On October 24, 2022, the Department of the Treasury’s Office of Assets Control designated Reinaldo Gregorio Lenin Cerna Juarez (“Cerna”), a close confidante of Nicaraguan President Daniel Ortega who, according to public reporting, became a renowned torturer after taking over as Nicaragua’s head of state security under Ortega. OFAC also designated the General Directorate of Mines (DGM), a subordinate office within the Nicaraguan Ministry of Energy and Mines, which manages most mining operations in Nicaragua on behalf of the government. According to OFAC, it designated DGM in order to prevent the Ortego-Murillo regime from using gold proceeds to pay off those who keep the regime in power. Both designations are made pursuant to Executive Order 13851 — Cerna as an official of the Government of Nicaragua who served on or after January 10, 2007, and the DGM for being owned or controlled by the Nicaraguan Minister of Energy and Mines, who was designated pursuant to EO 13851 in November 2021.
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 50 percent or more by one or more designated persons are also blocked.
On October 24, 2022, President Biden also signed a new Executive Order amending EO 13851 to expand the ability of the US to sanction individuals or entities that seek to limit Nicaraguans’ freedom of expression or assembly, including members of the press. The new EO also enables the Treasury Department to target individuals and entities that operate in Nicaragua’s gold sector as well as any other sector in Nicaragua that the Secretary of the Treasury, in consultation with the Secretary of State, identifies. In addition, the new EO allows the US to ban the import of certain products of Nicaraguan origin; the export or reexport of certain items to Nicaragua; or the ability to make new investments in specific sectors of the Nicaraguan economy.
Following its designation of the DGM, OFAC issued General License 4 pursuant to Nicaragua Sanctions Regulations (NSR), 31 CFR part 582 and issued new Frequently Asked Question 1093 to further clarify the provisions in GL4. General license 4 authorizes wind-down transactions with the DGM, or any entity in which DGM owns a 50 percent or greater interest, until November 23, 2022, as long as any payments to blocked persons are made into blocked accounts in accordance with the NSR.