Nicaragua WT/TPR/S/167 
 Page 25 
 
 
III. TRADE POLICIES BY MEASURE 
(1) OVERVIEW  
1. Since the previous review in 1999, Nicaragua has continued to liberalize its trade regime, 
with special emphasis on the promotion of exports, a key component of its development strategy.  
Exports are being promoted, inter alia , through preferential trade agreements and through the 
increased development of free zones (whose numbers ha ve increased in parallel with various financial 
incentives).  The Government is also working more  closely with the private sector in implementing 
Nicaragua's trade policy. 
2. Pursuant to its commitments in the WTO and under preferential trade agreements, notably the 
Central American Common Market (CACM), Nicaragua  has redrafted or amended its legislation in 
many areas, for example, it has adopted the Centra l American customs valuation regulations, enacted 
a new government procurement law, approved a nu mber of laws and agreements on intellectual 
property rights, together with reforms to the free zone  regime.  It is also in the process of drawing up 
or approving draft legislation on foreign trade, the customs and competition. 
3. At the time of the previous review, Nicaragua already belonged to the CACM and had a Free 
Trade Agreement (FTA) with Mexico.  Since th en, it has been extremely active in negotiating 
regional trade agreements, notably the Central America-Dominican Republic Free Trade Agreement 
with the United States (CAFTA), wh ich came into effect for Nicaragua on 1 April 2006.  Together 
with other members of the CACM, Nicaragua has initia ted or finalized several FTAs:  one is already 
in force (with the Dominican Republic);  another has been finalized but not yet approved (with 
Chinese Taipei);  and three are being negotiated (with Canada, Chile and Panama).  The growing 
number of free trade agreements to which Nicaragua is party raises concerns as to their administrative 
cost and the risk of trade diversion. 
4. The simple average of Nicaragua's MFN tariff rose from 4.2 per cent in 1999 to 5.8 per cent 
in 2005, the main reason being the continued harm onization of the CACM's common external tariff 
(CET).  According to the WTO definition, in 2005, the average MFN tariff on agricultural products 
was 11.4 per cent (7.9 per cent in 1999), compar ed to 4.8 per cent on non-agricultural products 
(3.4 per cent in 1999).  Nicaragua bound its tariffs on the vast majority of products at a ceiling rate of 
40 per cent (but specified 64 exceptions to th e bound ceiling);  all applied and bound tariffs are 
ad valorem . 
5. In addition to customs tariffs, Nicaragua le vies certain additional taxes on imports:  a 
selective consumption tax (ISC), which applies to a limited number of non-staple goods;  VAT, at a 
standard rate of 15 per cent;  and the import ser vices tax (TSIM), which is a customs commission 
amounting to US$0.50 or the corresponding amount in  Nicaraguan currency on each gross tonne or 
fraction thereof.  At the end of 2001, Nicaragua abolished the temporary import tariff introduced in 
July 1994.  It has not imposed any anti-dumping or countervailing measures since 1999, but has 
utilized safeguards for some agricultural products.  In general, import licences are still required for 
health, sanitary, phytosanitary or environmental protection reasons or pursuant to international 
agreements signed by Nicaragua. 
(2) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Registration and documentation 
6. Nicaragua's customs procedures and documentation are based on the Central American 
Uniform Customs Code (CAUCA) and, since 2003, on the Second Protocol to the CAUCA WT/TPR/S/167 Trade Policy Review 
Page 26 
 
