Assistant Secretary for International Security and Nonproliferation Dr. Christopher Ford and Deputy Assistant Secretary for European Affairs Matthew Palmer On the Imposition of Sanctions on Turkey under CAATSA 231
Dr. Christopher Ashley Ford, Assistant Secretary
Bureau of International Security and Nonproliferation
December 14, 2020
MR BROWN: Thank you, moderator. And thanks everyone for joining us this afternoon. On today's call we'll be discussing Secretary Pompeo's announcement released just a moment ago on the imposition of sanctions on Turkey under CAATSA 231. This call is on the record, and the contents are embargoed until the call is completed.
Joining us to brief you today on the announcement are Doctor Christopher Ford, Assistant Secretary for International Security and Nonproliferation; and Matthew Palmer, Deputy Assistant Secretary for Europe and Eurasia. They will both have opening remarks and then take your questions. If you'd like to go ahead and get into the question queue, just press 1 and then 0.
And with that, I'll hand it over to Assistant Secretary Ford. Please, go ahead.
ASSISTANT SECRETARY FORD: Thanks very much, Cale, and good afternoon to everybody. As you all might recall, Congress passed the so-called CAATSA statute â€“ that is to say, the Countering America's Adversaries Through Sanctions Act â€“ in the summer of 2017, after a series of, well, frankly outrages by the Russian Federation that involved â€“ included invasions of its neighbors and interference in the electoral processes of other countries, including the United States itself.
The statute â€“ if you've read it, you'll know it's a sprawling one with many constituent elements, but my bureau at the Department of State has had the privilege of implementing one of its important pieces, the mandatory sanctions proscribed in Section 231 of CAATSA against anyone determined to have engaged in a significant transaction with certain listed elements of Russia's defense or intelligence sectors.
Now, as I explained to the Senate Banking Committee in August of 2018, we've been very pleased to have the tools that we're provided by CAATSA's Section 231, for we see those sanctions as an important way to push back against Russia's maligned behavior.
And over the last three years, we've used the threat of such sanctions to deprive the Russian arms industry of would-be overseas customers. The Kremlin's foreign arms trade provides Russia with funds it uses to pay for the weapons with which it postures against the United States and our allies and with which it can support malign activities in occupied portions of Ukraine and Georgia, for instance in Moscow's atrocity-committing client state of Syria and elsewhere. This arms trade also helps Russia create relationships with foreign clients that it thereafter uses and manipulates for strategic advantage.
So we've been happy to have the ability to use Section 231 sanctions to deter those kinds of transactions. And we've had a good track record in doing so â€“ to the tune of many billions of dollars in announced or expected Russian arms transactions that have quietly been abandoned as a result of our diplomatic outreach under Section 231. That's billions of dollars that Putin's war machine will not get, and through which the Kremlin's malign influence will not spread. And that's also a slew of strategic relationships between the Kremlin and overseas partners that will not broaden and deepen. And so as I told the Senate back a couple of years ago, we are very proud of this record, and we are working hard to strengthen that record.
But â€“ and here of course we're getting to today's announcement â€“ if someone goes forward and procures dangerous new equipment from the Kremlin anyway, U.S. law does require the imposition of sanctions. These are mandatory penalties rather than discretionary ones. Accordingly, for example, in 2019 we sanctioned the military procurement entity of the People's Republic of China, an institution known as EDD, and its director, a fellow by the name of Li Shangfu, for their involvement in China's procurement of S-400 surface-to-air missiles from Russia.
And now today, unfortunately, we have to impose CAATSA Section 231 sanctions in response to Turkey's acquisition of the S-400 system from Russia as well.
The United States has made clear to Turkey at the highest levels and on numerous occasions that its purchase of the S-400 system would endanger the security of U.S. military technology and personnel, and would provide substantial funds to Russia's defense sector as well as Russian access to the Turkish armed forces and defense industry. We also repeatedly made clear that such a purchase could expose Turkey to mandatory sanctions under Section 231 of the CAATSA statute.
