Implications of CAATSA for India’s Defence Relations with Russia and America | Institute for...

"It is important to mention that among the 39 entities, Rosoboronexport, the Russian state-controlled intermediary for export/import of arms, also figures in the list notified on April 6, 2018 by the Office of Foreign Asset Control (OFAC) of the Department of Treasury, in pursuance of various Executive Orders, besides CAATSA.4 The significance of Rosoboronexport finding its name in the OFAC’s list is that, apart from all of its assets subject to US jurisdiction being frozen, any non-American person facilitating significant transactions with it will also be liable to face sanctions by the United States.5

It is to be noted, however, that the mere naming of 39 Russian entities by the US authorities or dealings by any country with these entities does not automatically lead to the imposition of sanctions under the CAATSA provisions. The key determinant for imposing sanctions is “significant transaction” between the named Russian entity and an outside agency. It is also important to note that the determination of what is a significant transaction is not based purely on the monetary value. As explained by the Public Guidance/Frequently Asked Questions (FAQ) issued by the State Department:

The factors considered in the determination may include, but are not limited to, the significance of the transaction to US national security and foreign policy interests, in particular whether it has a significant adverse impact on such interests; the nature and magnitude of the transactions; and the relation and significance of the transaction to the defence or intelligence sector of the Russian government."