Sanctions relief

Sanctions relief

News:

1. The CAATSA standoff is posing a major hurdle in India-U.S. relations.

Important facts:

2. Recently, the U.S. congress allowed the introduction of a presidential waiver of its controversial Countering America’s Adversaries through Sanctions Act (CAATSA).

3. Both sides are working hard to standoff over issue.

4. The situation became even more tensed because India has decided to go ahead with S-400 deal with Russia despite U.S. sanctions.

5. CAATSA:

• Signed by President Donald Trump last year against Russia for influencing and manipulating the 2016 presidential election process.
• It imposes sanctions on any country carrying out significant defence and energy trade with sanctioned entities in Russia, Iran and North Korea.
• The sanctions which are implemented through executive order create both primary sanctions risk and secondary sanction risk.
• It aims to counter the aggression through punitive measures.
• Primary sanction: under this U.S. persons are generally prohibited from transacting with blocked persons or organisation.
• Secondary sanction: Non-U.S. persons could face the imposition of secondary sanctions under Section of CAATSA. This prohibit the foreign government and companies to do business with Russia.

6. Recently, Indian authorities has made three fold case for the waiver:

• India has made it clear that no weapons India bought would be used against the U.S.
• The U.S. which wants to partner with India in the Indo-pacific. It would hamper India’s military abilities by applying the sanctions.
• India has significantly reduced its dependence on Russian military hardware while increasing defence purchases from the U.S.

7. Recently, U.S. decided to push for waiver for countries like India, Vietnam and Indonesia.

8. The Joint Explanatory Statement of the Committee of Conference has accepted the need for waivers.

9. The “modified waiver authority”, or amendment to section 231 of CAATSA proposed by congress, allows the President to waive sanctions in certain circumstances, for six months at a time, if it is in U.S’s national security interest.

10. The issue further needs to grasp attention during the upcoming 2+2 dialogue between the Indian and U.S defence and a foreign minister.

11. Apart from CAATSA, other areas which are destroying the Indo-U.S relations is sanctions proposed by the Trump for energy trade with Iran.