The president of Nicaragua, Daniel Ortega, sent to the National Assembly, with a pro-government majority, a bill that will force local banks to ignore United States sanctions and provide the corresponding services to the people and entities involved.
The initiative, called “Law for the protection of Nicaraguans against external sanctions and aggressions”, will punish banks that do not comply with the measure with a “temporary or permanent” penalty for their operations, according to the legislative project sent on Wednesday and which could be approved this Friday.
Ortega’s claim is that this bill will seek to “protect Nicaraguans and their institutions from sanctions,” but independent experts believe that the national financial system will be compromised.
Since 2018, when a sociopolitical crisis arose in Nicaragua, the United States, Canada and the European Union have imposed sanctions against President Daniel Ortega’s inner circle and his officials, as well as entities such as the National Police.
Most of these sanctions have been imposed for violations of human rights and fundamental freedoms, undermining of democratic institutions and electoral fraud.
An outlaw state
The political scientist, public policy expert and director of the migration, remittances and development program of the Inter-American Dialogue, Manuel Orozco, explained that the new law proposal will force banks to comply with the regulations and put Nicaragua’s financial system in trouble.
“The banking institution can notify that they are pressured by national legislation to not comply with the sanction and the United States Treasury will decide to notify the banks that Nicaragua is a country that has become a safe space for sanctioned entities and therefore is a place of high financial risk,” said Orozco in X.
“Nicaragua is formally calling itself an outlaw state,” he added.
In his opinion, in these contexts “correspondent banks apply the ‘de-risk’ policy, when the Treasury considers that an entity or country is acting outside the framework of the established sanctions process (Venezuela, Iran, Russia, for example), and proceeds to notify the violating banking institution, and at the same time notifies banking correspondents.”
Measure incorporated in constitutional reform
Daniel Ortega also included ignorance of international sanctions in an initiative to reform the Political Constitution of Nicaragua that he sent to the National Assembly.
In article 5 of that proposal, it is said that “no measure that violates international law” taken by foreign governments, against Nicaraguan institutions, officials or persons, “shall be valid for the Nicaraguan State.”
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