Defying Limits : Türkiye’s Defence Industry and the Challenge of US Sanctions

As it is known, economic sanctions, a powerful tool of influence in international relations, can act as a ‘weapon’ with significant direct and indirect impacts. These measures often leave profound marks on the targeted country, particularly in sensitive sectors such as the defence industry. In the case of Türkiye, the history of its defence sector reveals several critical turning points shaped by external pressures, especially sanctions. 

The sanctions imposed by the United States on Türkiye's defence industry extend far beyond the well-publicized 2020 measures under the Countering America's Adversaries Through Sanctions Act (CAATSA). For decades, Türkiye has faced both official and unofficial embargoes and restrictions from the U.S., influencing its military modernization efforts and strategic autonomy. 

This article will explore the history of U.S. sanctions on Türkiye’s defence sector, analyze their impact on the country’s military capabilities and industrial development, and offer potential strategies for mitigating these challenges moving forward.

History of US Sanctions on Türkiye 

The history of US sanctions on Türkiye’s defence sector reflects a complex relationship shaped by geopolitical events and strategic disagreements. The first direct attempt to influence Türkiye's defence policies through sanctions dates back to 1975, marking a turning point in bilateral relations. However, the more recent CAATSA sanctions in 2020 differ significantly in their scope, motivation, and impact. 

The roots of these tensions trace back to the Cyprus Peace Operation on July 24, 1974, which Türkiye launched to halt inter-communal violence on the island. Following the operation, approximately 30% of Cyprus came under Turkish control, triggering diplomatic backlash from the United States. In response, the US Congress initiated embargoes designed to restrict Türkiye’s access to military equipment and technology. Although Presidents Ford and Kissinger initially vetoed these measures, the embargo was finally approved on December 11, 1974, taking effect on February 5, 1975. 

Interestingly, this was not the first instance of diplomatic pressure from the US regarding Cyprus. As early as 1964, US President Lyndon B. Johnson warned Türkiye through a letter to then-Prime Minister İsmet İnönü, discouraging any military intervention on the island. Additionally, Türkiye's decision in 1974 to reauthorize the cultivation of poppy, previously banned under US pressure, further strained relations. However, it was the Cyprus Peace Operation that provided the main pretext for the sanctions imposed in 1975. 

In terms of consequences, the 1975 embargo exposed the dangers of foreign dependency in critical areas of national security but also served as a catalyst for a profound transformation in Türkiye’s defence industry. In response, Turkish society rallied around the idea of self-reliance. A powerful esprit de corps emerged, fostering unity between the public and state institutions. Local tradesmen formed aid committees, and donations poured in for military causes, such as the Turkish Air Force and Navy Foundations. Newspapers listed the names of donors, and workers even donated their daily wages to support the military. Although the financial contributions were modest, military personnel and engineers from the period highlight the immense psychological impact—boosting national self-confidence and inspiring a movement toward domestic production in defence. 

This national momentum gave rise to key institutions that still play a pivotal role in the Turkish defence industry today: 

• ASELSAN (1975): Established to meet the communication needs of the Turkish Armed Forces. 

• HAVELSAN (1982): Focused on defence technology, simulation, software, and cybersecurity. 

• ASPİLSAN (1981): Created to address the military’s fuel and energy needs. 

• ROKETSAN (1988): Founded to develop rocket and missile systems for the armed forces. 

Despite these efforts, it became evident that the early domestic initiatives were not sufficient to cover the defence industry gap. In 1985, the state established the Defence Industry Development and Support Administration (SaGeB) under the Ministry of National Defence to better organize and coordinate these efforts. After constitutional reforms in 2017, the administration was restructured as the Presidency of Defence Industries (SSB), a move solidified in 2018 under Decree Law No. 703. 

The 1975 embargo marked a significant moment, awakening a national consciousness about the need for self-sufficiency in defence. However, it was not until the post-Cold War era that Türkiye was able to implement a more systematic approach to its defence sector, laying the foundations for its modern capabilities. 

While Türkiye experienced periodic sanctions and restrictions from Western states over the years, no large-scale measures comparable to the 1975 embargo were imposed until 2020. That year, the US sanctioned Türkiye under Article 231 of the Countering America’s Adversaries Through Sanctions Act (CAATSA). The sanctions targeted the Presidency of Defence Industries (SSB) following Türkiye’s decision to purchase the S-400 missile defence system from Russia’s Rosoboronexport (ROE). 

