Section 231 of Countering America’s Adversaries Through Sanctions Act ("CAATSA") required the President to impose five or more of the 12 options afforded to her/him as stated in the section 235 of the Act (see the next paragraph) against a person the President determines knowingly engages in a significant transaction with a person that is part of, or operates for or on behalf of, the defense or intelligence sectors of the Government of the Russian Federation.
The above-referenced 12 options (menu-based sanctions) are:
Export-Import Bank Assistance For Exports To Sanctioned Persons: The President may direct the Export-Import Bank of the United States not to give approval to the issuance of any guarantee, insurance, extension of credit, or participation in the extension of credit in connection with the export of any goods or services to the sanctioned person.
Export Sanction: The President may order the United States Government not to issue any specific license and not to grant any other specific permission or authority to export certain goods or technology to the sanctioned person.
Loans From United States Financial Institutions: The President may prohibit any United States financial institution from making loans or providing credits to the sanctioned person totaling more than $10,000,000 in any 12-month period unless the person is engaged in activities to relieve human suffering and the loans or credits are provided for such activities.
Loans From International Financial Institutions: The President may direct the United States executive director to each international financial institution to use the voice and vote of the United States to oppose any loan from the international financial institution that would benefit the sanctioned person.
Prohibitions On Financial Institutions: The following prohibitions may be imposed against the sanctioned person if that person is a financial institution:
Prohibition on Designation as Primary Dealer
Prohibition on Service as a Repository Of Government Funds
Procurement Sanction: The United States Government may not procure, or enter into any contract for the procurement of, any goods or services from the sanctioned person.
Foreign Exchange: The President may, prohibit any transactions in foreign exchange that are subject to the jurisdiction of the United States and in which the sanctioned person has any interest.
Banking Transactions: The President may prohibit any transfers of credit or payments between financial institutions or by, through, or to any financial institution, to the extent that such transfers or payments are subject to the jurisdiction of the United States and involve any interest of the sanctioned person.
Property Transactions (SDNing): The President may prohibit any person from
Acquiring, holding, withholding, using, transferring, withdrawing, transporting, importing, or exporting any property that is subject to the jurisdiction of the United States and with respect to which the sanctioned person has any interest;
Dealing in or exercising any right, power, or privilege with respect to such property; or
Conducting any transaction involving such property.
Ban On Investment In Equity Or Debt Of Sanctioned Person: The President may, pursuant to such regulations or guidelines as the President may prescribe, prohibit any United States per son from investing in or purchasing significant amounts of equity or debt instruments of the sanctioned person.
Exclusion Of Corporate Officers: The President may direct the Secretary of State to deny a visa to, and the Secretary of Homeland Security to exclude from the United States, any alien that the President determines is a corporate officer or principal of, or a shareholder with a controlling interest in, the sanctioned person.
Sanctions On Principal Executive Officers: The President may impose on the principal executive officer or officers of the sanctioned person, or on persons performing similar functions and with similar authorities as such officer or officers, any of the sanctions under this subsection.
CAATSA also required the President (the President delegated the power to the Secretary of State pursuant on Sept. 29, 2017) to specify the persons that are part of, or operate for or on behalf of, the defense and intelligence sectors of the Government of the Russian Federation. Accordingly, the Dept. of State published two lists to specify such persons. Here are the lists: Link
Such sanctions pursuant to section 231 of CAATSA were once imposed against the Chinese entity Equipment Development Department (EDD) and its director, Li Shangfu, back in September of 2018. Yet, as you see below, one of the sanctions which had been chosen was the blocking sanctions (section 235a(9)), and therefore this entity unlike the Turkish one ended up on the SDN list of the U.S. Treasury.
Now in the case of Turkey, the Turkish government, in April of 2017 (prior to the passage of CAATSA) signed a contract for delivery of S-400 Triumph long-range SAM system with Rosoboronexport (an entity appearing on the Dept. of Sate's list mentioned above). In July of 2019, Rosoboronexport announced that it delivered the first batch of S-400 Triumph long-range SAM system to Turkey.
So, putting all the pieces together, the United States imposed sanctions against Turkey because it acquired S-400 system from Rosoboronexport. By getting this system, Turkey (through an institution called the Presidency of Defense Industries) knowingly engaged in a significant transaction with an entity, which is part of the defense sector of the Government of the Russian Federation. (The size of the deal was $2.5 billion.)
As to why these sanctions did not come through earlier, the Deputy Assistant Secretary for European Affairs stated “the reason why today is the day where we’re rolling this out is because that is how long the process took.”
The sanctions that the United Stated decided to impose are 2 parts:
I. Sanctions against Turkish Presidency of Defense Industries (Non blocking)
The following 5 sanctions were imposed against this governmental entity in Turkey because of its role in purchasing the S-400 system:
(1) Export Sanctions
(2) Loans from United States Financial Institutions (Prohibition on loans or credits by U.S. financial institutions totaling more than $10 million in any 12-month period.)
(3) Loans from International Financial Institutions
(4) Sanctions on Principal Executive Officers (See below)
(5) Export-Import Bank Assistance for Exports to Sanctioned Persons
II. Sanctions against individuals (Blocking)
The following 5 sanctions were imposed against 4 individuals because of their role in purchasing the S-400 system:
(1) Sanctions on Principal Executive Officers (this is because they are part of Turkish entity in charge of purchasing the system from Russia)
(2) Blocking Property and Interests In Property (SDN)
(3) Foreign Exchange
(4) Banking Transactions
(5) Exclusion of Corporate Officers (Travel ban)
Finally, as there was no blocking sanctions among the five imposed against the Turkish Presidency of Defense Industries, OFAC could not add it to the SDN list and that is why OFAC created a new list called NON-SDN MENU-BASED SANCTIONS LIST (NS-MBS LIST).