Nicaraguan Investment Conditionality Act (NICA) of 2017

Summary: Nicaraguan Investment Conditionality Act (NICA) of 2017 This bill directs the President to instruct the U.S. Executive Director at each international financial institution to use U.S. influence to oppose any loan for the government of Nicaragua's benefit, other than for basic human needs or to promote democracy, unless the Department of State certifies that Nicaragua is taking effective steps to:   hold free elections overseen by credible domestic and international electoral observers;  promote democracy and an independent judicial system and electoral council;  strengthen the rule of law;  respect the right to freedom of association and expression; combat corruption, including investigating and prosecuting government officials credibly alleged to be corrupt; and protect the right of political opposition parties, journalists, trade unionists, human rights defenders, and other civil society activists to operate without interference.  The Department of the Treasury shall submit to Congress a report assessing: (1) the effectiveness of the international financial institutions in enforcing applicable program safeguards in Nicaragua, and (2) the effects of specified constitutional and election concerns in Nicaragua on long-term prospects for positive development outcomes there.  The President may waive such requirements in the U.S. national interest. The bill requires: (1) the President to direct the U.S. Permanent Representative to the Organization of American States to use U.S. influence to advocate for an Electoral Observation Mission to be sent to Nicaragua in 2017, and (2) the State Department to report on the involvement of senior Nicaraguan government officials in acts of public corruption or human rights violations.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Nicaraguan Investment Conditionality 
Act (NICA) of 2017''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) In 2006, Nicaragua, under President Enrique Bolanos, 
        entered into a $175,000,000, 5-year compact with the Millennium 
        Challenge Corporation (MCC).
            (2) After the 2008 municipal elections, the MCC stated that 
        there was a pattern of decline in political rights and civil 
        liberties in Nicaragua.
            (3) In 2009, the MCC terminated the compact and reduced the 
        amount of MCC funds available to Nicaragua by $61,500,000, 
        which led to the compact ending in 2011.
            (4) According to Nicaraguan law, the National Assembly is 
        the only institution allowed to change the constitution, but in 
        2009, Daniel Ortega circumvented the legislature and went to 
        the Supreme Court, which he controls, to rule in his favor that 
        Presidential term limits were inapplicable.
            (5) The Committee on Foreign Affairs of the House of 
        Representatives convened a congressional hearing on December 1, 
        2011, entitled ``Democracy Held Hostage in Nicaragua: Part 1'' 
        where former United States Ambassador to Nicaragua Robert 
        Callahan testified ``[f]irst, that Daniel Ortega's candidacy 
        was illegal, illegitimate, and unconstitutional; second, that 
        the period leading to the elections and the elections 
        themselves were marred by serious fraud; third, that Daniel 
        Ortega and his Sandinista party have systematically undermined 
        the country's fragile governmental institutions''.
            (6) From fiscal year 2012 until present, the Department of 
        State found that the Government of Nicaragua did not meet 
        international standards of fiscal transparency.
            (7) On January 25, 2012, a press statement from Secretary 
        of State Hillary Clinton stated, ``As noted by international 
        observers and Nicaraguan civil society groups, Nicaragua's 
        recent elections were not conducted in a transparent and 
        impartial manner, and the entire electoral process was marred 
        by significant irregularities. The elections marked a setback 
        to democracy in Nicaragua and undermined the ability of 
        Nicaraguans to hold their government accountable.''.
            (8) According to the Department of State's 2015 Fiscal 
        Transparency Report: ``Nicaragua's fiscal transparency would be 
        improved by including all off-budget revenue and expenditure in 
