The S-400 Knot in U.S.-Turkey Relations: Assessing the Viability of U.S. Sanctions

Turkish Prime Minister Recep Tayyip Erdoğan greets Russian President Vladimir Putin in January 2020. (President of the Russian Federation, https://tinyurl.com/y5hpqcu5; CC BY 4.0, https://creativecommons.org/licenses/by/4.0/) The U.S.-Turkey relationship fractured along numerous fault lines in recent years. President Donald Trump’s refusal to implement sanctions required by the Countering America’s Adversaries Through Sanctions Act (CAATSA) for Turkey’s purchase of Russian S-400 surface-to-air missile systems has drawn sustained bipartisan congressional ire since summer 2019. Reports suggest that the Trump administration will finally implement CAATSA sanctions as early as today in an effort to get ahead of the National Defense Authorization Act for Fiscal Year 2021 , which will require the president to implement sanctions within 30 days of the defense spending bill’s enactment. The provision in the bill will only allow sanctions relief if Turkey gets rid of its S-400s entirely, which is unlikely to occur. Sanctions on Turkey may now be inevitable, but CAATSA does offer the president a variety of options to choose from. A sophisticated U.S. sanctions regime that makes selective use of CAATSA could be an effective remedy for the S-400 problem, but it must be placed within a broader strategy to address Washington’s relations with its erstwhile NATO ally. Wielding CAATSA as a purely punitive tool would conversely fail to alter Ankara’s foreign policy, cause unjustifiable harm to the Turkish population and exacerbate existing challenges within NATO — all to the benefit of Russia, which is CAATSA’s primary target. Effective sanctions regimes require clear goals, an understanding of the target’s ability to tolerate sanctions and must offer a realistic path to relief for the sanctioned state. In crafting a sanctions regime targeting the Turkish government, it is important to not only take stock of Ankara’s vulnerabilities, but also to assess how the imposition of sanctions could actually benefit the Erdoğan administration. The Potential for a Confused Sanctions Policy Although President Recep Tayyip Erdoğan found an unprecedented ally in his counterpart President Trump, the U.S. Congress, federal departments and American civil society have grown increasingly aggravated by Ankara’s aggressive foreign policy and domestic repression. After Turkey took delivery of S-400 components in July 2019, the United States removed it from the joint F-35 stealth fighter jet program, which Washington says could be compromised by the S-400’s advanced radar . And yet, Trump repeatedly refused to implement CAATSA. Congressional will to sanction Turkey expanded even further when, following a phone call with Erdoğan in October 2019, Trump greenlit the Turkish invasion of northeastern Syria —a region controlled by the United States’s primary local partner in the fight against the Islamic State. The invasion, which had limited territorial goals, was primarily intended to weaken the Syrian Democratic Forces—which Ankara considers an extension of the insurgent Kurdistan Workers’ Party in Turkey—and its partnership with the United States. Already exasperated by Trump’s obstinate refusal to implement CAATSA sanctions on Turkey after it took delivery of S-400 components in July, Congress began to consider even harsher sanctions packages. The House quickly passed a veto-proof bill that would prohibit arms sales to Turkey, sanction senior Turkish officials involved in the offensive against the Kurds and require CAATSA implementation. Several similar bipartisan bills were proposed in the Senate before Congress made a determination in the National Defense Authorization Act for FY2020 that Turkey’s S-400 purchase is a “significant transaction” under CAATSA and stated that the President should implement sanctions. The new defense spending bill for 2021 takes the further step of requiring—rather than just strongly encouraging—implementation. The congressional desire to finally do something about Turkey is understandable, but it risks confusing the objectives of sanctions and thereby rendering them ineffective. The Broader Context of CAATSA’s Primary Goals The legal requirement to sanction Turkey is clear, but whether it would satisfy the goals of CAATSA is another matter. The law, which passed in 2017 with overwhelming majorities in both the House and Senate, was largely a response to Russia’s interventions in Ukraine, Syria and the 2016 U.S. presidential election. Turkey’s S-400 purchase falls afoul of the law because