after such an enactment, has engaged in a signification transaction with any individual or operates for/or in behalf of the defence and intelligence sectors of the government of the Russian Federation.

The secretary of state will have the authority to implement this section from September 2017.

Other Important Provisions in CAATSA

  • The US president has the right to impose sanctions against Iran’s ballistic missile or weapons of mass destruction programs. Sanctions may also be issued against Iran’s Islamic revolutionary guard corps or any other affiliated foreign persons
  • Prohibition of banking transactions. Under this section, the secretary of the treasury would prohibit the opening correspondent accounts of financial institutions engaged in the transfer of funds from the sanctioned person in the Russian defence sector.
  • Under section 235 (a) (2), the license is denied for the export of any items controlled by the US to the sanctioned person under the Export Administration Act, the Arms Export Control Act as well as the Atomic Energy Act
  • For Russia, the bill provides sanctions for the activities concerning crude oil projects, cybersecurity, financial institutions, human rights abuses, privatisation of state-owned assets and finally, arms transfers to Syria.
  • The bill also directs the department of treasury to develop a national strategy for combating the financing of terrorism
  • The bill increases the president’s power to impose sanctions on people if there has been a violation of certain united nations security council resolutions regarding North Korea
  • Any foreign government that provides or receives from North Korea is prohibited from receiving certain types of US foreign assistance.
  • A determination shall be submitted by the state department regarding whether North Korea meets the criterion to be a state sponsor of terrorism.
  • The bill also provides sanctions against any kind of North Korean cargo and shipping. It imposes sanctions on goods that are even in part produced by a North Korean convict or as a result of any kind of forced labour.

Types of Sanctions imposed

  • There will be a prohibition of loans to the sanctioned people, as enumerated under section 253 (a) (1)
  • Prohibition by the united states government to procure goods and services from the sanctioned people
  • Denial of visa to people closely associated with the sanctioned person.
  • There will absolutely be no bank assistance for exports to the set of sanctioned persons.

Reactions of Countries

Both Iran and North Korea responded that what the US was doing was promoting an international backlash and that they would show an appropriate reaction to this issue. Russia, on the other hand, demanded that the US reduce its diplomatic and other official personnel from the Moscow embassy. The prime minister of Russia in a press meet stated that this proposed bill had ended all hopes for improving the US –Russia relations. Other countries, such as the EU member states also reacted very strongly to the bill stating that it bought about a very negative aspect of their diplomatic relations, especially with regards to energy and security.

Implications of CAATSA 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.

Notably speaking, Russia is and has been India’s largest supplier of defence equipment

Now, as per the provisions of the bill discussed above, US imposes sanction on all its adversaries, as well as all countries and firms dealing with these adversaries. India falls into the former category.

So to conclude, 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, which is the mightiest economic superpower in the world, but neither can it afford to forego supplies of defence and Oil from Russia and Iran (respectively)

India, in various statements, has made it clear that it will not forgo the S-400 triumph missile deal with Russia, even if the US imposes sanctions. The US, in turn, responded that the bill provides them with the power to waive the sanction in special cases as required, which can be done in the case of an important ally such as India. however, recently, a warning was issued by the US stating that it will not waive sanctions for India if future deals are made with Russia. On this aspect, India chose to remain silent and has not issued any statement yet.

The Defence Minister of India, Ms Nirmala Sitharam, when asked about the Implications of CAATSA on India, stated that India has been doing trade with both these countries a long time before the sanctions were even imposed. It’s an important aspect of India’s economic growth. She also stated that CAATSA is explicitly a US law, not a UN law and thus does not bind India in any manner.


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