August 11, 2018

US waiver for Russia defence deal in the bag for India, Trump to sign bill

US President Donald Trump is expected to sign into law on Monday a defence spending legislation that will allow India to go ahead with a $4.5-billion deal to buy five S-400 air defence systems from Russia without the fear of sanctions.

The National Defense Authorisation Act-2019, passed by the House of Representatives and the Senate, grants conditional waivers from unintended sanctions mandated by an existing law to third-party countries such as India that conduct significant business transactions with Russia.

The bill was passed after a “conference”, during which a joint committee of the two houses reconciled legislations passed separately by them and finalised a text both agreed to. The White House has announced Trump’s intent to support the bill.

With Trump set to sign the legislation, Indian diplomats, policy and think tank experts and lobby groups should feel relieved that months of tireless efforts have paid off.

The bill amends the Combating America’s Adversaries Through Sanctions Act (CAATSA), which seeks to punish Russia for the 2016 election meddling, and also threatens sanctions against third-party countries making “significant transactions” with designated Russian entities in military and intelligence.

This would have left India open to secondary or unintended sanctions for its plans to purchase the S-400 air defence systems. US Congress was persuaded to amend the law to exempt countries such as India and Vietnam after a spirited push from defence secretary James Mattis, backed by secretary of state Mike Pompeo, who argued that punishing these countries under CAATSA will push them back into the arms of Russia.

The new exemptions are based on conditions, most of which are met by India, officials and experts said.

The legislation also cuts security aid to Pakistan to $150 million, down from the billions it received earlier for its counter-terror campaign and assistance in the Afghan war. But it lets Islamabad off the hook for proving its counter-terrorism credentials to claim that aid, including proof of actions against the Haqqani Network, a Taliban faction based in Pakistan.

Trump, who is on vacation at his business-owned resort in New Jersey, is expected to sign the “H.R. (House of Representatives) 5515, John McCain National Defense Authorization Act for FY (financial year) 2019” at a ceremony at a military facility in New York state on Monday.

“As a Member of the House Armed Services Committee and the Chair of the Subcommittee on Emerging Threats and Capabilities, I am honoured that the President will sign the historic National Defense Authorization Act in our district at Fort Drum,” Elise Stefanik, a Republican member of the House of Representatives, said in a statement.

The conditions say the proposed transaction by the third-party country should “not endanger the integrity of any multilateral alliance” with the US, should not adversely affect ongoing operations of US armed forces, should not have a negative impact on defence cooperation with the US, and should not significantly increase the risk of compromising US defence systems and operational capabilities.

The country benefiting from the waivers must demonstrate it is taking “steps to reduce its inventory of major defence equipment and advanced conventional weapons produced” by Russia.


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