Nicaraguan Investment Conditionality Act (NICA) of 2017

The Committee on Foreign Affairs of the House of Representatives convened a congressional hearing on December 1, 2011, entitled “Democracy Held Hostage in Nicaragua: Part 1” where former United States Ambassador to Nicaragua Robert Callahan testified “[f]irst, that Daniel Ortega's candidacy was illegal, illegitimate, and unconstitutional; second, that the period leading to the elections and the elections themselves were marred by serious fraud; third, that Daniel Ortega and his Sandinista party have systematically undermined the country's fragile governmental institutions”.

According to the Organization of American States (OAS) report on the 2011 Presidential elections in Nicaragua, the OAS recommended that the Government of Nicaragua take a number of steps to improve its electoral system, including accrediting poll watchers to ensure political parties and civil society are represented to observe elections, and redesigning the structure of the Nicaraguan electoral council to allow proper registration of the electorate.

On January 25, 2012, a press statement from Secretary of State Hillary Clinton stated, “As noted by international observers and Nicaraguan civil society groups, Nicaragua's recent elections were not conducted in a transparent and impartial manner, and the entire electoral process was marred by significant irregularities. The elections marked a setback to democracy in Nicaragua and undermined the ability of Nicaraguans to hold their government accountable.”.

According to the Department of State's 2015 Fiscal Transparency Report: “Nicaragua's fiscal transparency would be improved by including all off-budget revenue and expenditure in the budget, auditing state-owned enterprises, and conducting a full audit of the government's annual financial statements and making audit reports publicly available within a reasonable period of time.”.

According to the Department of State's Country Reports on Human Rights Practices for 2015 in Nicaragua: “In 2011 the Supreme Electoral Council (CSE) announced the re-election of President Daniel Ortega Saavedra of the Sandinista National Liberation Front (FSLN) in elections that international and domestic observers characterized as seriously flawed. International and domestic organizations raised concerns regarding the constitutional legitimacy of Ortega's re-election. The 2011 elections also provided the ruling party with a supermajority in the National Assembly, allowing for changes in the constitution, including extending the reach of executive branch power and the elimination of restrictions on re-election for executive branch officials and mayors. Observers noted serious flaws during the 2012 municipal elections and March 2014 regional elections.”.

According to the Department of State's Country Reports on Human Rights Practices for 2015 in Nicaragua: “The principal human rights abuses were restrictions on citizens' right to vote; obstacles to freedom of speech and press, including government intimidation and harassment of journalists and independent media, as well as increased restriction of access to public information, including national statistics from public offices; and increased government harassment and intimidation of nongovernmental organizations (NGOs) and civil society organizations”.

The same 2015 report stated: “Additional significant human rights abuses included considerably biased policies to promote single-party dominance; arbitrary police arrest and detention of suspects, including abuse during detention; harsh and life-threatening prison conditions with arbitrary and lengthy pretrial detention; discrimination against ethnic minorities and indigenous persons and communities.”.

On June 7, 2016, the Department of State's Bureau of Democracy, Human Rights and Labor posted on social media: “Disappointed government of Nicaragua said it will deny electoral observers requested by Nicaraguan citizens, church, and private sector … We continue to encourage the government of Nicaragua to allow electoral observers as requested by Nicaraguans.”.

On August 1, 2016, the Department of State issued a press release expressing grave concern with the Government of Nicaragua limiting democratic space leading up to the elections in November and stated, “[O]n June 8, the Nicaraguan Supreme Court stripped the opposition Independent Liberal Party (PLI) from its long recognized leader. The Supreme Court took similar action on June 17 when it invalidated the leadership of the Citizen Action Party, the only remaining opposition party with the legal standing to present a presidential candidate. Most recently, on July 29, the Supreme Electoral Council removed 28 PLI national assembly members (16 seated and 12 alternates) from their popularly-elected positions.”.

On November 7, 2016, the Department of State issued a press release stating, “The United States is deeply concerned by the flawed presidential and legislative electoral process in Nicaragua, which precluded the possibility of a free and fair election on November 6. In advance of the elections, the Nicaraguan government sidelined opposition candidates for president, limited domestic observation at the polls and access to voting credentials, and took other actions to deny democratic space in the process. The decision by the Nicaraguan government not to invite independent international electoral observers further degraded the legitimacy of the election.”.

In November and December of 2016, the Board of Executive Directors of the Inter-American Development Bank postponed consideration of a policy-based loan of $65,000,000 to the Government of Nicaragua due to the serious concerns of the United States mission with the absence of transparency, systemic corruption, and the lack of free and fair elections in Nicaragua.

