Aspiring to become a tier 3 green water force — Part 1
...does CAATSA even apply to a vague notion of 'strengthening defense cooperation'...
1. Russia is a member of ADMM Plus and all ASEAN MEMBERS, Indonesia included can talk with the Russians as much as you want on defence cooperation and the conduct of joint bilateral or multilateral exercises, including signing new contracts and MOUs to maintain existing Russian aircraft or Russian IFVs like the BMP-3F in Indonesian service. Assistant Secretary of State for Political-Military Affairs R. Clarke Cooper said: “The CAATSA sanctions are not designed to be punitive to a partner and ally that has got
a sustainment issue or an operation or maintenance issue. We’re certainly not looking to disrupt that…” This American law means no Indonesian bank is willing to provide a letter of credit to facilitate a Russian cross border significant transaction caught by CAATSA.
2. If Prabowo wants to buy significant or new naval weapons from Russia (as per the topic in this thread), CAATSA applies, unless an American waiver is granted (see
post #1900). This is a 2 Aug 2017 American law that is binding on US State Department and US DoD officials and they have no choice but to follow it.
3. Indonesian input is not formally sought in the application of American sanctions, as the TNI and the Indonesian defence ministry are well aware. Those who miscalculate like Turkey, get to find out how serious CAATSA is for US Congress. Turkey thought that as a NATO ally, they were immune to limited American sanctions, as they host a US forces in Incirlik Air Base that stores tactical nuclear weapons and were a partner in the JSF program (that they are now kicked out of).
4. Biden is keen to take a multilateral approach as he looks to enlist allies and partners in a united front of democracies to the authoritarian challenge of China. "The United States won't force our allies into an 'us-or-them' choice with China," Blinken said. Indonesians who do not think maintaining good relations with the Biden admin is essential, in the era of tensions with China (where it clashed with China over fishing rights around Natuna Islands) are idiots. I also note that Indonesia has been lobbying senior American officials to keep it on a list of countries that receive special trade terms under the Generalized System of Preferences (GSP), a facility that gives reduced tariffs to about US$2 billion of Indonesian exports.
(a) The US last extended Indonesia’s GSP status in early Nov 2020; any unwise Indonesia decision to violate CAATSA will ensure that future GSP status renewals will be much more difficult.
(b) Turkey lost its GSP status in 2019, with the US government citing the country’s improved level of development.
(c) Another beneficiary to lose its GSP status in 2019 was India due to the country not providing assurances to the US that it will provide equitable access to its large market.
5. In the case of Turkey, their S400 purchase triggered the following sanctions under Section 235 of CAATSA, as implemented by Executive Order 13849 on 14 Dec 2020:
#1: a ban on US Export-Import Bank assistance for exports to SSB (Section 235(a)(1));
#2: a prohibition on granting specific US export licenses and authorizations for any goods or technology transferred to SSB (Section 235(a)(2));
#3: a prohibition on loans or credits by US financial institutions to SSB totaling more than US$10 million in any 12-month period (Section 235(a)(3));
#4: a requirement for the US to oppose loans benefitting SSB by international financial institutions (Section 235(a)(4)); and
imposition of full blocking sanctions and visa restrictions (which include sanctions #7, #8, #9, #11, and #12 of the sanctions listed above) on the following individuals:
- Dr. Ismail Demir, president of SSB;
- Faruk Yigit, SSB’s vice president;
- Serhat Gencoglu, Head of SSB’s Department of Air Defense and Space; and
- Mustafa Alper Deniz, Program Manager for SSB’s Regional Air Defense Systems Directorate.
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