Tensions are rising between the United States and Turkey over its decision to purchase the S-400 air defense system. The United States had previously threatened to impose sanctions on Turkey if it decided to purchase the Russian-made system. Whether the US will follow through with its sanctions threat remains to be seen.
Background of the Turkey Sanctions Threat
Turkey has been negotiating the purchase of the Russian S-400 air defense system. Turkey believes the new system will help its military capabilities, while the United States believes that Turkey should only purchase US or NATO designed air defense systems.
The United States has threatened sanctions on Turkey if they were to finalize and acquire the Russian S-400 air defense system under CAATSA, or Countering America’s Adversaries Through Sanctions Act. Defense firms and companies involved in the purchase or acquisition of the Russian S-400 defense system in Turkey may be designated and put on the SDN list.
Turkey believes that the purchase of the S-400 air defense system has no interference with the purchase of F-35 jets from the United States. However, the United States is keen on securing US and NATO technologies in Turkey. US President Donald Trump believes that his predecessor President Obama was responsible for allowing Turkey to follow through with the Russian air defense system acquisition.
Potential Impact of Sanctions on Turkey
It is currently unknown how many or if any sanctions will be placed on Turkey. If the United States were to follow through and impose sanctions, it will be the first US economic sanctions against a NATO member to a significant degree. The imposition of sanctions is controversial since Turkey is a major business and economic partner of the United States. The value of Turkish currency, the Lira, has been hurt due to the threats of sanctions.
If the US decides to impose sanctions on Turkey, it could possibly result in a ceasing of dealings by US persons and companies and even international national companies with Turkish defense firms. This would hurt the Turkish economy.
Speak with an OFAC Attorney About Sanctions Compliance
Should OFAC sanctions be imposed on Turkey, it will become critical for US persons and businesses to ensure compliance. An OFAC attorney could review any transactions to determine if or how OFAC regulations apply. They could then help implement compliance programs or apply for the necessary licenses.