        the budget, auditing state-owned enterprises, and conducting a 
        full audit of the government's annual financial statements and 
        making audit reports publicly available within a reasonable 
        period of time.''.
            (9) According to the Department of State's Country Reports 
        on Human Rights Practices for 2015: ``In 2011 the Supreme 
        Electoral Council (CSE) announced the re-election of President 
        Daniel Ortega Saavedra of the Sandinista National Liberation 
        Front (FSLN) in elections that international and domestic 
        observers characterized as seriously flawed. International and 
        domestic organizations raised concerns regarding the 
        constitutional legitimacy of Ortega's re-election. The 2011 
        elections also provided the ruling party with a supermajority 
        in the National Assembly, allowing for changes in the 
        constitution, including extending the reach of executive branch 
        power and the elimination of restrictions on re-election for 
        executive branch officials and mayors. Observers noted serious 
        flaws during the 2012 municipal elections and March 2014 
        regional elections.''.
            (10) According to the Department of State's Country Reports 
        on Human Rights Practices for 2015 in Nicaragua: ``The 
        principal human rights abuses were restrictions on citizens' 
        right to vote; obstacles to freedom of speech and press, 
        including government intimidation and harassment of journalists 
        and independent media, as well as increased restriction of 
        access to public information, including national statistics 
        from public offices; and increased government harassment and 
        intimidation of nongovernmental organizations (NGOs) and civil 
        society organizations''.
            (11) The same 2015 report stated: ``Additional significant 
        human rights abuses included considerably biased policies to 
        promote single-party dominance; arbitrary police arrest and 
        detention of suspects, including abuse during detention; harsh 
        and life-threatening prison conditions with arbitrary and 
        lengthy pretrial detention; discrimination against ethnic 
        minorities and indigenous persons and communities.''.
            (12) In February 2016, the Ortega regime detained and 
        expelled Freedom House's Latin America Director, Dr. Carlos 
        Ponce, from Nicaragua.
            (13) On June 3, 2016, the Nicaraguan Supreme Court, which 
        is controlled by Nicaragua's leader, Daniel Ortega, instructed 
        the Supreme Electoral Council not to swear in Nicaraguan 
        opposition members to the departmental and regional electoral 
        councils.
            (14) On June 5, 2016, regarding international observers for 
        the 2016 Presidential elections, President Ortega stated, 
        ``Here, the observation ends. Go observe other countries . . . 
        There will be no observation, neither from the European Union, 
        nor the OAS . . .''.
            (15) On June 7, 2016, the Department of State's Bureau of 
        Democracy, Human Rights and Labor posted on social media: 
        ``Disappointed government of Nicaragua said it will deny 
        electoral observers requested by Nicaraguan citizens, church, 
        and private sector . . . We continue to encourage the 
        government of Nicaragua to allow electoral observers as 
        requested by Nicaraguans.''.
            (16) On June 14, 2016, President Ortega expelled three 
        United States Government officials (two officials from U.S. 
        Customs and Border Protection and one professor from the 
        National Defense University) from Nicaragua.
            (17) On June 29, 2016, the Department of State issued a 
        Nicaragua Travel Alert which stated, ``The Department of State 
        alerts United States citizens about increased government 
        scrutiny of foreigners' activities, new requirements for 
        volunteer groups, and the potential for demonstrations during 
        the upcoming election season in Nicaragua . . . Nicaraguan 
        authorities have denied entry to, detained, questioned, or 
        expelled foreigners, including United States Government 
        officials, academics, NGO workers, and journalists, for 
