On October 24, 2022, the U.S. Department of Treasury Office of Foreign Assets Control (OFAC) and Department of State (State) announced new sanctions designations for Nicaragua, targeting a key state mining company and amending Executive Order (E.O.) 13851 to expand the U.S. government’s authority to issue sanctions in reactions to abuses by the Ortega-Murillo regime.
OFAC designated the Nicaraguan mining authority General Directorate of Mines (the Dirección General de Minas or “DGM”) as a specially designated national (SDN). DGM is a subordinate office within the Nicaraguan Ministry of Energy and Mines (MEM) and has managed most mining operations in Nicaragua on behalf of the Nicaraguan government after Empresas Nicaraguenses de Minas (ENIMINAS) was designated an SDN in June 2022. The sanctions for DGM expands the sanctions on the Nicaraguan mining sector and aim to “cut off the Ortega-Murillo regime from its ability to use gold proceeds to oppress the Nicaraguan people.”
The SDN designation prohibits transactions and commercial activity with DGM, its property and interests in property, including entities in which it has an ownership interest of 50 percent or more (individually or in coordination with other blocked parties) by U.S. persons and wherever U.S. sanctions jurisdiction applies. OFAC issued General License No. 4 for Nicaragua, which authorizes transactions ordinarily incident and necessary to the wind down of transactions with DGM through November 23, 2022.
The amendments to E.O. 13851 expand the Treasury, State and Commerce Departments’ sanctions and export control tools for Nicaragua. Although the U.S. agencies will have to make further decisions to implement these authorities, E.O. 13851 authorizes sanctions for repression and civil rights abuses; trade and import/export controls; and new investment in any identified sectors of the Nicaraguan economy. The future implementation of these authorities may impact companies doing business in or with Nicaragua, and bear watching.
OFAC also designated Reinaldo Gregorio Lenin Cerna Juarez, a close confidante of Nicaraguan President Daniel Ortega, and former head of state security linked to numerous incidents of violence, murder, and torture. State concurrently announced the imposition of visa restrictions on over 500 Nicaraguan individuals linked to regime corruption and oppression, and their family members, pursuant to Presidential Proclamation 10309, which suspends entry into the United States as immigrants and nonimmigrants of members of the Government of Nicaragua and other persons who formulate, implement or benefit from policies or actions that undermine democratic institutions or impede the return to democracy in Nicaragua.