US Expands Export Restrictions on Nicaragua
The U.S. announced new export controls against Nicaragua this week in response to human rights abuses by the country's government and its support for Russia’s invasion of Ukraine. The measures, outlined in two final rules effective March 15, will put in place stronger Commerce Department export licensing requirements for Nicaragua and add the country to a list of nations maintained by the State Department that generally don’t receive license approvals for controlled defense items.
The new Bureau of Industry and Security measures move Nicaragua to a more “restrictive country grouping” under the Commerce Country Chart, apply a more “stringent” licensing policy for exports of national security-controlled items, and subject the country to BIS military end use and military end user restrictions. The rule released by the State Department's Directorate of Defense Trade Controls adds Nicaragua to the International Traffic in Arms Regulations’ list of Proscribed Countries, which are generally subject to an export license review policy of denial for defense articles and services.
BIS said it made the changes to address “concerns regarding the Nicaraguan Government’s human rights abuses against citizens and civil society groups” along with the government’s “continuing military and security cooperation with Russia.” Under President Daniel Ortega, the government has “targeted democratic movements,” stifled religious expression, used live ammunition against peaceful protesters and deepened its cooperation with Russia, the agency said in the rule. BIS said Russia has supplied Nicaragua with military equipment and technology since 2016, and the Ortega regime has “formally supported” Russia’s war against Ukraine.
“Responding to the Ortega government’s campaign of repression and blatant human rights abuses by cutting them off from U.S. items will help to deny him the tools to continue to inflict harm on the Nicaraguan people,” said Thea Kendler, the BIS assistant secretary for export administration.
BIS said it will revise the Export Administration Regulations by adding Nicaragua to Country Group D:5, which are nations subject to a U.S. arms embargo. It will also move Nicaragua from Country Group B to Country Group D:1, removing the country from being eligible for certain license exceptions and making it subject to more strict license requirements for certain rocket systems, unmanned aerial vehicles, microprocessors and more. Nicaragua will also be subject to the agency’s National Security Foreign Direct Product rule and its 600 series FDP rule, which place strict licensing requirements on exports of certain foreign items made with certain U.S. technology or software.
The agency also said it will introduce a more strict licensing policy for exports of items to Nicaragua that are controlled for national security reasons. BIS will review those applications “to determine whether there is a risk of diversion to a defined military end use or end user.” BIS will generally approve exports “determined to be for civil end users or for civil end uses,” but exports that could “make a material contribution” to certain major weapons systems will face a presumption of denial.
The BIS rule also adds Nicaragua to countries subject to the EAR’s military end use and military end user restrictions, joining China, Venezuela, Myanmar and Cambodia. Exporters will now need a license to send certain items to Nicaragua if they have “knowledge” those items are meant for a military end use or military end user. Although Nicaragua will be subject to MEU restrictions, BIS said the rule doesn't add any Nicaraguan entities to the MEU List.
All exports that now require a license as a result of the BIS rule but were aboard a carrier to a port as of March 15 may proceed to their destinations under the previous eligibility as long as the items are exported before April 15, BIS said. Any items not exported before midnight April 15 will require a license.
DDTC said its new restrictions also reflect “growing concerns” about Nicaragua’s attacks against democratic institutions, civil society and its “increased security cooperation with Russia.” It’s in the “best interests” of the U.S. “to restrict, with certain exceptions,” trade under the ITAR with Nicaragua, the agency said in its rule. The State Department said it will “continue to use all available diplomatic and economic tools to promote accountability” for the country’s government.
The agency’s decision to add Nicaragua to its list of Proscribed Countries imposes a license review policy of denial for controlled exports and imports of defense articles or defense services, with certain exceptions. The agency may issue licenses on a case-by-case basis for exports of “non-lethal military equipment intended solely for humanitarian assistance, to include natural disaster relief.”
The agency also said defense brokers can’t “engage in or make a proposal to engage in brokering activities” subject to the ITAR -- if they involve Nicaragua -- without first obtaining DDTC approval. The agency said it will apply “the same policy of denial to such requests.”