The Trojan dragon – revisited (possibly not for the last time)

Since Ankara announced on Sept. 26 that it would award its multibillion-dollar contract to build the country’s first long-range air and anti-missile defense system to a Chinese bidder that happens to be on a U.S. sanctions list, I have written four articles in this column. 

The last two articles of the Trojan dragon series (“A Turkish Great Wall between China and the U.S.” - I and II - on Nov. 20 and 22) basically warned of the possible consequences of U.S. retaliation if Turkey insisted on: A) building the China-led system on Turkish (NATO) soil, and B) worse, attempting to make the Chinese system interoperable with U.S./NATO air defense assets stationed in Turkey. Here are some excerpts: 

“Basically, U.S. laws apply to U.S. officials, citizens and companies. But they may very directly target any entity doing business with the blacklisted companies, including (the Chinese contractor) CPMIEC, and/or with the U.S., or using U.S.-controlled technology. Clearly, this is an embargo on any military or dual-use U.S. technology, equipment or know-how to be used in conjunction with any military program where a blacklisted company is involved... 

“What does all that mean for the presumably large number of Turkish defense companies that would work with CPMIEC on the air defense program, should an eventual deal be signed? First of all, under U.S. laws, any Turkish company, person or persons involved with CPMIEC’s work in Turkey would face the complete and automatic rejection of any use of U.S. technology or equipment in relation to the air-defense program… 

“Apparently, any Turkish company involved in the CPMIEC-led work to build an air defense architecture would automatically become a ‘suspect’ for the U.S. government, with possibly serious corporate/legal consequences… 

“Perhaps not many defense bigwigs in Ankara are totally aware of it, but Turkish companies and their personnel will have to fully cooperate with the U.S. government to assess if CPMIEC provided any items containing U.S. goods or technology… 

“Turkish companies working on U.S. products or technology will be subject to intense scrutiny, and may be requested to comply with stringent security measures to ensure a Chinese wall exists between U.S. technology-related activities and CPMIEC.” 

A few weeks had barely passed when Merrill Lynch, a U.S. investment banker, pulled out of a joint venture to advise military electronics specialist Aselsan, a potential prime contractor of CPMIEC, on a secondary listing on the Istanbul bourse. The U.S. bank had reasoned that it could fall into the sanctions zone if it did business with a company that potentially worked with a Chinese company on a U.S. sanctions list. Simple. 

Then came another hit, this time from the U.S. Congress. If the 2014 U.S. defense spending bill goes through as proposed, it will ban the use of U.S. funding to integrate Chinese missile defense systems with U.S. or NATO systems. That means the U.S., NATO’s biggest sponsor, clearly does not want to finance something it deems hostile against allied defense. 

Is that the end of the world for the Turks? No, but it may not be the end of U.S. sanctions on Turkish business that may be related, in any way, to the intended Turkish-Chinese air defense architecture on NATO territory. Do the Turks care too much? No, but they’d better do so. 

At the end of the day, Turkey has every liberty, as a sovereign state, to cooperate with even North Korea to build air defenses. All the same, it simply cannot make a North Korean (or Chinese) system interoperable with NATO air defense assets or expect NATO financing for that, or even expect Turkish companies to avoid U.S. sanctions because they work with a Chinese company on U.S. sanctions list.
Fair game. 

These days, perhaps, the Turks who will make the final decision on the air defense program should read more about any analysis containing the words “Senkaku, Diaoyu, islands, U.S. and B-52 bombers.”