Yet Turkey decided to move ahead with the procurement and testing of the S-400. It did this despite the risk of such sanctions and despite the availability of alternative NATO-interoperable systems to meet Turkey's defense requirements which we have repeatedly offered to Turkey, and it has equally repeatedly refused. So this decision left us no alternative but to act.
Turkey's acquisition of the S-400 has already resulted in Turkey's suspension and pending removal from the global F-35 Joint Strike Fighter partnership. Today, we are furthermore implementing Section 231 sanctions against Turkey's Presidency of Defense Industries organization â€“ or "SSB," in its Turkish acronym â€“ which is the country's military and procurement agency. Specifically, we are imposing the following penalties upon SSB:
First, a prohibition on granting specific U.S. export licenses and authorizations for any goods or technology.
Second, a prohibition on loans or credits by U.S. financial institutions totaling more than $10 million in any 12-month period.
Third, a ban on U.S. Export-Import Bank assistance for exports.
And fourth, a requirement for the U.S. to oppose loans by international financial institutions to SSB.
In addition to those penalties on SSB the organization, we are imposing full blocking sanctions and visa restrictions on SSB President Dr. Ismail Demir as well as upon three other SSB officials, specifically Vice President Faruk Yigit, Air Defense and Space Department head Serhat Gencoglu â€“ and I'm sure I'm pronouncing that wrong, my apologies â€“ and Program Manager for Regional Air Defense Systems Mustafa Alper Deniz. The Treasury Department's Office of Foreign Assets Control, or OFAC, is adding all four of those men to its Specially Designated Nationals and Blocked Persons List â€“ known as the SDN list. As a result, all of their property and interests within the United States jurisdiction are blocked, and U.S. persons are generally prohibited from transacting with them.
Now, Turkey is a NATO ally, of course, and is â€“ and a close security partner of ours, and we remain committed to that relationship. But Ankara's acquisition of the S-400 is unacceptable. Since the Secretary of State has determined that this acquisition, a $2.5 billion contract for advanced missiles from Rosoboronexport, Russia's main arms export entity â€“ since the Secretary has determined that that indeed was a significant transaction with the arms sector of the Russian Federation, sanctions under CAATSA Section 231 are mandatory.
We very much regret that this has been necessary, and we very much hope that Turkey will work with us to resolve the S-400 problem as quickly as possible. We hope that other countries around the world will also take note that the United States will fully implement CAATSA Section 231 sanctions, and that they should avoid further acquisitions of Russian equipment, especially those that could trigger sanctions.
So that's my statement, and I'll turn it over to Matt to discuss some of the more Turkey-specific elements. Thanks.
MR PALMER: Thanks, Chris. As you noted, the United States has made it clear to Turkey that its acquisition of the S-400 is unacceptable. We've engaged at length with the Turkish Government at all levels for many months â€“ years even at this point â€“ to discourage it from moving forward with its purchase, delivery, and testing of the Russian S-400. We have offered alternatives to meet the Turkish Government's air defense requirements, including on multiple occasions the sale of U.S. Patriot missiles. Yet, the SSB went forward with a purchase. Turkey took delivery of the S-400 system, and worked toward operationalizing that system.
Now, one of your first questions may very well be what took us so long. Any decision to impose sanctions, including under CAATSA 231, requires a thorough, deliberative process to ensure that the law is followed and that the possible consequences of various courses of action are assessed. That's particularly the case when we're talking about a NATO ally, one that is deeply integrated into NATO supply chains. We engaged in months and months of diplomacy with the Turkish Government at every level to help Turkey find an off-ramp from the procurement of the S-400 system while still ensuring its legitimate national security needs are met. Imposing sanctions on a NATO ally is not something we take lightly.