According to the Department of State's Country Reports on Human Rights Practices for 2016 in Nicaragua: “actions by the ruling Sandinista National Liberation Front (FSLN) party resulted in de facto concentration of power in a single party, with an authoritarian executive branch exercising significant control over the legislative, judicial, and electoral functions.”.

According to the Department of State's Country Reports on Human Rights Practices for 2016 in Nicaragua: “The November 6 elections for president, vice president, national assembly members, and representatives for the Central American parliament did not meet the conditions of being free and fair … The November 6 presidential and legislative elections were marred by allegations of institutional fraud and the absence of independent opposition political parties. National observers and opposition leaders claimed rates of abstention from 60 to 70 percent.”.

According to the Department of State's Country Reports on Human Rights Practices for 2016 in Nicaragua: “Companies reported that bribery of public officials, unlawful seizures, and arbitrary assessments by customs and tax authorities were common … The courts remained particularly susceptible to bribes, manipulation, and other forms of corruption, especially by the FSLN, giving the sense that the FSLN heavily influenced CSJ and lower-level court actions.”.

On December 21, 2017, the Department of the Treasury issued a press release announcing the designation of, and sanctions against, human rights abusers and corrupt actors, including Roberto Rivas, the President of Nicaragua’s Supreme Electoral Council, pursuant to the Global Magnitsky Human Rights Accountability Act (subtitle F of title XII of Public Law 114–328). The press release states, in part: “As President of Nicaragua’s Supreme Electoral Council, drawing a reported government salary of $60,000 per year, Roberto Jose Rivas Reyes (Rivas) has been accused in the press of amassing sizeable personal wealth, including multiple properties, private jets, luxury vehicles, and a yacht. Rivas has been described by a Nicaraguan Comptroller General as “above the law”, with investigations into his corruption having been blocked by Nicaraguan government officials. He has also perpetrated electoral fraud undermining Nicaragua’s electoral institutions.”.

the rule of law and an independent judiciary and electoral council in Nicaragua;

independent pro-democracy organizations in Nicaragua;

free and fair elections overseen by credible domestic and international observers in Nicaragua; and

anti-corruption and transparency efforts in Nicaragua.

In general— The President shall instruct the United States Executive Director at each international financial institution to use the voice and vote of the United States to oppose any loan for budget support for the Government of Nicaragua, other than to address basic human needs or to promote democracy, unless, in the preceding 12 months, the Secretary of State has certified and reported to the appropriate congressional committees that the Government of Nicaragua is taking effective steps—

Report— Not later than 180 days after the date of the enactment of this Act, the Secretary of the Treasury shall submit, to the appropriate congressional committees, a written report assessing—

Annual reports by the Secretary of State— The Secretary of State shall annually submit, to the appropriate congressional committees, a report on whether the Government of Nicaragua is taking effective steps with respect to the matters set forth in subsection (a), and if the Government of Nicaragua is taking effective steps with respect to all such matters, shall certify such to the appropriate congressional committees.

Termination— This section shall terminate on the day after the earlier of—

Waiver— The President may waive the requirements under this section if the President determines that such a waiver is in the national interest of the United States.

Report requirement— Not later than 90 days after the date of the enactment of this Act, the Secretary of State, in consultation with the intelligence community (as defined in section 3(4) of the National Security Act of 1947 (50 U.S.C. 3003(4))), shall submit, to the appropriate congressional committees, a report on the involvement of senior Government of Nicaragua officials, including members of the Supreme Electoral Council, the National Assembly, and the judicial system, in acts of public corruption, money laundering, or human rights violations in Nicaragua.

Form— The report required under subsection (a) shall be submitted in unclassified form, but may contain a classified annex. The unclassified portion of the report shall be made available to the public.

In general— Not later than 90 days after the date of the enactment of this Act, the Secretary of State, acting through the Bureau of Intelligence and Research of the Department of State and in consultation with the intelligence community (as defined in section 3(4) of the National Security Act of 1947 (50 U.S.C. 3003(4))), shall submit, to the appropriate congressional committees, a report that describes the extent of cooperation by the Governments of the Russian Federation and the Bolivarian Republic of Venezuela (including Petroleos de Venezuela, S.A. (PDVSA)) with the Government of Nicaragua and the Nicaraguan armed forces and security personnel.

Form— The report required under subsection (a) shall be submitted in unclassified form, but may include a classified annex. The unclassified portion of the report shall be made available to the public.

Appropriate congressional committees— The term appropriate congressional committees means—

International financial institution— The term international financial institution includes—