Russia looks to sign S-400 deal with India amidst US embargo

26 Apr 2018


Russia expects to push through a deal for the sale of S-400 surface-to-air missiles to India amidst a stand-off with the United States and its allies, the Interfax news agency quoted Russian officials as saying on Wednesday.

The agency, citing Russia’s Federal Service for Military-Technical Cooperation, said a deal for the sale of the highly-effective S-400 missile air defence systems to India is likely to be signed this year.
All the technical aspects of the contract had been agreed upon and the price just needed to be decided, the Russian state agency was quoted as saying.
“I think that in the current year we will sign the corresponding contract document,” Interfax quoted Dmitry Shugaev, the head of the Federal Service for Military-Technical Cooperation, as saying.
India, meanwhile, is reported to have sought US exemptions to the Russia deal with its traditional partner. This is because India’s planned defence procurement from Russia could potentially come under US sanctions under the newly enacted Countering America’s Adversaries through Sanctions Act (CAATSA). 
The Act, if implemented in full, could adversely affect India’s defence purchases from Russia and jeopardise India’s growing defence and security relations with the United States.
CAATSA, which was passed overwhelmingly by the US Congress and signed reluctantly by President Donald Trump on 2 August 2017, proposes sanctions on Russian interests such as its oil and gas industry, defence and security sector, and financial institutions, in the backdrop of its military intervention in Ukraine and its alleged meddling in the 2016 US Presidential elections.
The aim is to counter the aggression by Iran, Russia and North Korea through punitive measures. The Act empowers the US President to impose sanctions on persons engaged in a “significant transaction” with Russian defence and intelligence sectors. The sanctions, among others, authorises the President to suspend export licences related to munitions, dual-use and nuclear related items, besides the ban on American investment in equity/debt of the sanctioned person.
Some other sanctions, which are of not much relevance to India, include restriction on US Export Import Bank assistance; prohibition on loans from international financial institutions; exclusion from participation in US government procurement; and visa restrictions on corporate officers of the sanctioned entities.
As part of Section 231 of the Act, the US state department has notified 39 Russian entities that include almost all major Russian companies/entities such as Rosoboronexport, Almaz-Antey, Sukhoi Aviation, Russian Aircraft Corporation MiG, and United Shipbuilding Corporation which are active in manufacturing defence items and/or their exports.
For imposing sanctions on third countries dealing with Russia, the US administration may consider the significance of the transaction to US national security and foreign policy interests, the nature and magnitude of the transactions and the relation and significance of the transaction to the defence or intelligence sector of the Russian government.

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