CAATSA, enacted by the US Congress in 2017, aims to impose sanctions on individuals and entities involved with Iran, North Korea, and Russia. The law outlines 12 areas of sanctions, ranging from restrictions on loans and trade to travel bans and asset freezes: 

1. Withholding export-import bank support 

2. Denial of export licenses for goods and technology 

3. Blocking loans from US financial institutions 

4. Halting loans from international financial institutions 

5. Prohibiting direct access to the US Federal Reserve 

6. Banning participation in US government tenders or contracts 

7. Restricting foreign currency transactions 

8. Blocking payment or credit transfers between banks 

9. Prohibiting ownership of real estate in the US 

10. Preventing capital or debt exchanges with sanctioned entities 

11. Imposing travel bans on sanctioned individuals 

12. Sanctioning senior officials of targeted entities 

The first seven sanctions are the most severe, as they can effectively cripple a targeted economy. However, the five sanctions selected against Türkiye were less severe and largely symbolic. Analysts argue that these sanctions were more about political signaling than practical harm, given the ongoing tensions between Türkiye and the US. 

Despite initial fears, the CAATSA sanctions did not cripple Türkiye’s defence industry as expected. While some delays occurred in subsystem production for ongoing projects, companies like ASELSAN provided effective solutions to these challenges. Notable domestic developments, such as the Steel Dome Air Defence System and advanced surveillance systems for UAVs, illustrate Türkiye’s growing self-reliance in key technologies. Similarly, progress in naval systems demonstrates that the sanctions inadvertently accelerated local innovation. 

Unlike the 1975 embargo, the CAATSA sanctions did not ignite the same level of public unity or mass support movements. However, the Turkish defence industry managed to maintain its upward trajectory, with increased exports, start-ups, and R&D efforts highlighting its resilience. Some analysts suggest that the sanctions even had a reverse effect, reinforcing Türkiye’s determination to reduce foreign dependency and advance its indigenous capabilities. 

Development Process of the Turkish Defence Industry in Recent Years 

In recent years, Türkiye's defence industry has expanded far beyond unmanned aerial vehicles (UAVs), advancing across multiple domains—air, land, and sea. The industry has developed a wide array of indigenous products, ranging from high-performance helicopters and tanks to advanced naval vessels. Key achievements in the air sector include the T129 ATAK helicopter, the Anka UAV, the Hürkuş training aircraft, the Kızılelma unmanned combat aircraft, and the national fighter jet, Kaan. On land, the Altay main battle tank, BMC Kirpi mine-resistant ambush-protected vehicle, the TULPAR 6×6 armoured personnel carrier, the Kaplan MT medium-weight tank, and the Çelik Kubbe air defence system exemplify Türkiye’s capabilities. At sea, the Milgem and Ada-class corvettes, the TCG Anadolu amphibious assault ship, and the ARES 150 HERCULES offshore patrol vessel stand out. 

These platforms are outfitted with cutting-edge avionics, communications, electronic warfare, and weapons systems, many of which are developed using domestic resources. Beyond supplying the Turkish Armed Forces, these products are exported globally, with Turkish defence firms operating in more than 170 countries. Prominent buyers include Azerbaijan, the United Arab Emirates, the Philippines, Qatar, Pakistan, Poland, and Ukraine. Türkiye’s exports have also gained traction in Central Asia, with Kazakhstan, Uzbekistan, and Turkmenistan becoming major clients. 

This international demand has translated into impressive financial growth. In 2023, Turkish defence exports exceeded $5.5 billion, marking a 27% increase compared to 2022. Baykar, the manufacturer of the renowned Bayraktar drones, led the way with exports totaling $1.77 billion. With such strong momentum, experts expect Türkiye’s presence in the global defence market to continue growing. 

The success of Turkish defence firms has also been recognized internationally. In 2023, four Turkish companies ranked among the world’s top 100 defence companies in the annual Defense News list. ASELSAN ranked 47th, TAI (Turkish Aerospace Industries) 58th, Roketsan 80th, and ASFAT, a state-owned defence contractor, entered the list for the first time at 100th place. Notably, ASFAT recorded a remarkable 149% increase in revenue, reflecting Türkiye’s rapid progress in the sector. 

