On June 17, 2022, the US Department of the Treasury’s Office of Foreign Assets Control designated the state-owned Nicaraguan mining company Empressa Nicaraguense de Minas (ENIMINAS) and the president of its board of directors, Ruy Delgado Lopez, pursuant to Executive Order 13851, which targets those who contribute to the situation in Nicaragua. OFAC also issued a new general license to temporarily authorize wind down transactions with ENIMINAS and issued a new frequently asked questions to further clarify provisions in the general license.
OFAC reports that Nicaragua’s Ortega-Murillo regime, which retained its power by rigging Nicaragua’s last presidential election and imprisoning its political opponents, has recently deepened its relationship with Russia as the war with Ukraine progresses. According to OFAC, the ENIMINAS was created by the Government of Nicaragua in 2017 to solidify the government’s control over Nicaragua’s mining sector, and the regime is benefitting from gold revenues that have increased dramatically in recent years – revenues that are used to oppress the people of Nicaragua and support activities that “pose a threat to the security of the hemisphere.” Lopez is being designated by OFAC pursuant to EO 13851 for being an official in the Government of Nicaragua or serving as an official at any time on or after January 10, 2027, just as OFAC previously designated two of Lopez’s predecessors who held the same position. ENIMINAS is being designated for being owned or controlled by Lopez.
As a result of these designations, all property and interests in property of today’s designees within the United States or within the possession or control of a US person are blocked, and US persons are generally prohibited from engaging in transactions involving the designated persons. In addition, entities owned fifty percent or more by one or more designated persons are also blocked.
OFAC also reports that Nicaragua’s export of gold to the US increased by 30 percent in 2021 and totaled more than $744 million, accounting for 79 percent of all Nicaraguan gold exports that year. In response, OFAC issued Nicaragua General License 3 to temporarily authorize wind down transactions with ENIMINAS or any entity in which ENIMINAS owns a 50 percent or great interest. Under GL 3, wind down transactions are authorized until July 18, 2022 provided that any payments to blocked persons are made into blocked accounts in accordance with the NSR. OFAC also issued FAQ 1069 to provide an overview of GL 3 and clarify that non-US persons do not risk sanctions for engaging in activities authorized by GL 3.