 
(CAUCA III) (Chapter II(4)(ii)(a)).  National legisla tion covers specific procedural matters to meet 
national interests. 
7. Importers and exporters must be listed in th e Single Register of Taxpayers kept by the 
Ministry of Finance and Public Credit (MHCP) so th at the taxpayers' register can be harmonized with 
the other registers of persons who have dealings with the State and its subsidiary au thorities.  Product-
specific compulsory registration (Ministry of Public Health) applies to medicinal products or pharmaceuticals for human or veterinary use, whose na mes must be registered;  hygiene products with 
preventive or therapeutic properties;  spirits, wine s and other products containing alcohol;  foodstuffs 
and beverages, dietary products to prevent or cure  nutritional deficiencies;  cosmetics, perfumes and 
other toilet preparations;  insecticides and disinfectants for domestic use.
1 
8. Import documentation varies depending on the country  of origin and whether or not the trade 
partner has signed an FTA with Nicaragua.  Fewe r documents are required for imports from other 
CACM member countries, which do not have to su bmit a "commercial invoice" or "declaration of 
value", whereas more documents are required for imports under an FTA.  With the exception of CACM member countries, the other countries with which an FTA has been signed must submit the 
respective certificate of origin.
2  In recent years, the number of documents required for imports has 
been substantially reduced.  Accord ing to the authorities, their numb er has fallen from 12 to five for 
imports from the CACM, from 16 to seven for impor ts under an FTA, and from 16 to six for imports 
from the rest of the world.3 
Table III.1 
Import documentation requi rements according to the origin of the goods, 2006 
 Central America FTAs Rest of the world 
FAUCA customs declarationa X X X 
Commercial invoice  X X 
Transport document X X X 
Declaration of value  X X 
Certificate of origin  X  
Fiscal solvency X X X 
Payment document X X X 
Special permits (for restricted products) X X X 
Exemption (where applicable) X X X 
a Central American Single Customs Form. 
Source : Information provided by the Nicaraguan authorities. 
9. According to data from the World Bank, Nicar agua's customs procedures are, in some 
respects, relatively less cumbersome  than those of other countries in the region.  Compared to the 
average situation in the Latin American or Caribb ean region, Nicaragua requires fewer documents or 
signatures for either exports or imports.  Nevert heless, the time required for import procedures in 
Nicaragua is slightly longer than average and, in the case of exports, is much longer (Table III.2).  
According to the Nicaraguan Directorate General of  Customs (DGA), if customs clearance is at the 
border, the average time taken for import proce dures is a maximum of three hours (the minimum is 
20 minutes);  if the goods are cleared after the lorr y has left the border for a warehouse in Managua, 
                                                      
1 Proof of registration must be attached  to the customs clearance declaration. 
2 With the entry into force of the CAFTA for Nicaragua, a certificate of origin is  no longer required for 
imports from the United States of America. 
3 These figures include two types of document that are not always required:  special permits and 
exemptions (see Table III.1). Nicaragua WT/TPR/S/167 
 Page 27 
 
 
the average time taken is a maximum of four days4;  in the case of exports, the maximum is four 
hours. 
Table III.2 
Comparison of documentation requirements for exports and imports, 2005 
 Average for Latin America and the 
Caribbean Nicaragua 
Documents for export (number) 7.5 6 
Signatures for export (number) 8.0 4 
Time for export (days) 30.3 38 
Documents for import (number) 10.6 7 
Signatures for import (number) 11.0 5 
Time for import (days) 37.0 38 
Source : World Bank, information available at:  http://www. doingbusiness.org/ExploreTopic s/TradingAcrossBorders/. 
(ii) Customs procedures, clearance and customs valuation 
10. Importers must use the services of a licensed customs agent.  Article 17 of the 
CAUCA regulations (RECAUCA), however, determines a number of cases in which the services of a 
customs agent are optional (for example, imports by the Government or municipalities, or through 
postal or courier services for goods not exceeding US$1,000). 
11. Within the CACM, the International Customs Transit Regime Illustrative Declaration Form5 
sets out the rules for international customs overla nd transit.  The national regulations implementing 
these rules can be found in the regulations on the International Customs Overland Transit Regime. 
12. Customs procedures in Nicaragua have been streamlined, partly as a result of 
computerization.  The Automated System for Cu stoms Data (ASYCUDA++) is an international 
computer program developed by UNCTAD using the customs concepts of the WTO and the World Customs Organization (WCO).
6  ASYCUDA++ also allows electronic data interchange (EDI) 
between businesses and the customs authority using EDIFACT, the electronic data interchange for 
administration, commerce and transport system. 
13. The DGA is implementing a server centralization plan.  With the exception of some customs 
posts on the Atlantic coast, whose technological de velopment does not allow it, the other servers in 
Nicaragua have already been centrali zed so as to give auxiliary cust oms agents access to the computer 
system, allow them to make declarations 24 hours a day every day of the year and ensure payment of 
the duty through specified banking institutions that collaborate in the project.  It is hoped that users 
will see a significant improvement in performance and speed of access to servers and more uniform 
computerized customs procedures. 
14. There is an outline draft General Customs Law whose aim is to facilitate trade and 
incorporate all the CAFTA provisions.  Once it has entered into force, this Law will replace the 
Automatic Clearance Law, which was intended to be a comprehensive customs law but does not in 
fact cover all aspects of customs procedures.  Am ong the most important amendments it is hoped to 
incorporate in the General Customs Law is the inclus ion in one single legal instrument of a series of 
laws, decrees and national customs regulations (smuggling and custom s fraud, duty exemptions, etc.), 
                                                      
