Thursday, January 26, 2023

Biden Targets Nicaraguan Gold With Sanctions

The US government is stepping up pressure on Daniel Ortega’s government in Nicaragua, threatening to ban Americans from doing business with the Central American country’s gold industry, raising the possibility of trade sanctions and nearly 500 relatives of the government being deported. Withdrawal of Visa.

The actions, contained in an executive order signed by President Joe Biden on Monday, are perhaps the most aggressive steps by Washington to punish the former Sandinista guerrilla leader for his continued attacks on democracy and human rights in the Central American country and for his security cooperation. with Russia.

Previous US sanctions had targeted Ortega, his wife and vice president Rosario Murillo, and relatives and other close associates. But none of these measures have affected the power of the president, whose most recent target has been the Catholic Church. In August, Nicaraguan security forces raided the residence of a bishop, detaining him and other clerics.

Biden’s order expands one that was issued during Donald Trump’s presidency, where he calls for violations of democratic norms, attacks against the rule of law and the use of violence against opponents as a threat to the national security of the United States. Announces joining as a threat to.

Along with the simultaneous sanctions announced by the Treasury Department against the General Directorate of Mines, the executive order practically makes it illegal for Americans to do business with the Nicaraguan gold industry. This is the first time that the United States has focused on a specific sector of the Nicaraguan economy, and in the future it may expand to include other industries that are considered sources of funding for the Ortega government.

The executive order also paves the way for Washington to restrict investment and trade with Nicaragua, measures reminiscent of harsher sanctions imposed by the United States in the 1980s during Ortega’s first Sandinista government after a bloody civil war.

Under Secretary of State Brian E. Nelson said, “The Ortega-Murillo regime’s continued attacks against democratic actors and members of civil society, and its unjustified detention of political prisoners, shows that the regime feels it must respect the rule of law.” Is not needed.” Treasury for Terrorism and Financial Intelligence. “We can and will use all means at our disposal to deny the Ortega-Murillo regime the resources it needs to undermine democratic institutions.”

In his daily comments to the official press, Murillo did not directly refer to the expanded US sanctions, but said that the Nicaraguan people are the “defenders of national sovereignty”.

He also read a letter from Ortega congratulating Chinese President Xi Jinping, who was appointed to another term as head of the Communist Party on Sunday, in which Ortega questioned what he said was “a threat to the West”. aggressive imperial greed”.

Monday’s actions could mark the beginning of a new offensive against Nicaragua’s economy, something the Biden government has been reluctant to do so as not to exacerbate the Central American country’s economic difficulties and provoke more emigration. For the fiscal year ending in September, US border agents encountered Nicaraguans at the border nearly 164,000 times, more than triple the number in the previous year.

At the same time, frustration has grown in Washington over the way Nicaragua’s economic elite have remained silent in the face of repression by the Ortega government.

Biden’s decision to target Nicaragua’s gold industry could deprive the Ortega government of one of its main sources of funding. Gold was Nicaragua’s main export in 2020, and the country, already the largest producer of the precious metal in Central America, is looking to double production over the next five years.

According to the Central Bank of Nicaragua, the country exported a record 348,532 ounces of gold in 2021, and its mining association estimates exports will reach a total of 500,000 ounces in 2023.

Among foreign investors active in Nicaragua is Condor Gold, whose CEO Mark Child was featured alongside Ortega in an investor presentation prepared by the British-based company in September.

“Basically, he totally supports the project,” Child said in an interview in March after a 90-minute meeting with Ortega. “That meeting … basically gives the go-ahead to the construction of the project and its financing, and eliminates the risks.”

Condor, which is listed on the London and Toronto stock exchanges, has a license to develop three open pit mines, the most advanced of which would hold 602,000 ounces of gold worth $900 million at current prices. Condor is partly owned by an American engineer who has worked in Nicaragua for decades.

Condor shares rose 2 cents (3.8%) after the US sanctions were announced. However, shares of Caliber Mining Corp, another Toronto-listed company with mining activities in Nicaragua, declined 17 cents (17%).

The Vancouver-based firm has several mining projects in Nicaragua that are believed to contain 2.9 million ounces of gold.

As part of the actions taken on Monday, the Treasury Department also froze the US assets of Reinaldo Lenin Serna, whom it described as a close adviser to Ortega. According to the Treasury Department, Serna was head of state security during Ortega’s first presidency and allegedly helped assassinate former dictator Anastasio Somoza’s head of security.

In addition, the State Department will withdraw the visas of more than 500 Nicaraguan individuals and their families who work for the Ortega government or help formulate, implement and benefit from policies that undermine democracy in the country, the US The officials told The Associated Press on condition of anonymity. Earlier, he froze US assets of the defense minister and other members of the security forces linked to the shutdown of more than 1,000 non-governmental organizations.

Earlier, the Biden administration approved a state-owned mining company and revised Nicaraguan sugar quotas, withdrawing millions of dollars in annual subsidies.

Nicaraguans began migrating to neighboring Costa Rica initially in 2018 after Ortega began violently suppressing protests. In 2021, security forces began detaining opposition leaders, including many who were running as candidates against Ortega in that year’s elections. Lacking a serious challenger, he easily won a fourth consecutive five-year term, as more Nicaraguans fled the country.


Associated Press reporter Gabriela Sellars in Mexico City contributed to this report.


Joshua Goodman is on Twitter as @APJoshGoodman

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