it represents a “significant transaction” with Russian state-owned arms exporter Rosoboronexport, which is a listed sanctioned entity. The failure to consistently apply the law could encourage other U.S. allies and partners to go ahead with major purchases from Russia. In November 2019, while Trump was ignoring congressional demands for Turkey sanctions, India made an $800 million advance payment to Russia for five S-400 batteries. And amidst the fallout of the U.S. airstrike that killed Iranian Maj. Gen. Qasem Soleimani in January 2020 and the subsequent Iranian missile attacks on Iraqi territory, Iraqi parliamentarians urged Iraq’s security and defense officials to also pursue purchasing S-400s from Russia. Even U.S. partners that already have comparable U.S. Patriot missile systems have now expressed interest in the S-400s. Saudi- and Emirati-operated Patriot batteries have intercepted a number of Houthi-fired tactical ballistic missiles over the course of their war in Yemen, but Saudi Arabia’s Patriot systems did not prove effective against the Iranian missile attacks that damaged major Saudi oil facilities in September 2019. Shortly after that attack, reports emerged while Saudi King Salman was visiting Moscow that the kingdom had agreed to purchase S-400s . The proliferation of potential S-400 customers supports the argument that secondary CAATSA sanctions on Turkey are necessary to maintain the law’s deterrent effect. Action against Turkey’s purchase may limit the market for Russian hardware, but other benefits would accrue to Moscow regardless. Despite concern in Washington that Turkey could further realign with Russia and China in opposition to U.S. interests, Turkey is no friend to Russia. The two countries have a long history of conflict and currently at odds in Syria , Libya and the South Caucasus . With its S-400 sale, Russia has already succeeded at exacerbating the relationship between the United States and Turkey—NATO’s two largest military powers. Turkey’s ejection from the F-35 program weakened core NATO principles of interoperability and co-production. Moscow would be happy to see the United States punish Turkey with sanctions that eliminate more U.S.-Turkish co-production and development programs and further polarize the bilateral relationship. Turkish Vulnerabilities to Sanctions and Capacity for Tolerance In September 2018, the United States imposed secondary CAATSA sanctions on China for purchasing S-400s and Su-35 fighters from Russia. The sanctions added the Chinese agency responsible for the purchase and its director, Li Shangfu, to the list of specially designated individuals with whom Americans are prohibited from doing business, forbids them from applying for export licenses and denies them access to the U.S. financial system. Similar secondary sanctions would impose significant damage on the Turkish military-industrial complex, which relies on an array of licensing agreements beyond the F-35 program. Ankara demonstrated a willingness to tolerate the multibillion-dollar loss of F-35 co-production and the corresponding planning difficulties its air force faces with no near-term alternative . However, the precarity of the Turkish economy and its deep integration with American and European markets make Turkey particularly susceptible to a wide variety of U.S. sanctions options. Primed by years of mismanagement, Ankara burned through $50 billion in foreign exchange reserves to prop up the depreciating lira, but by November the Turkish currency still lost 30 percent of its value, hitting a record exchange rate of more than eight lira to the dollar. A decade ago, the exchange rate was stable at about two-to-one. The central bank’s net foreign reserves dropped to $16.8 billion in November , down from $41.1 billion at the end of 2019. However, excluding controversial swaps with local Turkish banks, reserves are in the negative. The shakeup of the government’s economic leadership—including the surreal resignation of Erdoğan’s son-in-law, Berat Albayrak, as Minister of the Treasury and Finance—has produced some initial improvement , but the scale of the financial crisis remains significant. Erdoğan is loath to turn to the International Monetary Fund for a bailout, because the good governance conditionality of the institution’s loans would undermine the authoritarian practices and patronage networks that undergird his hold on power. Ankara’s effort to secure a swap line from the U.S. Federal Reserve in April as a short-term salve also proved unsuccessful , likely due to the country’s e
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