The foundation for this growth lies in Türkiye's strategic efforts to develop a robust defence ecosystem. Since the mid-2000s, Türkiye has prioritized domestic production, leading to significant increases in both the number of companies and projects. The number of defence firms has grown from 56 to 2,700, while the number of active projects has risen from 62 to 750. This ecosystem fosters collaboration among state enterprises, private industry, and research institutions, creating a dynamic environment for innovation. 

However, the path to progress has not been without challenges. Türkiye's more assertive and independent foreign policy has sparked tensions with some Western countries, leading to embargoes and sanctions on defence exports. Operations such as Peace Spring in northern Syria, the purchase of Russian S-400 missile systems, and Türkiye's support for Azerbaijan during the Second Karabakh War prompted several Western nations—including the US, Germany, and the UK—to restrict arms exports to Türkiye. 

One notable case is Canada’s suspension of defence exports to Türkiye following the Peace Spring operation in 2019. This embargo was briefly lifted, but in 2020, Canada re-imposed restrictions after discovering that Turkish-supplied UAVs had been used by Azerbaijan during the Karabakh conflict. As a result, the sale of the WESCAM MX-15 camera system, which had been used in Bayraktar drones, was halted. Türkiye responded by integrating ASELSAN's domestically developed CATS camera systems into its UAVs, demonstrating its ability to mitigate the impact of external restrictions. 

Similarly, Türkiye faced setbacks with the German-made MTU engines intended for the Altay main battle tank. Following the 2019 Peace Spring operation, the German government suspended the export of these engines, forcing Türkiye to seek alternative suppliers. In October 2021, Türkiye reached an agreement with South Korea to supply engines, and by April 2023, the first Altay tanks were delivered to the Turkish Armed Forces for testing. Despite the embargo, Germany maintained its cooperation with Türkiye on the Milden submarine project, highlighting how some nations balance sanctions with their strategic interests. 

In other cases, shifting geopolitical priorities have led to the lifting of embargoes. For example, Finland, which had imposed an arms embargo on Türkiye in 2019, was compelled to reverse this decision in 2023 to facilitate its NATO membership. Similarly, the UK lifted its restrictions in May 2022, opening the door for renewed cooperation. British companies have shown particular interest in Turkish UAVs, and BAE Systems’ technical support for the Kaan fighter jet project illustrates the deepening ties between the two nations. In December 2022, 49% of BAE Systems Türkiye’s shares were transferred to Nurol Holding, making it a fully Turkish-owned company—an example of the growing role of private initiatives in the defence sector. 

These developments underscore the resilience of the Turkish defence industry, which has consistently adapted to external pressures while maintaining its upward trajectory. As Türkiye continues to navigate complex international dynamics, it remains focused on strengthening its indigenous capabilities and expanding its global footprint in the defence sector. 

Observations, Recommendations, and Future Prospects of Türkiye’s Defence Industry 

Sanctions and embargoes, often referred to as economic warfare, have evolved into one of the most strategic tools nations use to influence others without resorting to armed conflict. The war between Russia and Ukraine has further transformed these mechanisms, underlining the importance of a robust defence industry for national sovereignty and resilience. As Türkiye continues to expand its defence capabilities amidst external pressures, several key observations and recommendations emerge regarding its challenges, strengths, and the future roadmap. 

Key Observations 

1. Technological Superiority Triggers Embargoes: 

Countries that achieve technological breakthroughs in defence often face embargoes and sanctions, as seen in Türkiye’s experiences with the development of UAVs, its acquisition of the S-400 missile system, and its independent foreign policy. Such actions by Western powers demonstrate how technological advances can provoke restrictions. This underscores the need for Türkiye to prepare for potential obstacles whenever it makes strides in critical technologies. 

2. Deficiencies in Human Resources and Knowledge Transfer: 

Despite notable achievements, the Turkish defence industry faces a shortage of qualified engineers, researchers, and personnel with tacit knowledge—skills that are not easily documented but are crucial for innovation. The challenge lies not only in attracting talent but also in retaining it over time to ensure continuity. Developing collaborative ecosystems among academia, industry, and the government is essential to address this gap. 

3. The Importance of Domestic and National Development: 

Relying on foreign suppliers exposes Türkiye to external vulnerabilities. Recent embargoes have demonstrated the risks of dependency, especially in areas such as engines and key subsystems. To mitigate these risks, the Turkish defence industry must adopt a comprehensive strategy that emphasizes local production and self-reliance across all components of its systems. 