4 Including the time taken for travel from the border  to the warehouse, for unloading, preparation of the 
customs declaration by the customs agent and the customs procedures. 
5 Resolution No. 65-2001 (COMRIEDRE). 
6 The system is built on a client-server model that allows customs officials to be involved and 
economizes the authority's reso urces when capturing data. WT/TPR/S/167 Trade Policy Review 
Page 28 
 
 
which are currently dispersed and thus difficult to implement, eliminating those rules covered by the 
CAUCA and its regulations.7 
15. Since June 2002, Nicaragua has determined customs value according to the Agreement on 
Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (Customs 
Valuation Agreement) and it includes tr ansport, handling and insurance costs.8  Nicaragua's customs 
valuation legislation is contained in Resoluti on No. 115 of the Council of Ministers for Economic 
Integration and Trade (COMIECO), which in 2004 a pproved the Central Americ an Regulations on the 
Valuation of Goods for Customs Purposes.  Accord ing to the authorities, these Regulations are based 
on the WTO Customs Valuation Agreement.  COMIECO Resolution No. 115 superseded 
Law No. 421, Law on Customs Valuation amending Law No. 265.9  On 28 April 2000, the 
WTO Committee on Customs Valuation decided to a llow Nicaragua to continue using officially 
established minimum values for the valuation of certain  tyres, clothing, rags and other textile articles 
and used vehicles until 3 September 2002 and, in the case of sugar, until 3 September 2003.10  
According to the authorities, these minimu m prices were abolished on the dates set. 
16. In 1997, Nicaragua abolished price ba nds for imports (Chapter IV(2)(ii)).11 
17. Nicaragua is not party to the Convention on th e Valuation of Goods for Customs Purposes, 
administered by the WCO.  The only WCO-administer ed agreement to which Nicaragua is party is the 
Convention on Establishing a Customs Co-operation Council.12 
(iii) Rules of origin 
18. Nicaragua does not apply any non-preferential rules of origin and has no relevant legislation.  
Preferential rules of origin only apply under trade agreements it has signed.  They are based on the 
substantial transformation criterion, notably a change in tariff classification;  value added and other 
criteria such as de minimis  prices, expendable goods, inter alia , are used to a lesser extent.  Under 
these agreements, a certificate of origin must be submitted when seeking preferential tariff treatment, 
except in the case of the CACM, where origin is cer tified in the import document (customs form). 
19. In 2005, Nicaragua acceded to the Central American Regulations on the Origin of Goods.13  
Article 3 provides that specific rules of origin sha ll be based on a change in the tariff classification, 
but when necessary other criteria may be used, as set out in the annex to the Regulations. 
                                                      
7 The draft Law is currently being reviewed by a team of jurists from the Ministry of Finance, the 
Ministry of Development, Industry and Trade (MIFIC) and the DGA with the aim of incorporating as far as 
possible the comments put forward by the private sector.  The draft Law depends upon IDB financing for 
Nicaragua. 
8 In 1995, Nicaragua had recourse to Article 20.1  of the WTO Customs Valuation Agreement in order 
to extend for a period of five years the time-limit for the Agreement's full implementation.  Consequently, the implementation of the Agreement's provisions wa s deferred in Nicaragua until 3 September 2000. 
9 La Gaceta  No. 111 of 14 June 2002. 
10 WTO document G/VAL/25 of 5 May 2000. 
11 WTO (1999). 
12 The WCO Conventions, as well as the status of Nicaragua and other countries, are summarized at:  
http://www.wcoomd.org/ie/en/Co nventions/conventions.html. 
13 Approved by Resolution No. 146 (COMIECO-XXXII) of 26 September 2005. Nicaragua WT/TPR/S/167 
 Page 29 
 
