How does the Countering America's Adversaries Through Sanction Act, P.L. 115-44 (August 2, 2017) (CAATSA) work? Why can't the US sanction every importer of Russian arms across the board? Arms exports fund Putin's war machine even more directly than, say, oil exports
The simple high-level answer to the "why can't" question is that the executive branch can only do that which is allowed under the law passed by Congress. So what does CAATSA Title II allow? There is an extensive FAQ on the Treasury website, and the first question they answer explains that
Section 223(a) of CAATSA does not require the imposition of sanctions. While sanctions may be imposed on potential targets in any sector of the economy of the Russian Federation in the future, maintaining unity with partners on sanctions implemented with respect to the Russian Federation is important to the U.S. government. The point of the sectoral sanctions is to impose costs on the Russian Federation for its aggression in Ukraine.
In other words, may, not must.
Notwithstanding any other provision of law, before taking any action described in paragraph (2), the President shall submit to the appropriate congressional committees and leadership a report that describes the proposed action and the reasons for that action
which precludes a unilateral / universal declaration of sanctions against all entities who import arms from Russia. This requires a "case by case" justification of any action, including an indication whether the action
is not intended to significantly alter United States foreign policy with regard to the Russian Federation
Sanctions are possible, but you have to report to Congress what and why, and that plus all of the other informational requirements requires more targeted use of CAATSA. But there is also a congressional approval requirement (Part 1 of the act which contains §216 is entitled "Congressional Review Of Sanctions Imposed With Respect To The Russian Federation").
There are mandatory sections of the law, for example the act modified the Ukraine Freedom Support Act of 2014 (22 U.S.C. 8924)
by striking ‘‘may impose’’ and inserting ‘‘shall impose, unless the President determines that it is not in the national interest of the United States to do so’’
but that section only applies to foreign financial institutions.
This does not mean that Congress couldn't pass a different law with the effect you describe, just that CAATSA is not that law.