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OFAC Adds New Officials to Nicaragua Sanctions Regime

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The US has expanded its sanctions regime against Nicaragua with six officials connected to the Nicaraguan government being targeted, including the country’s Minister of Defense, and telecom and mining executives. 

The move comes as Nicaragua inaugurates its new President and Vice President, following an election that President Joe Biden has described as a “pantomime” and “rigged”.

According to Nicaragua’s election authority, President Ortega won the vote with about 75% of the ballots cast. The election took place after eight presidential candidates were arrested on treason charges. 

One candidate was arrested for alleged money laundering based on the law “against money laundering, terrorist financing and proliferation of weapons of mass destruction adopted in July 2018”. A spokesperson for the United Nations High Commissioner for Human Rights, later said: “This broadly-worded law has raised general concerns that it may be used to silence dissent.” 

The Office of Foreign Assets Control’s (OFAC) sanctions, imposed in alignment with the EU – which in January sanctioned seven Nicaraguan individuals and three entities – are the latest example of globally-coordinated sanctions related to human rights and democracy. 

The six officials targeted include Nicaraguan Minister of Defense Rosa Adelina Barahona De Rivas, and members of the military, Bayardo De Jesus Pulido Ortiz and Bayardo Ramon Rodriguez Ruiz, who are all cited for state acts of violence. 

Telecom executives Celina Delgado Castellon and Nahima Janett Diaz Flores, from state-run Telco, were sanctioned for targeting the media in order to silence dissent. OFAC noted that Meta – formerly Facebook – shut down a troll farm containing more than 1,000 social-media accounts run by the Ortega government that supported the regime while slamming the opposition.

OFAC also sanctioned Ramon Humberto Calderon Vindell, president of the board of directors of state mining company ENIMINAS, for channeling gold mining profits to allies in the private sector.

All six will now be subject to measures including:

  • All property and interests in property in the US or in the possession or control of US persons are blocked and must be reported to OFAC 
  • Any entities that are owned, directly or indirectly, 50% or more in the aggregate by one or more of such persons, are also blocked 

OFAC said the sanctions were not intended to be permanent, but were issued to encourage a positive change of behavior and would be removed if “concrete and meaningful actions” were observed.

“The United States and our partners are sending a clear message to President Ortega, Vice President Murillo, and their inner circle that we continue to stand with the Nicaraguan people in their calls for the immediate release of these political prisoners and a return to democracy,” said Under Secretary for Terrorism and Financial Intelligence Brian E. Nelson.

Coordinated US Government Action

Complimenting OFAC’s actions, the Department of State will also impose visa restrictions on 116 Nicaraguan individuals, including mayors, prosecutors, and university administrators; and police, prison, and military officials, who were all “complicit in undermining democracy in Nicaragua.”

These latest sanctions strengthen measures imposed on the US’ near neighbor by a Trump-era Executive Order. This was introduced following protests in Nicaragua in 2018, which Ortega’s government responded to with the “use of indiscriminate violence and repressive tactics against civilians” sparking international condemnation. Since 2018, more than 100,000 Nicaraguans have fled the country.

US firms should already class Nicaragua as a high-risk country due to historic Executive Orders, but this announcement reaffirms the importance of additional due diligence measures on persons/entities based in Nicaragua, and particularly those involved with state-owned companies.

Comprehensive politically exposed person (PEP) screening, real-time sanctions updates and adverse media checks are all critical – the latter particularly given widespread news and social media coverage of the events in Nicaragua. OFAC’s 50% rule also means that assets do not need to be wholly or directly owned by a sanctioned person to come under the scope of the sanctions regime. PEP and adverse media screening together can help with this, helping firms identify an individual who may serve as a nexus for multiple suspicious actors. 

While the US and EU are coordinating their response to Nicaragua, it should also not be assumed that sanctions imposed by both are going to target exactly the same people or entities. Firms should ensure they’re screening against all relevant sanctions lists.

To help firms navigate the complex sanctions landscape in Nicaragua, OFAC has developed comprehensive guidance

Find out more about the state of financial crime in 2022 by pre-registering for this year’s report.

Originally published January 20, 2022, updated February 10, 2022

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