 
(iv) Tariffs, other duties and taxes 
(a) Structure of the MFN tariffs applied 
20. In 1997, Nicaragua introduced a tariff reduc tion policy and by 2003 the process had been 
completed.  The policy was supplemented by fi scal reforms in 2002 and 2003, which introduced 
further tariff modifications.  Despite these re ductions, the simple average MFN tariff rose from 
4.2 per cent in 1999 to 5.8 per cent in 2005 (Table  III.3), on the one hand because of increases in 
some tariffs (for example, on cheese and other dair y products) and, on the other, as a result of 
Nicaragua's commitments within the CACM (Chapter  IV(2)(ii)).  According to the WTO definition, 
the average MFN tariff on agricultural products in 2005 was 11.4 per cent (7.9 per cent in 1999), 
compared to 4.8 per cent on non-agricultural products  (3.4 per cent in 1999).  According to the 
ISIC (Revision 2) definition, the average MFN tari ff in the manufacturing sector increased (to 5.7 per 
cent from 4 per cent in 1999), in agriculture (8.5 per cent from 6.6 per cent in 1999), and in mining and quarrying (2.2 per cent from 2 per cent in 1999). 
21. One of the reasons for the recent tariff reform has been harmonization of the CACM's CET, 
which ranges from 0 to 15 per cent on the majority of goods.  Nicaragua's customs tariff, also known 
as the import duty (DAI), is based on the Central Am erican Tariff System (SAC) which, in turn, is 
based on the Harmonized Commodity Description and Coding System (HS).  All tariffs, whether applied or bound, are ad valorem .  Pursuant to the provisions in the Convention on the Central 
American Tariff and Customs Regime, Nicaragua and the other CACM member countries apply a 
tariff policy based on the following rates:  0 per cent on capital goods and raw materials not produced 
in the region;  5 per cent on raw materials produ ced in the CACM;  10 per cent on intermediate goods 
and capital goods produced in the CACM;  and 15 per cent on final consumer goods. 
22. The main exceptions to the general rule in this  tariff structure apply to agricultural products, 
many of which are subject to tariffs that far exceed 15 per cent.  The average duty applied on 
agricultural products (WTO definition)
14 was 11.4 per cent in 2005, almost double Nicaragua's 
average tariff of 5.8 per cent on all products (Table  III.4).  This sector contains many of the tariff 
peaks in Nicaragua's Schedule XXIX, as high as 60 per cent for some dairy products, 60 per cent for 
some cereals and 170 per cent for certain poultry cuts (HS 0207.13 and 0207.14). 
Table III.3 
Structure of MFN tariffs in Nicaragua, 1999-2005 
(Percentages) 
  1999 2000 2001 2002 2003 2004 2005 
1. Tariff lines bound (% of all lines) 100.0 100.0 100.0 100.0 100.0 100.0 100.0 
2. Duty-free tariff lines (% of all lines) 46.9 46.9 46.8 47.2 46.9 46.6 46.8 
3. Non- ad valorem  tariffs (% of all lines) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
4. Tariff quotas (% of all lines) 0.0 0.0 0.1 0.1 0.1 0.2 0.2 
5. Non- ad valorem  tariffs with no AVEs (% of all lines) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Table III.3 (cont'd)
                                                      
14 As provided in Article 2 of Annex 1 to the Agreement on Agriculture, the WTO definition of 
agricultural products includes the following headings:  Chapters 01-24 of the HS, excluding fish and fish products (namely, HS headings 0301-0307, 0509, 0511.91, 1504, 1603-1605 and 2301.20), some specific 
products in other chapters (namely, HS headings 2905.43, 2905.44, 2905.45, 3301, 3501-3505, 3809.10, 
3823.11-3823.19, 3823.60, 3823.70, 3824.60, 4101-4 103, 4301, 5001-5003, 5105-5103, 5201-5203, 5301 and 
5302). WT/TPR/S/167 Trade Policy Review 
Page 30 
 