We continue to value Turkey's contributions to NATO, including its leadership as a framework nation in the NATO Resolute Support Mission in Afghanistan, and as one of the largest troop contributors to NATO Kosovo's force. However, its acquisition of the S-400 runs directly counter to the commitments all allies made at the 2016 NATO Summit in Warsaw to enhance the alliance's resilience by reducing dependencies on Russian equipment. NATO allies need to procure military equipment that is interoperable with other NATO-operated systems, and the S-400 does not meet that standard.
Finally, I want to be clear: CAATSA 231 sanctions are not intended to undermine the military capabilities or combat readiness of any U.S. partner or ally, including Turkey. CAATSA 231 is designed to impose costs on Russia in response to its malicious cyber activities, its unacceptable behavior in Ukraine, and other malign activities worldwide.
Thanks very much for your attention.
MR BROWN: All right, so we'll go to questions. But before we do that, I just want to reiterate that this is on the record. Contents are embargoed until the end of the call for those who joined in late.
So for our first question, can we open the line of Lara Jakes?
QUESTION: Two questions. One, it seems like some of these sanctions, since they only target the SSB and its leadership, are fairly limited when they could have been broader and hitting other high Turkish Government officials and agencies, and affecting financial assistance and investment, for example. So could you please speak to that?
And then also, I'm wondering if â€“ to what extent the United States is coordinating with the European Union, which has also approved sanctions on Turkey in the last several days. Thanks.
ASSISTANT SECRETARY FORD: It sounds like I should take that one. I guess I would say that I would in no way underestimate the importance of cutting off the main military procurement entity of a military ally from items coming from the U.S. Defense Industrial Base. I think this is a very significant, significant step, and I think you're â€“ the question should â€“ your question should reflect the fact that we're actually taking this move.
And some of the balancing that Matt referred to â€“ I mean, this is not a trivial step to be taking with especially a close NATO ally. And we've tried to find a way to identify moves that will make clear that this kind of procurement from the Russian Federation is unacceptable and it will follow the requirements of the CAATSA statute. But our purpose, of course, has not been to upend the relationship with such a close ally. We are trying to send a strong signal and to make SSB clearly feel the consequences of its choice to be involved in this transaction. But this is a balance that we're trying to strike, and I think it's actually quite a careful and thoroughly thought through step to take.
MR PALMER: And I can address the second question, which is that the sanctions that were under consideration at the recent European Council aren't related to the S-400; they're about Turkish activities and behaviors in the Aegean and off the Cypriot coast, exploratory activities and drilling operations.
So we've certainly been talking to the European member states and to representatives of the European Union about potential EU sanctions, but we haven't coordinated this announcement with Europeans. I don't think they would expect that of us. And neither do we have a vote in whatever sanctions the European Council might eventually choose to pursue.
MODERATOR: Okay, thanks. For those who didn't get in until after we had started, the two briefers you just heard were Dr. Chris Ford, assistant secretary in ISN, and Matthew Palmer from EUR.
Let's go to the second question from Will Mauldin, please.
QUESTION: (Inaudible) one of mine, but I wanted to follow up maybe by asking how U.S. officials in Washington think of Turkey these days. Is it a NATO partner? Is it somebody who's doing defense collaboration with Russia? Is it â€“ is it somebody â€“ is it an ally? Is it somebody that the U.S. and its partners are butting heads with in different places? Or is it â€“ where do you think â€“ how would you describe the latest in Turkish relations? Thank you.
MR PALMER: Sure. I mean, it's a complex relationship. It's a challenging relationship. It is a relationship of consequence. Of course Turkey is still a partner and a NATO ally. We very much value Turkey's contributions to NATO â€“ its leadership as a framework nation in Resolute Support Mission, large troop contributor to the Kosovo force. Turkey has contributed a great deal to NATO over the years and contribute â€“ and continues to do so.
But the acquisition of the S-400 system is, as we have made clear to Ankara, fundamentally inconsistent with its obligations as a NATO ally. We're trying to work through that problem. We're ready to talk to Turkey about the path forward. But the decision that we made today is one that reflects some of the fundamental challenges in the U.S.-Turkey relationship.
