On March 14, 2024, the U.S. Department of State’s Directorate of Defense Trade Controls (“DDTC”) and the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) announced more restrictive export controls on Nicaragua stated to be in response to the Nicaraguan Government’s human rights abuses, attacks on civil society, and increased cooperation with Russia. The DDTC and BIS press releases are available here and here.
DDTC: New ITAR Export Controls
The State Department announced restrictions on the import and export of U.S. origin defense articles and defense services destined for or originating in Nicaragua. DDTC issued a final rule that adds Nicaragua to the Proscribed Countries List pursuant to the International Traffic in Arms Regulations (22 C.F.R. Parts 120-130, the “ITAR”). This effectively updates the U.S. defense trade policy toward Nicaragua, and prohibits exports and imports of defense articles and defense services subject to the ITAR that are destined for or originating in Nicaragua. DDTC may issue a license or other approval for non-lethal military equipment intended solely for humanitarian assistance, including disaster relief. Otherwise, all exports and imports of defense articles or defense services, including brokering activities subject to the ITAR that involve Nicaragua, are subject to a policy of denial. The Proscribed Countries List also includes Belarus, Burma, China, Cuba, Iran, North Korea, Syria, and Venezuela.
BIS: New EAR Export Controls
BIS issued a final rule (effective March 15, 2024) that applies more restrictive treatment to exports and reexports to, and transfers (in-country) within, Nicaragua of items subject to the Export Administration Regulations (15 C.F.R Parts 730–774, the “EAR”). Specifically, the final rule:
- Adds Nicaragua to Country Group D:5 (U.S. Arms Embargoed Countries) in Supplement No. 1 to Part 740 of the EAR, which conforms with DDTC’s designation of Nicaragua on the Proscribed Countries List.
- Moves Nicaragua from Country Group B to Country Group D:1 (i.e., countries that raise national security concerns), which imposes more restrictive end use controls, makes certain license exceptions unavailable (e.g., License Exceptions LVS, GBS and TSR), and expands the jurisdictional scope of exports to Nicaragua under the National Security foreign direct product (“FDP”) rule and the ‘600 series’ FDP rule.
- Adopts a stricter licensing policy for items controlled for national security (“NS”) reasons, which specifies that license applications involving such items will be reviewed to determine whether there is a risk of diversion to defined military end uses and end users.
- Imposes “military end use” and “military end user” controls for Nicaragua, by adding a licensing requirement in Section 744.21 of the EAR for exports, reexports, or transfers (in-country) of items listed in Supplement No. 2 to Part 744 of the EAR to Nicaragua (in addition to Burma, Cambodia, China, and Venezuela) if there is “knowledge” that such items are intended, entirely or in part, for a described military end use or military end user.
This rule builds upon BIS’ prior actions focused on restricting the availability of items subject to the EAR to Nicaragua’s military and security services, including the Nicaraguan National Police, which BIS added to the Entity List on March 28, 2023.
