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US Announces Nicaragua Sanctions Under Executive Order 13851
Practical Law Legal Update w-017-9495 (Approx. 4 pages)
US Announces Nicaragua Sanctions Under Executive Order 13851
by Practical Law Commercial Transactions
| Published on 06 Dec 2018 • USA (National/Federal) |
On November 27, 2018, the US Department of the Treasury's Office of Foreign Asset Control (OFAC) issued financial sanctions against Nicaragua pursuant to Executive Order 13851 (EO 13851) to address human rights abuses and corruption.
On November 27, 2018, the US Department of the Treasury's Office of Foreign Asset Control (OFAC) imposed financial sanctions against Nicaragua pursuant to Executive Order 13851 (EO 13851). EO 13851 aims to put pressure on the Nicaraguan government to end activities that pose a threat to the national security and foreign policy of the US, including:
- The violent response to protests that began in April 2018.
- The systematic dismantling and undermining of democratic institutions and the rule of law.
- The use of indiscriminate violence and repressive tactics against civilians.
- Corruption leading to the destabilization of Nicaragua's economy.
EO 13851
EO 13851 authorizes blocking sanctions and restrictions on travel to the US on any person determined to be:
- Responsible for or engaged in:
- serious human rights abuses in Nicaragua;
- actions or policies that undermine democratic processes or institutions in Nicaragua;
- actions or policies that threaten the peace, security, or stability of Nicaragua; or
- transactions involving deceptive practices or corruption on behalf of or related to the Government of Nicaragua (for example, misappropriation of public assets).
- A leader or official of an entity:
- that has engaged in any of these activities; or
- whose property and interests in property are blocked.
- An official of the Government of Nicaragua or one who has served as an official of the Government of Nicaragua at any time on or after January 10, 2007.
Additionally, EO 13851 authorizes the same measures against any individual or entity determined to have provided material assistance:
- For sanctionable activities.
- To parties sanctioned under EO 13851.
Finally, this order imposes sanctions on any person determined to:
- Be owned or controlled by a sanctioned person.
- Have acted or purported to act on behalf of a sanctioned person.
Blocking Sanctions
Blocking sanctions freeze all property and interests in property of the sanctioned person within US possession or control. OFAC maintains a list of blocked persons, or "specially designated nationals" (SDNs). US persons may not engage in any transaction with SDNs absent authorization or licensure from OFAC.
"US persons" means any:
- US citizen.
- Permanent resident alien.
- Entity organized under the laws of the US or any US jurisdiction.
- Person in the US.
These restrictions also apply to any entity owned 50 percent or more by a blocked person, even if the owned entity is not named on the SDN list.
Sanctions Against Nicaraguan Officials
The first two individuals targeted as SDNs under EO 13851 are two of Nicaraguan President Daniel Ortega’s closest associates:
- Rosario Maria Murillo De Ortega, the Vice President and First Lady of Nicaragua.
- Nestor Moncada Lau, who has acted as a national security advisor to the President of Nicaragua.
Individuals and businesses with interests in Nicaragua should track these developments closely, as the broad reach of EO 13851 and foreign policy strategy of the Trump Administration suggest that additional sanctions may be forthcoming. For more information on OFAC sanctions generally, see Practice Note, Export Regulation: OFAC Economic and Trade Sanctions.