ASSISTANT SECRETARY FORD: And if I could just piggyback on that a little bit as well, I mean, I think it's worth emphasizing here the degree to which we really tried time and time again to give the opportunity to work through this problem. And this has been a long time brewing. People have known that the S-400 transaction was possible for some time. The CAATSA statute has been very clear and on the books since August of 2017. We have repeatedly tried to, through our diplomatic overtures to Turkey, to find a way to resolve this by means that don't involve the imposition of these mandatory sanctions. And as I indicated in my comments, we have also repeatedly offered them military equipment to help meet their operational needs in a way that is â€“ both doesn't trigger sanctions and that is, in fact, a better answer in terms of the NATO interoperability of the Turkish defense forces.
Unfortunately, Turkey turned down every single one of these efforts over literally several years now, and many engagements and many alternatives offered, and leaving us with no choice ultimately. This is not a step that we have taken lightly or certainly quickly. It has been very carefully pursued. And we tried very hard to give Ankara every opportunity to find a better path forward and it hasn't done so. We hope that the Turkish Government will be willing to engage with us in trying to find a resolution to this, but unless and until something very different from where we are today comes to pass, we are where we are with having to follow the provisions that Congress put in place as part of U.S. law.
MR BROWN: Next question. Let's go to the line of Humeyra Pamuk.
QUESTION: Hello, thank you for this. Could you please explain why you are taking this action today? And I understand these packages take quite a long time, but Ankara took delivery of the S-400s in July 2019, so this administration had plenty of time to go ahead with it. And it's been widely known that the President actually seemed particularly against it. What changed his mind, and why did you end up doing this in the final weeks of the administration? And if I may very quickly, and this is based on government continuity, what steps should Turkey take for the United States to lift these sanctions going forward? Thank you?
MR PALMER: Sure.
ASSISTANT SECRETARY FORD: If I might start actually. There are provisions in the CAATSA statute for waiver of sanctions. They are quite demanding. They were actually quite demanding in the original statute, and then Congress made them somewhat tougher still a while thereafter. So the standard for meeting the waiver is not an easy one to meet, but we do very much hope to be engaged with Turkish authorities to try to find some path forward. It would be, I think, a mistake to try to â€“ to handicap those odds or to try to forecast or predict in advance what that resolution might look like, but we're very keen to have that discussion at the earliest opportunity.
With regard to the timing, I would stress that, as we indicated before, precisely because Turkey is a NATO ally and in many respects a very close friend and longstanding partner, this has been a particularly challenging set of questions to work through, and that is why it has taken quite some time. We â€“ I believe the time elapsed between the receipt of S-400s by the People's Republic of China and our imposition of sanctions against EDD and Li Shangfu was something like nine months, and that is with a country that very clearly is considered a strategic competitor, certainly far from being a military ally of the United States.
So how much more complicated it was, then, to contemplate these questions with respect to Turkey with its very close integration into a sort of Western defense industrial base, with its close military alliance with us â€“ it's been the case since 1952 â€“ and so forth. So I wouldn't be particularly surprised by the time elapsed at all. It is a sign of how carefully we have tried to think this through in ways that hopefully will allow us to preserve a very good and constructive relationship with our ally while yet sending the signal that there is certain behavior that we cannot accept.
MR PALMER: And if I might address the question as to why today, I think the answer to that is because this is how long it took. We were engaged in a very serious deliberative process and it took time to work through this complex set of issues, including in particular the fact that Turkey is a NATO ally. So I would not read too much into the timing of this in sense of why today and not yesterday or three months ago. This is the time that was necessary for us to conclude that deliberative process.
MR BROWN: Okay, thanks. Next let's go to the line of Jackson Richman. Mr. Richman.
MR BROWN: Okay, he seems to have fallen off. Let's go to Joel Gehrke.