 
  1999 2000 2001 2002 2003 2004 2005 
6. Simple average rate 4.2 4.2 5.1 5.1 5.1 5.3 5.8 
      Agricultural products (WTO definition)a 7.9 8.0 9.9 9.9 10.2 10.6 11.4 
      Non-agricultural products (WTO definition)b 3.4 3.4 4.3 4.2 4.2 4.3 4.8 
      Agriculture, hunting, forestry and fishing (ISIC 1) 6.6 6.7 8.4 8.4 8.3 8.3 8.5 
      Mining and quarrying (ISIC 2) 2.0 2.0 2.2 2.2 2.1 2.1 2.2 
      Manufacturing (ISIC 3) 4.0 4.0 5.0 4.9 5.0 5.2 5.7 
7. Domestic tariff peaks (% of all lines) c 0.9 0.9 0.5 0.4 0.5 0.9 0.9 
8. International tariff peaks (% of all lines)d 0.4 0.8 0.5 0.4 0.5 0.9 0.9 
9. Overall standard deviation in rate s applied 5.8 5.8 6.9 6.9 7.1 6.8 7.6 
10. "Nuisance" duties applied (% of all lines)e 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
a WTO Agreement on Agriculture. 
b Excludes petroleum. 
c Domestic tariff peaks are duties that ar e higher than three times the simple aver age of the rates applied (indicator 6). 
d International tariff peaks are duties that exceed 15 per cent. 
e "Nuisance" duties are rates that are not 0 pe r cent but less than or equal to 2 per cent. 
Source : WTO Secretariat calculations  based on data provided by the Nicaraguan authorities. 
23. Nicaragua's current tariff structure is fairly  simple.  Almost half of the products in 
Schedule XXIX are duty free on an MFN basis and all tariffs are expressed in ad valorem  terms 
(Table III.3).  Very few rates are set at the "nuisan ce" level of between 0 and 2 per cent or at the 
international "peak" level of more than 15 per cent;  in 2005, 99.1 per cent of all Nicaragua's tariff 
lines were either zero or fell somewhere between the "nuisance" and "peak" levels. 
Table III.4 
Summary analysis of Nicaragua's MFN tariffs, 2005 
  Rates applied in 2005 Imports 2004b 
(US$ million) 
Analysis Number 
of linesa Number of 
lines used Simple 
average 
tariff  
(%) Range 
(%) Standard 
deviation 
(%) CV  
Total 6,528 6,528 5.8 0-170 7.6 1.3 2,203.0 
By WTO definitionc               
Agricultural products 1,025 1,025 11.4 0-170 12.1 1.1 300.8 
     Live animals and animal products 133 133 16.4 0-170 20.4 1.2 10.6 
     Dairy products 38 38 26.1 0-60 19.0 0.7 9.9 
     Coffee and tea, cocoa, sugar, etc. 176 176 12.6 0-55 10.8 0.9 123.2 
     Cut flowers and plants 59 59 5.8 0-15 7.0 1.2 1.3 
     Fruit and vegetables 217 217 13.3 0-30 4.6 0.3 17.4 
     Grains 22 22 17.9 0-61 23.4 1.3 27.5 
     Oilseeds, fats, oils and their products 123 123 7.3 0-15 5.4 0.7 65.1 
     Beverages and spirits 63 63 15.0 0-40 9.9 0.7 21.7 
     Tobacco 19 19 6.1 0-15 5.2 0.9 14.2 
     Other agricultural products 175 175 3.8 0-15 4.9 1.3 10.0 
Non-agricultural products (excluding 
petroleum) 5,475 5,475 4.8 0-15 5.8 1.2 1,448.0 
     Fish and fish products 146 146 9.4 0-15 5.4 0.6 3.6 
     Mineral products, precious stones and 
     precious metals  358 358 5.1 0-15 5.9 1.2 115.7 
     Metals 712 712 2.9 0-15 4.9 1.7 157.2 
     Chemicals and photographic supplies 1,095 1,095 2.5 0-15 4.6 1.9 387.5 
     Leather, rubber, footwear and travel 
     goods 220 220 7.3 0-15 5.5 0.8 55.5 
     Wood, pulp, paper and furniture 418 418 5.8 0-15 5.8 1.0 114.9 
Table III.4 (cont'd)Nicaragua WT/TPR/S/167 
 Page 31 
 
 
  Rates applied in 2005 Imports 2004b 
(US$ million) 
Analysis Number 
of linesa Number of 
lines used Simple 
average 
tariff  
(%) Range 
(%) Standard 
deviation 
(%) CV  
     Textiles and clothi ng  940 940 8.1 0- 15 5.3 0.7 68.3 
     Transport equipment 200 200 5.6 0-15 4.6 0.8 132.7 
     Non-electric machinery 562 562 1.5 0-15 4.1 2.7 156.6 
     Electric machinery 303 303 3.5 0-15 5.8 1.7 170.1 
     Non-agricultural articles, n.e.s. 521 521 6.6 0-15 6.5 1.0 85.9 
By ISIC sectord        
Agriculture, hunting, forestry and fishing 422 422 8.5 0-45 6.5 0.8 46.4 
Mining 110 110 2.2 0-15 3.6 1.6 248.5 
Manufacturing 5,995 5,995 5.7 0-170 7.6 1.3 1,841.2 
By stage of processing        
Raw materials 818 818 6.8 0-61 7.5 1.1 326.3 
Semi-processed products 2,102 2,102 3.2 0-55 5.2 1.6 274.4 
Fully processed products 3,608 3,608 7.1 0-170 8.3 1.2 1,535.5 
a Includes the total number of lines. 
b The figure for total imports is higher than the sum of the subh eadings as products not classified in the HS were imported in an 
amount of US$66.8 million. 
c Twenty-eight tariff lines are excluded from both WTO agriculture and non-agricu lture definitions (essentially petroleum 
products). 
d International Standard Industrial Classi fication of all Economic Activities (Revision 2).  Electricity, gas and water are exc luded 
(one tariff line). 
Note: CV = coefficient of variation. 
Source : WTO Secretariat estimates based on da ta provided by the Nicaraguan author ities.  Data on imports in 2004 are 
taken from the Comtrade database of the United Nations Statistical Division. 
24. As can be seen from the figures in Chart III.1, nearly half of the tariff lines in Nicaragua's 
Schedule are zero.  The second most common rate is 15 per cent, which applies to just over one fifth 
of the total number of lines; the majority of other rates are 5 or 10 per cent.  The somewhat bimodal 
pattern in which most tariffs are either in the mi nimum or maximum of the four major tariff bands 
explains the relatively high coefficient of variati on (1.3) seen in Table III.4.  Less than 1 per cent of 
the products in Nicaragua's Schedule are subject to  a tariff of 20 per cent or more, but a few reach 
170 per cent;  these peaks include some goods that are commercially important (notably in the 
agricultural sector).  Chart III.2 shows that this di stribution closely shadows that in the manufacturing 
sector, which accounts for the largest number of tariff lines.  The 15 per cent rate is the most common 
one for agricultural products and applies to around one third of them, whereas two thirds of mining 
products are duty free. WT/TPR/S/167 Trade Policy Review 
Page 32 
 
