July 2019 – Turkey Sanctions

In July 2019, the Trump Administration approved a certain set of sanctions on Turkish persons and entities due to Turkey’s acquisition and purchase of the Russian-made S-400 Missile Defense System.

The United States believes that the acquisition of this Russian Missile Defense System is a threat to U.S. and NATO’s security and possibly provides valuable defense information to Russia. These sanctions would be authorized under section 231 and 235 of CAATSA, the Countering America’s Adversaries Through Sanctions Act. CAATSA authorizes sanctions on persons and entities purchasing Russian arms and defense equipment.

The sanctions may include targeted designation of persons and entities involved in the acquisition and implementation of the Russian S-400 Missile Defense System. They may also include secondary sanctions or sectoral sanctions against the Turkish defense industry.

Past CAATSA-Related Sanctions

Last September, CAATSA-related sanctions were imposed on China for the importation of Russian weapons. The United States imposed sanctions on China’s equipment development department, which is the military branch responsible for the acquisition of Russian arms, including combat aircraft and the S-400 Surface-to-Air Missile Defense System.

We may see similar sanctions imposed next week on the Turkish Military Arm that is responsible for acquiring weapons and the related Missile Defense System from Russia.

Authorization Under CAATSA

Section 231 of CAATSA provides that the Executive/President shall impose sanctions for any person that engages in transactions with the Defense Sector of Russia. Section 235 describes the sanctions that can be imposed, which include:

• Restrictions on exports
• Loans from U.S. financial institutions
• Loans from international financial institutions
• Export-import bank assistance
• Certain prohibitions on financial institutions
• Sanctions on the procurement of goods by the U.S. government
• Sanctions on foreign exchange
• Sanctions on certain property blocking actions
• Bans on investment and equity or debt of property and blocking actions
• Bans on investment and equity or debt of sanctioned persons
• Exclusions of corporate officers
• Sanctions on principal executive officers as well

Currently, it is unknown what specific sanctions may be levied on Turkey and Turkish entities in response to its S-400 procurement. The White House has to weigh its options, and the key is continuing to wait to see if any sanctions will be imposed for acquisition of the Russian Missile Defense System.

Past CAATSA-Related Sanctions

Last September, CAATSA-related sanctions were imposed on China for the importation of Russian weapons. The United States imposed sanctions on China’s equipment development department, which is the military branch responsible for the acquisition of Russian arms, including combat aircraft and the S-400 Surface-to-Air Missile Defense System.

We may see similar sanctions imposed next week on the Turkish Military Arm that is responsible for acquiring weapons and the related Missile Defense System from Russia.

Impact of the Upcoming Turkey Sanctions

Upcoming sanctions on Turkey will increase the likelihood of a designation or a ban by U.S. persons and entities engaging in dealings with the Turkish military and perhaps even Turkish arms dealers and contractors. This will also further persuade other countries to avoid acquiring arms from Russia, such as the S-400 Missile Defense System.