        discussions, written reports or articles, photographs, and/or 
        videos related to these topics. Authorities may monitor and 
        question private United States citizens concerning their 
        activities, including contact with Nicaraguan citizens.''.
            (18) On August 1, 2016, the Department of State issued a 
        press release to express grave concern over the Nicaraguan 
        government limiting democratic space leading up to the 
        elections in November and stated, ``[O]n June 8, the Nicaraguan 
        Supreme Court stripped the opposition Independent Liberal Party 
        (PLI) from its long recognized leader. The Supreme Court took 
        similar action on June 17 when it invalidated the leadership of 
        the Citizen Action Party, the only remaining opposition party 
        with the legal standing to present a presidential candidate. 
        Most recently, on July 29, the Supreme Electoral Council 
        removed 28 PLI national assembly members (16 seated and 12 
        alternates) from their popularly-elected positions.''.
            (19) On November 7, 2016, the Department of State issued a 
        press release stating, ``The United States is deeply concerned 
        by the flawed presidential and legislative electoral process in 
        Nicaragua, which precluded the possibility of a free and fair 
        election on November 6. In advance of the elections, the 
        Nicaraguan government sidelined opposition candidates for 
        president, limited domestic observation at the polls and access 
        to voting credentials, and took other actions to deny 
        democratic space in the process. The decision by the Nicaraguan 
        government not to invite independent international electoral 
        observers further degraded the legitimacy of the election.''.
            (20) In November and December of 2016, the Board of 
        Executive Directors of the Inter-American Development Bank 
        postponed consideration of a policy-based loan of $65,000,000 
        to the Government of Nicaragua due to the efforts of the United 
        States mission that expressed serious concerns of the absence 
        of transparency, systemic corruption, and the lack of free and 
        fair elections in Nicaragua.
            (21) On February 2017, the European Parliament issued a 
        resolution on the situation of human rights and democracy in 
        Nicaragua and expressed concern of the ``deteriorating human 
        rights situation in Nicaragua and deplores the attacks and acts 
        of harassment to which human rights organizations and their 
        members and independent journalists have been subjected by 
        individuals, political forces and bodies linked to the 
        State.''.
            (22) According to the Department of State's Country Reports 
        on Human Rights Practices for 2016: ``actions by the ruling 
        Sandinista National Liberation Front (FSLN) party resulted in 
        de facto concentration of power in a single party, with an 
        authoritarian executive branch exercising significant control 
        over the legislative, judicial, and electoral functions.''.
            (23) According to the Department of State's Country Reports 
        on Human Rights Practices for 2016 in Nicaragua: ``The November 
        6 elections for president, vice president, national assembly 
        members, and representatives for the Central American 
        parliament did not meet the conditions of being free and fair . 
        . . The November 6 presidential and legislative elections were 
        marred by allegations of institutional fraud and the absence of 
        independent opposition political parties. National observers 
        and opposition leaders claimed rates of abstention from 60 to 
        70 percent.''.
            (24) According to the Department of State's Country Reports 
        on Human Rights Practices for 2016: ``Companies reported that 
        bribery of public officials, unlawful seizures, and arbitrary 
        assessments by customs and tax authorities were common . . . 
        The courts remained particularly susceptible to bribes, 
        manipulation, and other forms of corruption, especially by the 
        FSLN, giving the sense that the FSLN heavily influenced CSJ and 
        lower-level court actions.''.