 
(0,9)(21,6)
(11,9)(18,8)(46,8)
05001,0001,5002,0002,5003,0003,500
0% 5% 10% 15% >20%0102030405060708090100
The figures within brackets correspond to percentages of the total lines.
WTO Secretariat calculations based on data provided by the Nicaraguan authorities.Chart III.1
Breakdown of applied MFN tariffs, 2005
Number of tariff lines
Note:
Sourc e:Percentage
Number of lines
Cumulative percentage (right-hand scale)
 
 
25. In 2005, the average tariff on manufactures was 5. 7 per cent, in other words, almost identical 
to the overall average figure of 5.8 per cent.  Th is is not surprising inas much as manufactures account 
for 83.6 per cent of tariff lines.  Most tariffs on manufactures range from 0 to 15 per cent.  The average tariff was lower for mining and quarrying products (2.2 per cent). 
26. Nicaragua's applied MFN tariff structure shows a partial inversion rather than a simple 
escalation as the level of processing increases (Table  III.4).  In general, tariffs on raw materials 
(6.8 per cent) are more than twice as high as the tariffs on semi-processed products (3.2 per cent).  
The highest tariffs are imposed on fully processed products (7.1 per cent).  Only three industries 
(textiles and clothing, wood products , and paper and publishing) confor m to the standard pattern of 
tariff escalation in which zero or low duties apply to raw materials, higher rates to semi-processed 
products and the highest rates to fully processed pr oducts (Chart III.3).  The partial inversion is 
particularly noticeable in the food and beverage i ndustry, where semi-processed products are subject 
to higher tariffs than fully processed products.
15 
                                                      
15 Another non-standard pattern can be seen in three types of non-agricultural products – chemicals and 
plastics, non-metallic mineral products and other manufact ures – where semi-processed  products are subject to 
lower tariffs than raw materials or fully processed products. Nicaragua WT/TPR/S/167 
 Page 33 
 
 
46,8
47,6
66,4
29,418,8
19,2
26,4
11,611,9
11,4
4,5
20,621,6
20,8
2,7
37,90,9
1,0
0,5
05001,0001,5002,0002,5003,0003,500All products
Manufacturing
Mining
Agriculture
0 5 10 15 >20Chart III.2
Breakdown of MFN tariffs by ISIC sectora, 2005
Number of lines
a            The figures correspond to the percentage of the total number of tariff lines by sector.  
Source:  WTO Secretariat calculations based on data provided by the Nicaraguan authorities.
 
(b) Bound MFN tariffs and undertakings on quotas 
27. Nicaragua bound its tariffs on the vast majority of  products at a ceiling rate of 40 per cent.  
These bound rates started to be applied in full in ear ly 2004 after gradually being reduced from the 
maximum rate of 60 per cent.  Nicaragua also specified 64 exceptions to the ceiling rate bound and 
these were variously identified at the 4-, 6- or 8-digit levels (Table III.5).  They include 36 agricultural products and 28 non-agricultural prod ucts.  Forty of these have been bound above the 
maximum ceiling at a rate of 60 per cent, two at 70 per cent, 13 at 75 per cent, three at 100 per cent 
and two at 200 per cent.  Three types of rice are subj ect to a tariff of 61 per cent, one percentage point 
higher than the bound level.
16 
                                                      
16 The MFN tariff on rice will fall from 61 to 60 per cent pursuant to Ministerial Agreement 022-2006. WT/TPR/S/167 Trade Policy Review 
Page 34 
 
 
0.05.010.015.0Chart III.3
Tariff escalation at the ISIC 2-digit level, 2005
Percentage
All products
Food products,
beverages
Textiles,
clothing
Wood products
Paper,
publishing
Chemicals ,
plastic products
Non-metalli c
minera l
products
Base meta l
products
Processed meta l
products
Other
manufacturesNOTAPPLICABLEAgriculture
MiningRaw materials Semi-processed products Fully processed products
NOTAPPLICABLE
Sourc e:   WTO Secretariat estimates based on data provided by the Nicaraguan authorities. 
 
