Further tightening sanctions first imposed in 2018, President Biden issued Oct. 24 an executive order paving the way for potentially broad restrictions on trade with Nicaragua.

“The Nicaraguan government’s accelerating actions this year closing space for civil society, increasing its security cooperation with Russia, and silencing independent voices despite broad international calls for dialogue and moderation compel the United States to act,” the State Department said in an announcement. “Governments that deny their people’s basic rights or threaten the security interests of their neighbors should not expect that their political, economic, and trade relationships will remain unaffected.”

Earlier this year Biden administration officials said they were considering blocking imports from Nicaragua, which are led by apparel, precious metals, machinery, meat, coffee, and sugar. The White House also said it might review Nicaragua’s participation in the CAFTA-DR free trade agreement.

The new executive order does not mention Nicaragua’s eligibility under the FTA and does not itself ban imports from Nicaragua. Instead, it prohibits the following.

- imports of any products of Nicaraguan origin as may be determined by the Treasury Department (in consultation with the departments of Commerce and State)

- exports, reexports, sales, or supply, directly or indirectly, from the U.S. or by a U.S. person, wherever located, to any person located in Nicaragua of any items as may be determined by the Department of Commerce (in consultation with the departments of State and the Treasury)

- new investment by a U.S. person, wherever located, in any sector of the Nicaraguan economy as may be determined by Treasury Department (in consultation with the department of State)

- any approval, financing, facilitation, or guarantee by a U.S. person, wherever located, of a transaction by a foreign person that would be prohibited by this EO if performed by a U.S. person or within the U.S.

These restrictions will apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this EO, or pursuant to the export control authorities implemented by the DOC, and notwithstanding any contract entered into or any license or permit granted prior to the date of the EO.

The EO also expands an existing block on assets to include persons determined to operate or have operated in Nicaragua’s gold sector or any other sector as may be determined by the Treasury Department.

For more information on these actions and their potential impact on your business, please contact Nicole Bivens Collinson at (202) 730-4956 or via email.

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