SEC. 3. STATEMENT OF POLICY.

    It is the policy of the United States to support--
            (1) the rule of law and an independent judiciary and 
        electoral council in Nicaragua;
            (2) independent pro-democracy organizations in Nicaragua;
            (3) free, fair, and transparent elections under 
        international and domestic observers in Nicaragua; and
            (4) anti-corruption and transparency efforts in Nicaragua.

SEC. 4. INTERNATIONAL FINANCIAL INSTITUTIONS.

    (a) In General.--The President shall instruct the United States 
Executive Director at each international financial institution to use 
the voice, vote, and influence of the United States to oppose any loan 
for the benefit of the Government of Nicaragua, other than to address 
basic human needs or promote democracy, unless the Secretary of State 
certifies and reports to the appropriate congressional committees that 
the Government of Nicaragua is taking effective steps to--
            (1) hold free, fair, and transparent elections overseen by 
        credible domestic and international electoral observers;
            (2) promote democracy, as well as an independent judicial 
        system and electoral council;
            (3) strengthen the rule of law;
            (4) respect the right to freedom of association and 
        expression;
            (5) combat corruption, including investigating and 
        prosecuting government officials credibly alleged to be 
        corrupt; and
            (6) to protect the right of political opposition parties, 
        journalists, trade unionists, human rights defenders, and other 
        civil society activists to operate without interference.
    (b) Report.--The Secretary of the Treasury shall submit to the 
appropriate congressional committees a written report assessing--
            (1) the effectiveness of the international financial 
        institutions in enforcing applicable program safeguards in 
        Nicaragua; and
            (2) the effects of the matters described in section 2 on 
        long-term prospects for positive development outcomes in 
        Nicaragua.
    (c) Definitions.--In this section:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Foreign Relations, the 
                Committee on Appropriations, and the Committee on 
                Banking, Housing, and Urban Affairs of the Senate; and
                    (B) the Committee on Foreign Affairs, the Committee 
                on Appropriations, and the Committee on Financial 
                Services of the House of Representatives.
            (2) International financial institution.--The term 
        ``international financial institution'' means--
                    (A) the International Monetary Fund;
                    (B) the International Bank for Reconstruction and 
                Development;
                    (C) the European Bank for Reconstruction and 
                Development;
                    (D) the International Development Association;
                    (E) the International Finance Corporation;
                    (F) the Multilateral Investment Guarantee Agency;
                    (G) the African Development Bank;
                    (H) the African Development Fund;
                    (I) the Asian Development Bank;
                    (J) the Inter-American Development Bank;
                    (K) the Bank for Economic Cooperation and 
                Development in the Middle East and North Africa; and
                    (L) the Inter-American Investment Corporation.
    (d) Termination.--This section shall terminate on the day after the 
earlier of--
            (1) the date on which the Secretary of State certifies and 
        reports to the appropriate congressional committees that the 
        requirements of subsection (a) have been met; or
            (2) 5 years after the date of the enactment of this Act.
    (e) Waiver.--The President may waive the requirements of this 
section if the President determines that such a waiver is in the 
national interest of the United States.

SEC. 5. ORGANIZATION OF AMERICAN STATES.

    (a) Findings.--Congress finds that, according to the Organization 
of American States (OAS) report on the Nicaraguan 2011 Presidential 
elections, ``Nicaragua: Final Report, General Elections, OAS (2011)'', 
the OAS made the following recommendations to the Government of 
Nicaragua:
            (1) Prepare alternative procedures for updating the 
        electoral roll when a registered voter dies.
            (2) Publish the electoral roll so that new additions, 
        changes of address, and exclusions can be checked.
            (3) Reform the mechanism for accreditation of poll watchers 
        using a formula that ensures that the political parties will 
        have greater autonomy to accredit their respective poll 
        watchers.
            (4) Institute regulations to ensure that party poll 
        watchers are involved in all areas of the electoral structure, 
        including the departmental, regional, and municipal electoral 
        councils and polling stations. Rules should be crafted to spell 
        out their authorities and functions and the means by which they 
        can exercise their authority and perform their functions.
            (5) Redesign the CSE administrative structure at the 
        central and field levels, while standardizing technical and 
        operational procedures, including the design of control 
        mechanisms from the time registration to the delivery of the 
        document to the citizens; the process of issuing identity cards 
        should be timed to the calendar and, to avoid congestion within 
        the process, be evenly spaced.
    (b) Electoral Observation Mission.--The President shall direct the 
United States Permanent Representative to the Organization of American 
States (OAS) to use the voice, vote, and influence of the United States 
at the OAS to strongly advocate for an Electoral Observation Mission to 
be sent to Nicaragua in 2017.

SEC. 6. STATEMENT OF POLICY.

    The Department of State and the United States Agency for 
International Development should prioritize foreign assistance to the 
people of Nicaragua to assist civil society in democracy and governance 
programs, including human rights documentation.

SEC. 7. REPORT ON CORRUPTION IN NICARAGUA.

    (a) Report Requirement.--Not later than 90 days after the date of 
the enactment of this Act, the Secretary of State, in consultation with 
the intelligence community (as defined in section 3(4) of the National 
Security Act of 1947 (50 U.S.C. 3003(4))), shall submit to Congress a 
report on the involvement of senior Government of Nicaragua officials, 
including members of the Supreme Electoral Council, the National 
Assembly, and the judicial system, in acts of public corruption or 
human rights violations in Nicaragua.
    (b) Form.--The report required in subsection (a) shall be submitted 
in unclassified form, but may contain a classified annex. The 
unclassified portion of the report shall be made available to the 
public.