28. With the exception of rice, most of the products for which Nicaragua has above-ceiling 
bindings are actually subject to applied tariffs that ar e lower than the bindings.  In fact, in most cases, 
the applied tariffs on these products are lower than  the general bound ceiling of 40 per cent.  In the 
case of textile fibres and fabrics, for example, th e bound rates for many products range from 60 to 
100 per cent, but the applied rates are typically between 0 to 15 per cent. 
29. During the Uruguay Round, Nicaragua had to re negotiate its initial tariff schedule submitted 
for the purpose of its accession to the GATT with Ca nada, the United States and the EC, with initial 
negotiating rights.  According to the authorities, onl y Canada wished to rene gotiate certain products 
and the matter was settled bilaterally.17 
30. According to the authorities, in order to minimize price increases caused by shortages of 
certain products on the domestic ma rket, import quotas are still used for rice in the husk, yellow 
maize, powdered milk, sugars and so ybean flour.  There are also still quotas for certain cuts of meat 
for the tourist industry and franchises (Table III.6). 
                                                      
17 The arrangement between Nicaragua and Ca nada has not been notified to the WTO. Nicaragua WT/TPR/S/167 
 Page 35 
 
 
Table III.5 
Exceptions to the bound ceiling of 40% 
Tariff  heading  Description  Bound tariff 
(%) Applied tariff 
(%) 
0201 Meat of bovine animals, fresh or chilled 60 30 
0202 Meat of bovine animals, frozen 60 30 
0203 Meat of swine, fresh,  chilled or frozen 60 15 
0207.11 Meat and edible offal of po ultry, not cut in pieces, fresh or 
chilled 60 30 
0207.12 Meat and edible offal of pou ltry, not cut in pieces, frozen 60 30 
0207.13 Meat and edible offal of poultry, cuts and offal, fresh or 
chilled 200 5-170 
0207.14 Meat and edible offal of poultry, cuts and offal, frozen 200 5-170 
0207.24 Meat and edible offal of tu rkeys, not cut in pieces, fresh or 
chilled 60 15 
0207.26 Meat and edible offal of turkeys, cuts and offal, fresh or 
chilled 200 5-15 
0207.32 Meat and edible offal of ducks, geese or guinea fowls, not cut 
in pieces, fresh or chilled 60 15 
0207.35 Meat and edible offal of ducks, geese or guinea fowls, fresh or 
chilled 200 15 
0401 Milk and cream, not concentr ated nor containing added sugar 
or other sweetening matter 75 15 
0402 Milk and cream, concentrated or containing added sugar or 
other sweetening matter 75 10-60 
0403 Butter milk, curdled milk and cream, yoghurt  75 15-40 
0405.10 Butter 75 40 
0405.20 Dairy spreads 75 15 
0405.90.90 Other 75 15 
0406 Cheese and curd 75 0-40 
0713.31 Beans ( porotos, alubias, fríjoles, fréjoles ) of the species Vigna 
mungo Hepper   60 15 
0713.32 Small red (Adzuki) beans ( porotos, alubias, fríjoles, fréjoles ) 
(Phaseolus  or Vigna angularis ) 60 30 
0713.33 Kidney beans ( porotos, alubias, fríjoles, fréjoles ) (Phaseolus 
vulgaris ) 60 10-30 
0713.39 Other 60 15 
1005.90.30 White maize 60 15 
ex1005.90.90 Yellow maize 60 15 
1006.10.90 Rice, other 60 45 
1006.20.00 Husked (brown) rice 60 61 
1006.30.00 Semi-milled or wholly milled rice, whether or not polished or 
glazed 60 61 
1006.40.00 Broken rice 60 61 
1007.00.90 Grain sorghum, other 60 20 
1102.20.00 Maize (corn) flour 60 5 
1102.30.00 Rice flour 60 5 
1103.13 Maize groats and meal 60 0-5 
1103.19.20 Rice groats and meal 60 5 
1202.10.90 Other groundnuts, not roasted or otherwise cooked, whether or 
not shelled or broken 60 10 
1202.20.90 Other, shelled, whether or not broken, but not for sowing 60 10 
1507 Soyabean oil and its fractions, whether or not refined, but not 
chemically modified 60 0-15 
1511 Palm oil and its fractions, wh ether or not refined, but not 
chemically modified 60 0-15 
1512.21 Crude oil, whether or not gossypol has been removed 60 0 
1512.29 Other 60 15 
1701 Cane or beet sugar a nd chemically pure sucrose, in solid form 100 55 
2203.00 Beer made from malt 75 15 
2208.40.10 Rum 75 40 
2401 Unmanufactured tobacco, tobacco refuse 75 0-5 
2402 Cigars, cheroots, ciga rillos and cigarettes 75 15 
2523.21 White Portland cement, whether or not artificially coloured 70 0 
2523.29 Other 70 10 
2523.90 Other hydraulic cements 70 10 
3605.00 Matches 60 15 
Table III.5 (continued)WT/TPR/S/167 Trade Policy Review 
Page 36 
 
