Narrow U.S. sanctions on Turkey are primarily designed to target Russia

After deferring action in response to Turkey’s purchase of Russian S-400 missile systems for nearly a year and a half, the Donald Trump administration announced on Monday the imposition of U.S. sanctions required by the Countering America’s Adversaries Through Sanctions Act (CAATSA).

The set of sanctions targeting the Turkish agency responsible for the procurement, Turkey’s Defence Industries Directorate (SSB), its head, İsmail Demir, and three other senior officials are narrow because Turkey is not the primary target of CAATSA.

The law was passed in 2017 largely to counter Russian interventions in Ukraine, Syria, and the 2016 U.S. presidential election, along with other measures targeting Iran and North Korea. CAATSA mandates secondary sanctions like those imposed on the SSB and its leadership as a means to deny Russia’s defence sector revenue by deterring the purchase of Russian military exports.

The sanctions may be limited from a national economic perspective, but Jarod Taylor, an independent foreign policy analyst, told Ahval, that it is “not insignificant to cut off a country's defence acquisitions agency from the American defence industry. Turkey's military modernization strategy and defence exports have been trending towards increased self-reliance, but in some cases they still rely on American export licenses.”

Although Turkey is not the focal point of CAATSA sanctions, its economy is dire straits after years of mismanagement. Ankara burned through billions of dollars of foreign reserves in a failed effort to prop up the flagging lira. Excluding short-term swaps with commercial banks, the central bank’s net foreign assets were negative $52 billion at the end of October. 

Despite some improvement in recent weeks, thanks to a major shakeup in Turkey’s economic leadership, the poor health of the economy does not provide President Recep Tayyip Erdoğan a strong foundation to engage in hardball with Washington if it escalates sanctions in the future.

Turkey is also facing European Union sanctions over its exploration of gas reserves in contested regions of the Eastern Mediterranean. 

Erdoğan enjoyed unprecedented influence over his American counterpart Trump, but their cozy relationship could only provide Ankara with a temporary shield against U.S. sanctions. Trump ultimately had no choice in the matter.

Last week, veto-proof majorities in Congress passed the National Defense Authorization Act (NDAA) for 2021 with a provision mandating the imposition of CAATSA sanctions within 30 days of enactment. Trump has threatened to veto the annual defence-spending bill over a variety of unrelated issues, but Congress would likely override such a veto.

Turkey was already ejected from the joint U.S.-led F-35 fighter jet programme last year after it took the first delivery of S-400 components. The United States says that the advanced S-400 radar poses a significant threat to the fighter’s stealth capabilities and thereby to collective NATO defence. The must-pass NDAA for 2021 would mandate that CAATSA sanctions could only be lifted if Turkey gets rid of its S-400s.

Turkey disingenuously argues that it was forced to turn to Russia for missile defence systems, because the United States refused to sell it the comparable American Patriot missile systems and that it does not take Turkish security needs seriously. The United States and other NATO allies have previously deployed Patriot batteries to Turkey at Ankara’s request.

Moreover, the United States has offered to sell Turkey Patriots several times, including after Turkey entered negotiations with Moscow over the purchase of S-400s, but Washington was unwilling to meet Turkish demands for missile technology transfers. However, Turkey fared no better in the deal it signed with Russia, which also rejected Ankara’s request for technology transfer.

Erdoğan called the sanctions “unjust” and said Washington had repeatedly rejected Ankara’s offer to for a joint working group to address U.S. concerns. However, American diplomats and lawmakers had warned Turkey repeatedly that it faced removal from the F-35 program and CAATSA sanctions for buying S-400s. Decrying an American double standard may boost Erdoğan’s domestic political standing, but it is unlikely to sway Washington.

CAATSA requires the American executive branch to implement a minimum of five out of 12 sanctions described in Section 235 of CAATSA. The Trump administration selected the five actions that are most limited in scope, avoiding sanctions on Turkish financial institutions that could have a broader impact on the Turkish economy.

“The sanctions imposed on the SSB officials are entirely symbolic and toothless, while the ban on export licenses and authorizations might actually end up pushing Turkey further away from U.S.- and NATO-compatible equipment in the long run,” Sibel Oktay, an associate professor at the University of Illinois at Springfield, told Ahval.

By prohibiting the “granting” of U.S. export licenses and authorizations, Washington has banned future projects with the SSB or any updates to existing programs but the sanctions will not impact pre-existing U.S.-Turkey co-production and development programs.

The measures will impact structural upgrades to Turkey’s fleet of F-16 jets and Turkey’s $1.5 billion sale of attack helicopters to Pakistan, both of which depend on U.S. export licenses that have not been issued yet due to a two-year congressional hold on major arms sales to Turkey.

“There could be some ripple effect depending on how European suppliers would perceive this situation,” Çağlar Kurç, an adjunct lecturer at Bilkent University, told Ahval. Foreign companies may avoid deals with a contaminated SSB in order to maintain good relations with the United States.

Overall, Kurç said it is difficult to quantify the damage because we don’t have data on future U.S. inputs to Turkish arms production and the knock-on effects of the sanctions are uncertain at this point.

However, he noted that Turkey could mitigate the impact of sanctions on its defence sector by reassigning procurement management to a different government body, such as the Ministry of Defence. The SSB is currently housed in the office of the president.

Erdoğan’s apparent overconfidence that Trump would provide a CAATSA waiver and facilitate the export of F-35s despite Turkey’s purchase of S-400s was clearly misplaced, and Trump’s successor, President-elect Joe Biden, is much less likely to let Turkey off the hook.

However, the bilateral relationship may not be condemned to retrograde. Oktay suggested that “imposing the sanctions now opens the door for Biden to play the ‘good cop’ after January 20th. These sanctions have been imposed under the outgoing administration, after all. And Biden can frame the situation as such to create an opportunity to change Turkey’s behaviour.”

Going forward, Taylor said, “Ankara appears to have a choice to make between advanced NATO interoperable military technology, and Russian equipment.’’

“The longer this decision is drawn out, the more costly it could be for Turkish defence modernization to try to play both sides,” he added.

The opinions expressed in this column are those of the author and do not necessarily reflect those of Ahval.