Biden targets Nicaragua's gold in new move against Ortega

MIAMI (AP) — The Biden administration is ratcheting up pressure on President Daniel Ortega’s authoritarian rule in Nicaragua, threatening a ban on Americans from doing business in the nation’s gold industry, raising the possibility of trade restrictions and stripping the U.S. visas of some 500 government insiders.

The actions, stemming from an executive order signed by President Joe Biden on Monday, are the latest and perhaps most aggressive attempt by the U.S. to hold the former Sandinista guerrilla leader accountable for his continued attacks on human rights and democracy in the Central American country as well his continued security cooperation with Russia.

Previous rounds of sanctions have focused on Ortega, his wife and vice president, Rosario Murillo, and members of their family and inner circle. But none of those moves have managed to loosen Ortega’s grip on power The latest target by Ortega's government: the Roman Catholic Church. In August, security raided the residence of a bishop, detaining him and several other clergy.

The new executive order greatly expands a Trump-era decree declaring Ortega’s hijacking of democratic norms, undermining of the rule of law and use of political violence against opponents a threat to the U.S.′ national security.

Together with the Treasury Department's simultaneous sanctioning of Nicaragua's General Directorate of Mines, the order all but makes it illegal for Americans to do business with Nicaragua's gold industry. It's the first time the U.S. has identified a specific sector of the economy as potentially off-limits and can be expanded in the future to include other industries believed to fill the government's coffers.

The executive order also paves the way for the U.S. to restrict investment and trade with Nicaragua — a move recalling the punishing embargo imposed by the U.S. in the 1980s during Ortega’s first stint as president following the country’s bloody civil war.

“The Ortega-Murillo regime’s continued attacks on democratic actors and members of civil society and 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. “We can and will use every tool at our disposal to deny the Ortega-Murillo regime the resources they need to continue to undermine democratic institutions.”

In her daily comments Monday to official media, Murillo did not directly mention the expanded U.S. sanctions, but said that Nicaraguans are “defenders of the national sovereignty.”

She also read a letter from Ortega congratulating China President Xi Jinping who was named to another term as head of the ruling Communist Party Sunday, in which Ortega questioned the “aggressive imperial ambition” of the west.

Monday’s action could signal the start of a new offensive taking aim at the broader economy — something the Biden administration has been reluctant to pursue for fear of adding to the country's hardships and unleashing more migration. For the fiscal year that ended in September, U.S. border agents encountered Nicaraguans nearly 164,000 times at the southwest border — more than triple the level for the previous year.

At the same time, frustrations have been building in Washington over the way Nicaragua's economic elites have largely remained silent amid Ortega’s crackdown.

The Biden administration's targeting of the gold industry could sap Ortega's government of one of its biggest sources of revenue. Gold was the country's largest export in 2020 and the country, already the largest producer of the precious metal in Central America, is looking to double output in the next five years.

According to Nicaragua's Central Bank, the country exported a record 348,532 ounces of gold in 2021 and the country's mining association projects exports totaling 500,000 ounces in 2023.

Among foreign investors active in the country is Condor Gold, whose CEO, Mark Child, appeared in a photo with the Nicaraguan leader in a September presentation for investors prepared by the U.K.-based company.

“He is basically totally supportive of the project,” Child said in a March interview following a 90-minute meeting with Ortega. “That meeting... basically gives a major green light for the construction of project finance and materially de-risks the project.”

The Toronto and London-listed Condor has permits to build and operate three open pit mines, the most advanced of which is believed to hold 602,000 ounces of gold worth nearly $900 million at current prices. Condor is partly owned by a company belonging to American mining engineer who has worked for decades in the country.

Shares in Condor were up slightly 2 cents, or 3.8%, following the U.S. announcement. However, another Toronto-listed junior mining company with operations in Nicaragua, Calibre Mining Corp, saw its share price plunge 17 cents, or 17%.

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

As part of Monday's actions, the Treasury Department also froze the U.S. assets of Reinaldo Lenin Cerna, who it describes as a close adviser to Ortega. According to the Treasury Department, Cerna was the head of state security during Ortega's first presidency and allegedly helped carry out the assassination of the head of security for former dictator Anastasio Somoza.

Additionally, the State Department will also be pulling the U.S. visas of more than 500 Nicaraguan individuals and their family members who either work for the Ortega government or help formulate, implement and benefit from policies that undermine democracy in the country, U.S. officials told The Associated Press on the condition of anonymity to discuss the action. Previously it froze the U.S. assets of the defense minister and other members of the security forces tied to the shuttering of more than 1,000 nongovernmental organizations.

Previously, the Biden administration also sanctioned the state-owned mining company. It also reallocated the country's sugar quota, taking away a valuable U.S. subsidy worth millions of dollars every year.

Nicaraguans began fleeing their country in 2018, initially to neighboring Costa Rica, after Ortega violently put down massive street protests. Then in 2021 security forces began rounding up leading opposition leaders, including seven potential challengers to Ortega ahead of that year’s presidential elections. Without a meaningful challenger, Ortega coasted to a fourth consecutive five-year term and Nicaraguans left their homeland in even larger numbers.

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AP writer Gabriela Selser in Mexico City contributed to this report.

Follow Goodman on Twitter: @APJoshGoodman