U.S. must act decisively but not vindictively with S-400 sanctions - analyst

With the long-awaited transfer of the first Russian S-400 missile defence systems on Friday, Turkey has crossed a threshold in its relations with the United States that will have a clear impact on the NATO alliance and on Turkey’s immediate future.

The United States must move quickly to make good on its threat of sanctions in order to create a red line for other NATO allies eyeing Russian defence hardware, said Director for Special Research at Freedom House Nate Schenkkan.

With options on how to enforce the Countering America’s Adversaries Through Sanctions Act (CAATSA) measures threatened by the U.S. Congress ranging up to the “nuclear”, U.S. President Donald Trump must choose the most effective selection of five from a menu of 12 sanctions.

This means starting with measures that would have an impact on Turkey and send a message to onlookers without being strong enough to cripple the country’s defence industry, Schenkkan said.

Turkish President Recep Tayyip Erdoğan has insisted the purchase of the S-400 batteries would go ahead since signing the deal with Moscow in December, 2017. U.S. officials had wished to dissuade Ankara from the purchase with threats of expulsion from the F-35 programme and CAATSA sanctions.

But the arrival of the missiles on Friday has seen Turkey maintain its tightening relations with Russia, and has undermined “Ankara’s fundamental reliability as a NATO ally”, according to Center for American Progress associate director Max Hoffman.

Schenkkan highlighted the importance of swiftly implementing sanctions to dissuade other NATO allies such as Hungary from following Ankara’s lead and cooperating too closely with Moscow.

Much will depend on Trump’s approach to the CAATSA sanctions, since the president has the option of trying to delay or waive the sanctions as well as selecting what type are levelled at Turkey.

An attempt to delay, however, would face a likely challenge from Congress, since there is bipartisan agreement that a tough stance is required on the issue, Schenkkan said.

The weakest selection of sanctions would affect Turkey’s defence industry without obliterating it, and would be likely to contain measures to prevent or discourage loans to Turkish organisations involved in the S-400 deal.

Even this could have a knock-on effect down the road for Turkey, given the country’s severe economic issues, which may leave it knocking at the International Monetary Fund (IMF)’s door within months, Schenkkan said.

Although it is less severe than the others on the table, if the measure to oppose international financial institution loans to Turkey is chosen and Ankara does need to apply to the IMF, it could prove critical, he said.

A middle of the road option would involve “smaller and more symbolic measures, like visa bans or Export-Import Bank credit bans, with harsher measures”, said Schenkkan.

“The most radical options in CAATSA amount to salting the earth—not only for the Turkish defense industry, but also for any entity or financial institution engaged in the S-400 transaction”, said Schenkkan.

These most destructive measures would involve prohibiting Turkish institutions from engaging in foreign exchange transactions in U.S. banks and from banking transations in U.S. institutions, he said.

Schenkkan recommends a choice of relatively light sanctions with some stronger measures added for bite, calling to mind that levelling more destructive sanctions on Turkey could have a very severe effect on the country’s economy and would leave no room for escalation.

“For that reason, the harshest measures available in CAATSA would be excessive at the present moment. Starting from a maximum-pressure position would leave no room to escalate, and would have immediate dire effects on the Turkish economy that would make it easier to blame the United States for problems caused by Turkey’s own populist and antidemocratic leadership”, he said.