4. Software and Sensor Technologies as Key Development Areas: 

The rapid evolution of warfare highlights the increasing role of software-driven systems and sensor technologies. UAVs, unmanned combat vehicles, and precision weapons depend heavily on advanced algorithms and sensor integration. Türkiye must prioritize research and development (R&D) in these areas to maintain its competitive edge. 

5. Challenges in Standardization and Reverse Engineering: 

Countries that dominate global defence markets also shape international standards, which gives them strategic leverage. Türkiye must work towards becoming a "standard-writing" nation by developing indigenous platforms and influencing global norms. Additionally, the role of reverse engineering—studying foreign technologies to develop local alternatives—should be explored as a potential strategy for overcoming embargoes. 

Recommendations for the Future 

1. Developing Domestic Engines and Power Systems: 

The embargo on engines for the Altay tank and other platforms has exposed Türkiye’s vulnerability in this area. Developing indigenous engines and propulsion systems must become a priority. Building partnerships with countries such as South Korea and expanding in-house capabilities are key steps, but long-term efforts should focus on fully independent production. 

2. Strengthening Human Resources and Tacit Knowledge: 

Türkiye must invest in education, training programs, and R&D initiatives to cultivate a pool of highly skilled engineers and defence experts. Collaboration between universities, research institutes, and the private sector will be essential in nurturing "tacit knowledge" that cannot be easily transferred but is vital for innovation. Creating incentives for young professionals to remain in the defence sector will also ensure continuity. 

3. Fostering a Culture of Collaboration and Continuity: 

One of the primary challenges facing the Turkish defence industry is the need for sustained collaboration among stakeholders. This requires long-term planning and continuity across political, military, and industrial institutions. Establishing a comprehensive framework that aligns the goals of the state with those of the private sector will ensure that projects are not disrupted by political or economic changes. 

4. Targeting Critical Technologies for Strategic Independence: 

Türkiye must identify key technologies that will shape the future of warfare—such as artificial intelligence, hypersonic systems, and quantum communications—and invest in their development. By focusing on these critical areas, the country can reduce its dependence on foreign suppliers and enhance its strategic autonomy. 

5. Focusing on UAVs and Sensor Technologies: 

UAVs have already given Türkiye a competitive advantage on the battlefield and in the global defence market. However, further advancements are needed to maintain this edge. Expanding capabilities in UAV sensor technologies, autonomous systems, and swarm technology will be crucial. These developments will not only enhance national defence but also boost exports. 

6. Achieving Standard-Setting Capabilities: 

To become a significant player in the global defence industry, Türkiye must work towards setting international standards. This involves developing indigenous platforms that meet or exceed global norms, thus influencing the defence supply chain at a strategic level. By doing so, Türkiye can enhance the competitiveness of its products and ensure better market access. 

7. Exploring Reverse Engineering as a Strategic Option: 

Reverse engineering can play a critical role in developing alternative systems when access to foreign technology is restricted. Türkiye has successfully implemented this approach in the past, and it should continue to explore its feasibility in areas such as engines, avionics, and missile technologies. 

8. Building Global Partnerships and Diversifying Markets: 

Türkiye’s ability to maintain an independent foreign policy depends on diversifying its defence partnerships and export markets. Strengthening ties with non-Western countries and regional allies will reduce reliance on any single bloc. Strategic partnerships, such as those with Qatar, Azerbaijan, and Pakistan, provide both economic and political benefits. 

Conclusion 

The development of the Turkish defence industry reflects both resilience and adaptability in the face of sanctions and embargoes. Historical challenges—such as the 1975 US arms embargo and recent restrictions under CAATSA—have shaped Türkiye’s path towards greater self-sufficiency. From the establishment of ASELSAN and TAI to the emergence of UAV giants like Baykar, Türkiye has demonstrated its ability to turn obstacles into opportunities. 

However, the road ahead requires sustained effort and strategic focus. To secure its place as a global defence power, Türkiye must invest in critical technologies, address gaps in human resources, and build an industrial ecosystem that emphasizes collaboration and continuity. Developing domestic engines, expanding software and sensor technologies, and setting international standards will be essential to overcoming future challenges. 

While embargoes and restrictions may remain part of the geopolitical landscape, Türkiye’s strategy of domestic development and diversification will ensure it can continue to thrive. By fostering innovation, nurturing talent, and expanding partnerships, the Turkish defence industry is well-positioned to maintain its upward trajectory and secure its place among the world’s leading defence exporters.