Nicaragua

RISK DASHBOARD

BACKGROUND

 

The Pacific coast of Nicaragua was settled as a Spanish colony from Panama in the early 16th century. Independence from Spain was declared in 1821 and the country became an independent republic in 1838. Britain occupied the Caribbean Coast in the first half of the 19th century, but gradually ceded control of the region in subsequent decades. Violent opposition to governmental manipulation and corruption spread to all classes by 1978 and resulted in a short-lived civil war that brought a civic-military coalition, spearheaded by the Marxist Sandinista guerrillas led by Daniel ORTEGA Saavedra to power in 1979. Nicaraguan aid to leftist rebels in El Salvador prompted the US to sponsor anti-Sandinista contra guerrillas through much of the 1980s. After losing free and fair elections in 1990, 1996, and 2001, former Sandinista President Daniel ORTEGA was elected president in 2006, 2011, and most recently in 2016. Municipal, regional, and national-level elections since 2008 have been marred by widespread irregularities. Democratic institutions have weakened under the ORTEGA administration as the president has garnered full control over all branches of government, especially after cracking down on a nationwide antigovernment protest movement in 2018.

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ANTI-MONEY LAUNDERING

FATF status

Nicaragua is on the FATF List of Countries that have been identified as having strategic AML deficiencies

 

FATF Statement re AML Strategic Deficiencies:   21 February 2020​

In February 2020, Nicaragua made a high-level political commitment to work with the FATF and GAFILAT to strengthen the effectiveness of its AML/CFT regime. Since the completion of its MER in July 2017, Nicaragua has made progress on a number of its MER recommended actions to improve technical compliance and effectiveness, including by increasing the use of financial information in the investigation and prosecution of ML offenses and fixing its legal framework for criminalizing TF. Nicaragua will work to implement its action plan, including by: (1) developing a more comprehensive understanding of its ML/TF risk; (2) more proactively seeking international cooperation to support ML investigation, especially with the aim of identifying and tracing assets with confiscation and repatriation purposes; (3) conducting effective risk based supervision; (4) taking appropriate measures to prevent legal persons and arrangements from being misused for criminal purposes, and ensure that accurate and up to date basic and beneficial ownership information is available on a timely basis.

 

Compliance with FATF Recommendations

The latest follow-up to the Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Nicaragua was undertaken in 2019. According to that Evaluation, Nicaragua was deemed Compliant for 4 and Largely Compliant for 23 of the FATF 40 Recommendations. It was deemed Highly effective for 0 and Substantially Effective for 1 of the Effectiveness & Technical Compliance ratings.

FURTHER AML INFORMATION

 

including FATF Recommendation scoring, Key Findings, US State of Department Money Laundering Report and other relevant reports where available

Available in Enhanced Due Diligence Report

SANCTIONS

This country is subject to EU and US sanction.

SANCTIONS

 

More Detailed Sanctions information 

Available in Enhanced Due Diligence Report

BRIBERY & CORRUPTION

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           22

World Governance Indicator – Control of Corruption             13

BRIBERY & CORRUPTION

 

Further information on Bribery and Corruption 

Available in Enhanced Due Diligence Report

REPORTS

 

US State Department Reports on Narcotics, Human Trafficking

Available in Enhanced Due Diligence Report

ECONOMY

Nicaragua, the poorest country in Central America and the second poorest in the Western Hemisphere, has widespread underemployment and poverty. Textiles and agriculture combined account for nearly 50% of Nicaragua's exports.

The Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) has been in effect since April 2006 and has expanded export opportunities for many Nicaraguan agricultural and manufactured goods.

In 2013, the government granted a 50-year concession to a newly formed Chinese-run company to finance and build an inter-oceanic canal and related projects, at an estimated cost of $50 billion. The canal construction has not started.

Agriculture - products:

coffee, bananas, sugarcane, rice, corn, tobacco, cotton, sesame, soya, beans; beef, veal, pork, poultry, dairy products; shrimp, lobsters

Industries:

food processing, chemicals, machinery and metal products, knit and woven apparel, petroleum refining and distribution, beverages, footwear, wood, electric wire harness manufacturing, mining

Exports - commodities:

coffee, beef, gold, sugar, peanuts, shrimp and lobster, tobacco, cigars, automobile wiring harnesses, textiles, apparel, cotton

Exports - partners:

US 56.5%, Mexico 10.7%, Venezuela 5.4%, El Salvador 4.3% (2015)

Imports - commodities:

consumer goods, machinery and equipment, raw materials, petroleum products

Imports - partners:

US 19.9%, Mexico 14.9%, China 10.6%, Venezuela 7%, Costa Rica 7%, El Salvador 5.7%, Guatemala 5.6%, Netherlands Antilles 5.5% (2015)

Investment Climate

INVESTMENT CLIMATE

Includes information on Inward and outward investment policies, investment restrictions, Capital Markets and Portfolio Investment, Money and Banking System, State-Owned Enterprises etc.

Available in Enhanced Due Diligence Report

INDUSTRY INFORMATION

Includes information on perceived AML risks on industry sector on a country by country basis

 

Available in Enhanced Due Diligence Report