On October 24, the U.S. Treasury Department sanctioned the Nicaraguan Ministry of Energy and Mines’ (MEME) General Directorate of Mines (DGM), which the Daniel Ortega and Rosario Murillo regime use to finance its authoritarian and destabilizing activities, the Treasury said in a statement.
The sanctions come under a new Executive Order that expands Treasury’s authority to hold the Ortega-Murillo regime accountable for its ongoing attacks on freedom of expression.
“The Ortega-Murillo regime’s continued attacks on democratic actors and members of civil society and the unjust detention of political prisoners demonstrate that the regime feels it is not bound by the rule of law,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson.
Nelson said that with the new sanctions, the U.S. government will be able to deny the Ortega-Murillo regime the resources to continue undermining democratic institutions in Nicaragua.
Former Nicaraguan opposition lawmaker Eliseo Núñez, exiled in Costa Rica, told Diálogo on November 8 that “Nicaragua’s gold sanctions have two conceptual changes […] that Ortega should very much take into account.”
The first is that it moves from individual sanctions to institutional sanctions. This can have a much broader action and greater impact, Núñez said. The second change is that with the new Executive Order, sanctions can be applied to other institutions of the Nicaraguan economy.
General Directorate of Mines
The DGM manages most of the mining operations in Nicaragua evading the sanctions that the U.S. imposed in June on state-owned Empresas Nicaragüenses de Minas, which was created in 2017 to increase the state’s participation in the gold business, reported Nicaraguan news site Artículo 66.
The Ortega-Murillo regime uses the profits from the production and sale of gold to line its own pockets and stay in power, to intimidate and imprison those who denounce the regime’s corruption, and to sow instability around the world, including by supporting Russia’s further invasion of Ukraine, the Treasury statement said.
Another reason for the sanctions targeting DGM, according to Artículo 66, is that the DGM was under the control of Salvador Mansell, head of MEM, whose properties and interest in properties the U.S. blocked in November 2021. The regime “extracts all the country’s gold reserves in order to maintain itself,” Núñez said.
“Gold is the largest source of foreign exchange in Nicaragua. In 2021, the country exported a record 348,532 ounces [9.9 tons] of the metal. According to data from the Central Bank of Nicaragua and according to projections, it could reach 500,000 ounces [14 tons] by 2023,” Tatiana Benavides, an international consultant and researcher affiliated with Columbia University, told German broadcaster DW.
Nicaragua has seven industrial mining interests, with existing capacity to process from 500 to 6,000 tons per day, Costa Rican law firm BLP, which specializes in Central American business, said in a September blog entry.
There are currently about 160 metallic and 130 non-metallic mining concessions granted by the regime. There are also some 100 concession applications in process, a clear sign that the sector in Nicaragua continues to expand, BLP added.
The Ortega-Murillo regime also granted mining concessions in indigenous territories without consulting the communities whose lands are at stake, a flagrant violation of Nicaraguan and international laws, U.S.-based think tank Oakland Institute said in a report.
Following the announced sanctions on gold, it is likely that the Ortega-Murillo regime will seek other export avenues, Núñez said. However, “mining companies that want to continue to operate within the Western world cannot lend themselves to be partners of the regime or sell gold to Iran or Russia,” he added.
The U.S. Treasury Department also imposed economic sanctions on Reinaldo Lenín Cerna, a close confident of the Ortega-Murillo family, who was involved in human rights abuses in the country and “became renowned and feared as a torturer.”
Prior to these sanctions, Treasury froze the U.S. assets of the Defense minister and other members of the Nicaraguan security forces linked to the closure of more than 1,000 nongovernmental organizations, Nicaraguan daily La Prensa reported.
“The United States, along with allies and partners, believes it is essential that democracy be restored, and human rights and fundamental freedoms be respected in Nicaragua,” the U.S. Embassy in Managua said on October 24.