Today, the Trump administration imposed sanctions on Rosario Murillo and Nestor Moncada Lau, one of her closest henchman. The sanctions freeze and block access to any assets and/or property that the two may have in the United States. More importantly, the sanctions block any American citizen, business, or financial institution from conducting business with Murillo and Moncada.
A few hours later, the US Senate passed the Nicaraguan Investment and Conditionality Act (the NICA Act). The NICA Act levies the power and influence that the United States has in international financial institutions, like the World Bank, the IMF, and the Interamerican Development Bank, where the United States can oppose and/or block financial and/or technical assistance to the Government of Nicaragua, with the exception of funding that addresses “basic human needs” or promotes democracy. The NICA Act also imposes sanctions on individuals for human rights violations and/or acts of corruption (https://bit.ly/2DN9ev3). The NICA Act is expected to pass the House, and will most likely become law, as President Trump will undoubtedly sign it.
After all, he just sanctioned Rosario Murillo herself.
Following up on the sanctions announcement, the Department of State issued a statement, which included the following warning to regime officials and to the private sector:
The Nicaraguan private sector, particularly the COSEP, became complicit when it stood by as Ortega consolidated power. In exchange for their silence, Ortega allowed big Nicaraguan business concerns to function with minimal interference and few taxes. As journalist Carlos Salinas described it, this was an economic model that “guaranteed stability and advantages to big businesses, as long as they didn’t meddle in Ortega’s political decisions. This is how they allowed the hijacking of institutions, and a constitutional reform that made it possible for [Ortega] to retain power in perpetuity, and developed a dynastic government with his wife as vice president.”
The so-called “consensus model” described by Salinas completely broke down in April. In May, COSEP’s president, Jose Adan Aguerri, reacted as though in shock. He told Salinas that, “Obviously, had I known that the result of this entire process would be what happened on April 18, I would have never agreed to work in the way that we did. Had we known that this was going to be the outcome, we would have never done it.”
Mr. Aguerri was obviously not paying attention. The regime began suppressing dissent from the start. For example, a 2017 Department of State report described the human rights situation in Nicaragua as follows:
Still, Mr. Aguerri says he couldn’t have foreseen what would happen, but the truth is that he and other big impresarios were very happily silent, as long as they benefited.
Now, the private sector has been warned. Though Nicaraguan companies are not bound by the NICA Act, entities like private banks have to give some thought as to their dealings with sanctioned individuals. This has already happened, according to a story by Ivan Olivares.
Olivares wrote in Confidencial that even though Nicaraguan private banks are not bound by foreign decisions, the banks decided to sever their relationships with Roberto Rivas, Francisco Diaz, Fidel Moreno, and Francisco Lopez, after they were sanctioned under the Global Magnitsky Act. A source consulted for the story told Olivares that banks have to consider how maintaining a commercial relationship with a sanctioned individual would affect the institution. “Banks could lose their correspondent banks in the United States”, which is why private Nicaraguan banks apparently dropped Rivas, Diaz, Moreno, and Lopez as clients.
Banks drop clients as a matter of course, “When a client is on a black list, for their links to drug trafficking, terrorism, or money laundering”, according to Olivares’ source.
That said, I find it hard to believe that banks will drop Rosario Murillo as a client. Nevertheless, the private sector as a whole needs to take the State Department’s warning to heart, even if they failed to act as Ortega was consolidating power
They were silent for eleven years.
Now is the time to take the concrete actions, like a national strike, as many Nicaraguans have repeatedly demanded.
EDITOR’S NOTE: In the original version of this post, COSEP President Jose Adan Aguerri was erroneously misidentified as Jose Adan Aguirre.
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