QUESTION: Wanted to follow up with a little â€“ sort of related to the timing question. But for a while there was a debate or seemed to be a debate on the Hill about what qualified as a significant transaction under CAATSA. Is it when you write the check or when you accept delivery or when you deploy them? So I wonder, one, do you â€“ how much did Turkey's reported use of the S-400 to track F-16 fighter jets flown by several other NATO member-states following recent exercises play into your decision to â€“ your analysis that the significant transaction has finally occurred?
And then two, obviously, Turkey's in a rough neighborhood and has some really different â€“ really complicated various foreign policy disputes that involve Russia in Syria, in Nagorno-Karabakh, in Libya, elsewhere. Have you guys done any assessment or had any conversations with Turkey about how to develop an offramp that also accounts for and mitigates some of the leverage that Putin might have over Turkey right now?
MR PALMER: Well, I don't think there were any of extraneous or ancillary issues that needed to be fed into this decision. This is one that we'd been working on really for quite some time, and as I said, the reason why today is the day where we're rolling this out is because that is how long the process took. In terms of your second question, what are we doing to try and make things easier for Turkey to manage Russia â€“ is that really what you're getting at with that? I'm â€“ I need a little bit more clarity in terms of what you're thinking.
You still with me?
MR BROWN: I think he's â€“ would have to get back into the queue in order to â€”
MR PALMER: Oh, sorry. I think, though, what we have been doing broadly speaking is to work with our Turkish partners to reinforce and strengthen the relationship with the United States and to help Turkey understand its interests as being best served through its relationship with its Western partners rather than through the relationship that it's developed with Moscow, certainly in the defense and security space. Overall, if you look at what's going on between Turkey and Russia, Turkey is more at odds with Russia than it is seeking to cooperate with Russia. That's certainly true in Libya. It was true in the Caucasus. It's absolutely true on a daily basis in Syria. Fundamentally, Turkey's strategic interests should lie in building the best and possible and strongest partnership with its NATO allies.
ASSISTANT SECRETARY FORD: If I could add on the question of a significant transaction here, the â€“ under the CAATSA statute, the defining of a significant transaction is a determination by the Secretary of State. He made the call, of course, that there was one in this case. But with respect to what happened when, it's worth pointing out that all elements of this have occurred after the effective date of the CAATSA statute, including the signing of the original contract in late 2017 and of course then payments thereunder and receipt of the missiles and testing. So there really â€“ there isn't any disaggregation that is necessary in this particular case. Everything happened after CAATSA's effective date and there is no question about there having been a significant transaction in this case. Over.
MR BROWN: Great. Let's go to the line of Jared Szuba.
QUESTION: (Inaudible) next year's NDAA have anything to do with the timing of this?
ASSISTANT SECRETARY FORD: That's an easy answer: It's no. What we have done is consistent with what I at least understand to be in the NDAA, although I don't know exactly what's going to happen with the NDAA, and as an old Senate staffer I know enough not to be too predictive about such things. But what we have done today is consistent with what the provisions are on CAATSA in that legislation, but it was not driven by it. It's driven by our desire to comply with the law as it currently exists on the statute books, and I think we have indeed done so.
MR BROWN: Nick Wadhams.
All right, looks like we have time for one last question. Nick.
QUESTION: Hi, can you hear me?
MR BROWN: Yep. Go ahead.
QUESTION: I just wanted to â€“ several of us have reported that it was last summer that State and Treasury sent up a list of recommended sanctions on Turkey after the purchase to the White House and the White House basically sat on those recommendations because President Trump didn't want to antagonize President Erdogan. So are you saying that that is not true?
ASSISTANT SECRETARY FORD: I don't think we're in a position to unpack the alleged or actual internals of our deliberative process for you. What we can do is describe why we have taken the moves that we have and what those moves are, and I think we've done that today.
MR BROWN: Okay, thanks. I understand our briefers have to break away for follow-on meetings. Thank you both for taking the time today to talk to us about this important step, and for everyone who joined the call. Have a great afternoon.
MR PALMER: Thanks very much for putting this together. Appreciate it.
ASSISTANT SECRETARY FORD: Thanks, everyone.
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