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Turkey has until next month to cancel a messy multibillion-dollar Russian arms deal or face harsh US penalties

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Wednesday, 22 May, 2019, 15:15
Turkey has until next month to cancel a messy multibillion-dollar Russian arms deal or face harsh US penalties

Turkey has a little more than two weeks to decide whether to complete a complex arms deal with the U.S. or risk severe penalties by going through with an agreement to buy a missile system from Russia, according to multiple people familiar with the matter.

As it stands now, the U.S. State Department’s current offer is the final one, multiple sources who spoke on the condition of anonymity told CNBC when asked whether the deadline had room for more extensions.

Turkey, a NATO member, is slated to receive the Russian-made S-400, a mobile surface-to-air missile system, next month. The S-400 is said to pose a risk to the NATO alliance as well as the F-35, America’s most expensive weapons platform.

“NATO countries need to procure military equipment that is interoperable with NATO systems. A Russian system would not meet that standard,” said a U.S. State Department official who requested anonymity given the sensitivity of the matter.

“We underscore that Turkey will face very real and negative consequences if it completes its S-400 delivery,” the official added.

In 2017, Ankara brokered a deal reportedly worth $2.5 billion with the Kremlin for the S-400 despite warnings from the U.S. that buying the system would come with political and economic consequences.

In multiple efforts to deter Turkey from buying the S-400, the State Department offered in 2013 and 2017 to sell the country Raytheon’s Patriot missile system. Ankara passed on the Patriot both times because the U.S. declined to provide a transfer of the system’s sensitive missile technology.

All the while, Turkey has become a financial and manufacturing partner for Lockheed Martin’s F-35 jet, the world’s most advanced fighter.