Thayer Consultancy Background Briefing:

ABN # 65 648 097 123

Will U.S. Sanctions Affect
Russian Arms Sales to Vietnam?
Carlyle A. Thayer
September 12, 2018

We request your assessment of the following issues:

Q1. TASS news agency reported that Vietnam has ordered $1 billion worth of
Russian weapons but did not provide any details. Is Vietnam in the market for more
warships, fighters, tanks, and anti-aircraft missiles?
ANSWER: TASS, the Russian news agency, quoted the head of the Russian Federal
Service for Military-Technical Cooperation as stating “we have a portfolio of orders
worth more than $1 billion.” It is unclear from this statement whether the figure of
$1 billion represents orders that were placed prior to the visit by Nguyuen Phu
Trong, Secretary General of the Vietnam Communist Party to Russia or orders that
were placed during his visit. The latter seems unlikely as Vietnam’s Minister of
National Defense General Ngo Xuan Lich was not part of the official delegation.
General Lich visited Moscow in April this year and met his Russian counterpart
Generl Soigu. They agreed on a plan for defense cooperation for 2018-20 involving
high-level exchangtes, training, naval cooperation and military technology. But
media reports did not mention any new arms sales.
Until further information becomes available, it woud appear the $1 billion figure may
to contracts currently being filled, such as Vietnam’s order for sixty-four T-90S/SK
main battle banks made over a year ago, service contracts for continuing Russian
maintenance and technical support, the provision of spare parts and equipment, and
professional military education and training..
Q2. In August, President Trump signed sanctioning countries that procure arms from
Russian defence contractors that are under U.S. sanctions. What are the implications
for Vietnm’s recent orders of Russian weapons. Will Vietnam now buy American
weapons, such as the P-3 Orion marine patrol aircraft, radar, UAV, and other
advanced weapons?
ANSWER: When President Trump signed the Countering America’s Adversaries
Through Sanctions Act he issued two statements expressing his reservations about
this legislation, calling it “seriously flawed” and “clearly unconstitutional.” The
legislation includes a provision that the President can issue a waiver of sanctions if
he informs Congress. It seems unlikely President Trump will enforce the sanctions
against Russia as strongly as the U.S. Congress wants him to do.
 2

U.S. sanctions against Russia that affect Vietnam the most are directed against
Russian defense entities such as Rosoboronexport, the official state exporter of arms
and military equipment. If Vietnam enters into commercial contracts with
Rosoboronexport or other Russian defense entities on the sanctions list, it could too
be sanctioned. This may be one reason why the details of on-going and new defense
contracts between Vietnam and Russia have been kept low key and vague.
Q3. It was reported that Vietnam recently ordered U.S. $100 million in arms from the
United States. What did Vietnam order? If Vietnam continues to purchase arms from
Russia will the U.S. re-impose an arms embargo on Vietnam?
ANSWER: Vietnam has not made any major purchases of weapons or military
equipment from the United States since President Obama lifted the arms embargo in
May 2016. In August this year, the U.S. State Department reported that Vietnam had
signed contracts to buy U.S. military equipment worth $94.7 million via Foreign
Military Financing and Direct Commercial Sales. This is a small amount of money.
Vietnam is reportedly interested in purchasing another Hamilton-class ex-Coast
Guard cutter and Boeing-Insitu ScanEagle drones.
The Trump Administration is unlikely to prevent Vietnam from purchasing U.S.
weapons and military equipment for two reasons: first it views arms sales as one
method of reducing America’s trade deficit with Vietnam, and second because the
U.S. defense officials have been lobbying Vietnam to buy U.S. weapons to reduce
their dependency on Russia.
At the present time there are no indications that Vietnam plans to make any major
or “big ticket” purchases from the United States. There are reports that Vietnam
reacted negatively to U.S. pressures not to buy arms from Russia.

Suggested citation: Carlyle A. Thayer, “Will U.S. Sanctions Affect Russian Arms Sales
to Vietnam?” Thayer Consultancy Background Brief, September 12, 2018. All
background briefs are posted on Scribd.com (search for Thayer). To remove yourself
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Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.