U.S. CAATSA sanctions pose dilemma for allies
May 29, 2018 -- America’s Countering America’s Adversaries Through Sanctions Act (CAATSA) applies sanctions on 39 entities in Russia’s defence and intelligence sectors, and secondary sanctions on countries engaging in business with them.
After successfully threatening secondary sanctions against some of Europe’s largest companies -- France’s Total and Airbus, Norway’s Saga Energy and Denmark’s shipping group A.P. Moller-Maersk -- over their trade with Iran, Washington is now targeting Russia’s strategic ties around the world.
Under Section 231 of CAATSA, any third-country business or individual that engages in a“significant transaction” with Russia’s defence or intelligence sectors will face secondary sanctions. These penalties will affect many of America’s allies, driving them to reduce their defence and energy dependence with Russia.
Washington is pressing New Delhi to cancel India’s proposed $4.5 billion deal with Russia for five S-400 Triumf air defence missile systems. NATO member Turkey signed a $2.5bn agreement in December to also purchase S-400 systems, while Russia’s Rosatom is building a $20bn nuclear power station at Akkuyu on Turkey’s Mediterranean coast.
Indonesia has defied pressure from Washington, signing a $1.1bn order for 11 Russian-made Su-35 warplanes, while Vietnam is resisting U.S. pressure to dump Russia and buy American weapons.
After losing billions of euros from sanction-threats after the Trump administration quit the Iran nuclear deal, European companies that are partners in Russia’s planned Nord Stream 2 gas pipeline to Germany now face penalties.
The U.S. may slap sanctions on France’s Engie, the UK-Dutch Royal Dutch Shell, Austria’s OMV Group and Germany’s Uniper and Wintershall, all partners in Nord Stream 2.