Turkey: Where Does The Law Stand In S-400 Versus F-35 Case?

A long-standing discussion on Turkey's S-400 surface to air missile system ('S-400') procurement from the Russia is again a topical issue in Turkish-US relations while parties are continuing to negotiate.  Several NATO Allies, notably the United States, have been nudging Turkey many times through hectoring speeches although the arguments were not entirely based on legal perspective. Considering spoken countermeasures against the Turkey, such as sanctions, it is easy to say that the effect on the ongoing F-35 Joint Strike Fighter Program ('the F-35 Program') would be somehow legally complicated. In our article we highlight some issues from legal perspective   apart from political discussions.

Public Procurement Policy of NATO

NATO Support and Procurement Agency ('NSPA') is in charge of obtaining required goods and services for NATO. In order to become a contractor, one must be located in one of the NSPO nations1. However, this obligation only applies to the procurement of the Organization and no NATO policy binds any member state to procure its defense goods and services for they requirements. Supporting to this legal fact, NATO Secretary-General Jen Stoltenberg, addressing the political discussion between Turkey and the U.S has recently expressed that acquiring equipment is a national decision2.

Defense-related goods and services are becoming more complex day by day. Integration of a defense product to the defense system is one of the issues that must be dealt properly and in long estimated perspective. Additionally, the protection of intellectual property rights regarding involved technology and the ownership rights seem to be a potential problem as well. Therefore, the lack of a similar NATO level policy on the procurement of defense-related goods and services paves the way for the possibility of conflicting interests between allies.

Discussions Through Countering America's Adversaries Through Sanctions Act

On 2 August 2017, the President of the United States has signed a federal law, Countering America's Adversaries Through Sanctions Act ('the CAATSA') which imposes sanctions on Iran, North Korea, and Russia. Pursuant to 231st Section of the CAATSA, the President shall impose certain sanctions to a person (individual or entity) knowingly engages in a significant transaction with a person that is part of, or operates for or on behalf of, the defense or intelligence sectors of the Government of the Russian Federation. President Trump also issued the Executive Order no. 13849 which authorizes the Secretary of State in consultation with the Secretary of the Treasury on the implementation of certain sanctions set forth in the CAATSA.

The President may choose more than five of possible sanctions from a menu of twelve sanctions regulated under 235th Section of the CAATSA. The menu of sanctions is broad in scope and appropriate ones shall be decided by the United States in proportion to the situation. These sanctions include but not limited to prohibitions concerning property transactions, export license restrictions, export-import bank assistance restrictions, debt and equity restrictions, visa ramifications for corporate officers, and United States government procurement prohibitions.

A major transfer of funds to the Russian defense sector is regarded as a significant transaction. Members of Congress have publicly said that any transfer of an S-400 to anybody would constitute a significant transaction3 that may lead to questions of where Turkey would stand against possible sanctions for procurement of S-400 missile system.

The first date of imposing sanctions by the United States was January 29, 2018. The United States has already imposed several sanctions on the Chinese entity Equipment Development Department ('EDD') and its director, Li Shangfu, following their transaction of Su-35 combat aircraft and S-400 missile system related equipment4. The implied sanctions were the denial of export licenses, prohibitions on foreign exchange transactions under United States jurisdiction, prohibitions on transactions with the United States financial system, designation on the List of Specially Designated Nationals and Blocked Persons, denial of a visa for EDD's director, Li Shangfu.

According to the US Department of Defense, Turkey's acquisition of S-400 may have a negative impact on Turkish participation in the F-35 Program5. To date, the United States only postponed delivery of F-35s to Turkey. However, Turkey is not only a purchaser of F-35s. Turkey is one of the fourteen consortium partners of the F-35 Program for more than a decade6. Turkish defense industry contributes to the project with 8 different entities, including some of whom are the sole source7. Cutting of Turkey from the program may have troubling consequences for both parties and much more to the future of the F-35 Program

Although the CAATSA enables the US Government to impose sanctions on countries that engage in a significant transaction with the Russian defense sector, its implication shall not be regarded retrospective. According to Section 1-c of the Executive Order no. 13849 'prohibitions apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the date of this order.' Implying sanctions on Turkey and Turkish companies that effects their long-standing business would impair legal certainty. The rights and items granted by Turkish companies before any possible sanction decision date may further result with the claims of ownership rights and further from the legal perspective.

Footnotes

1 NSPO nations are counted as: Albania, Belgium, Bulgaria, Canada, Croatia, Czech Republic, Denmark, Estonia, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Turkey, United Kingdom, and the United States of America, https://www.nspa.nato.int/en/organization/procurement/procurement.htm , (accessed: 13.3.2019)

2 Jen Stoltenberg's remarks on the topic may be reached by following links: https://www.nato.int/cps/en/natohq/opinions_152629.htm?selectedLocale=en, https://www.nato.int/cps/en/natohq/opinions_158078.htm?selectedLocale=en , https://www.nato.int/cps/en/natohq/opinions_163394.htm?selectedLocale=en (accessed: 13.3.2019)

3 U.S. Department of State, Press Release on Previewing Sanctions Under Section 231 of the Countering America's Adversaries Through Sanctions Act of 2017 (CAATSA), 20 September 2018, https://www.state.gov/r/pa/prs/ps/2018/09/286083.htm

4 U.S. Department of State, Fact Sheet on CAATSA Section 231: Addition of 33 Entities and Individuals to the List of Specified Persons and Imposition of Sanctions on the Equipment Development Department, 20 September 2018, https://www.state.gov/r/pa/prs/ps/2018/09/286077.htm

5 Department of Defense Office of Prepublication and Security Review, FY19 NDAA Sec 1282 Report: Status of the U.S. Relationship with the Republic of Turkey, 26 November 2018

6 Related information can be accessed via: https://f35.com/global/participation/turkey

7 For a more detailed information please visit: https://f35.com/global/participation/turkey-industrial-participation

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions