UPDATE - 'Turkish defense industry will continue to advance'

REVISED HEADLINE, DECK; UPDATED WITH ANALYSTS’ COMMENTS

By Gokhan Ergocun and Aysu Bicer

ANKARA / ISTANBUL (AA) - Despite new US sanctions, Turkey's defense industry will continue to move forward, the head of the country's Defense Industries Presidency (SSB) said on Tuesday.

One day after the US announced sanctions over Ankara's purchase of Russian air defense hardware, Ismail Demir said: "The development of the domestic industry will continue, perhaps even faster. In a sense, this [sanctions] will serve as a flare and a warning."

"We expect this not to affect our relationships too much," Demir told reporters after speaking to parliament.

The US on Monday imposed sanctions on Turkey over its purchase of the Russian S-400 missile defense system.

The sanctions, coming under the Countering America's Adversaries Through Sanctions Act (CAATSA), target the SSB, including Demir and three other officials.

Underlining Turkey's nearly 70-year NATO membership, Demir said Ankara has relations with fellow member the US in several areas.

He added that both sides aim to continue these relations.

In April 2017, when its protracted efforts to buy an air defense system from the US proved fruitless, Turkey signed a contract with Russia to acquire the S-400 shield.

US officials have voiced opposition to their deployment, claiming they would be incompatible with NATO systems and would expose next-generation F-35 jets to possible Russian subterfuge.

Turkey, however, stressed that the S-400 would not be integrated into NATO systems, and posed no threat to the alliance or its armaments.

It has repeatedly urged a working group to clear up the technical compatibility issues.

- Turkey may get upper hand

Arda Mevlutoglu, a defense policy analyst, said under the sanctions, the SSB is prohibited from getting US export licenses, which means Turkey must find alternatives for some projects.

The sanctions also block some avenues of financing for the SSB, he said, adding that countries and firms which have close ties with the US could avoid dealing with the SSB.

The US sanctions may affect the country's defense industry and exports negatively in the short-term, but the country's defense sector will gain strength in the medium-term, he underlined.

Turan Oguz, a defense analyst, said Turkey was the first NATO member country to face US sanctions under the CAATSA law.

Starting on Jan. 20, the incoming Joe Biden administration may also bring changes in policy – positive or negative – and the US sanctions could also trigger sanctions from the EU, he added.

He underlined that the sanctions should not affect existing projects, such as the T70 helicopter, but the Pakistan Atak helicopter and Hurjet aircraft projects will probably be affected, he said.

The sanctions will slow down Turkish defense projects related to the US for a short period, but the Turkish defense industry will take advantage of this process and manage to take over production of all critical parts in the long term, he stressed.