 
Tariff  heading  Description  Bound tariff 
(%) Applied tariff 
(%) 
5303 Jute and other textile bast fi bres, raw or processed, but not 
spun 75 0 
5307 Yarn of jute or of other textile  bast fibres of heading 5303 75 5 
5310 Woven fabrics of jute or of othe r textile bast fibres of heading 
5303 100 5 
5507 Artificial staple fibres, carded, combed or otherwise processed 
for spinning 75 0 
5608 Fishing nets 60 5 
Chapter 61 Articles of apparel a nd clothing accessories, knitted or 
crocheted 60 0-15 
Chapter 62 Articles of apparel and clothing accessories, not knitted or 
crocheted 60 15 
6305 Sacks and bags, of a kind used for the packing of goods 100 5 
6309 Worn clothing and worn textile articles 60 15 
6310 Used or new rags, scrap twine, cordage, rope and cables and 
worn-out articles of twine, cordag e, rope or cables, of textile 
materials  60 5-15 
6403 Footwear with outer soles of r ubber, plastics, leather, etc. 60 15 
6404 Footwear with outer soles of other materials 60 10-15 
6405 Other footwear 60 15 
ex6406 Ankle boots, gaiters and parts thereof 60 5-10 
8702 Motor vehicles for the transport of 10 or more persons, 
including the driver 60 5-10 
8703 Motor cars and other motor vehi cles principally designed for 
the transport of persons 60 5-10 
8704 Motor vehicles for the transport of goods 60 0-5 
8705 Special-purpose motor vehicles 60 0-10 
8711 Motorcycles 60 5 
8714.1 Motorcycle parts and accessories 60 10 
8716.20.00 Trailers and semi-trailers for agricultural use 60 0 
Note: The description of some products ha s been abbreviated for reasons of space. 
Source : WTO Secretariat estimates based on information provided by the Nicaraguan authorities. 
31. According to the authorities, these quotas were fi xed because of an incr ease that exceeded the 
bound rate for tariff quotas inasmuch as the DAI or tariff on rice and powdered milk was raised to a level that exceeded the bound tariff in Part I, Sec tion I-B, of Nicaragua's Schedule XXIX:  (i) in the 
case of rice, annual quotas were determined for a total average volume of 100,000 metric tonnes, 
i.e., more than the commitment undertaken in the WTO;  (ii) the applied tariffs ranged from 0 to 
20 per cent, i.e., below the bound tariff for this quota (40 per cent);  and (iii) in the case of powdered 
milk, the volume was the same as that bound in Sche dule XXIX, at a tariff of 20 per cent, less than 
the bound tariff for the quota, which is 40 per cent.  For the other products in respect of which 
Nicaragua bound commitments on tariff quotas, the applied tariffs continue to be less than the levels 
bound in Nicaragua's Schedule XXIX. 
32. The mechanism used to administer  tariff quotas is the traditional one.
18  When allocating 
quotas, an adequate percentage of the total quota is set aside for new importers.  The latter are usually 
allocated quotas on a "first come, first served" basi s, upon request or using a combination of other 
methods, always bearing in mind th e volume of economic interest. 
                                                      
18 This method consists of allocating volumes to  traditional importers based on their consecutive 
imports of the product in question over a representative period. Nicaragua WT/TPR/S/167 
 Page 37 
 
 
Table III.6 
Tariff quotas determined by Nicaragua, 2001-2005 
(Volumes in metric tonnes (MT)) 
Tariff lines Product Initial date 
and final date Volume 
allocated Volume 
used Preferential 
tariff 
(%) 
1006.10.90.10 Rice in the husk 01/01/2001 to 
31/12/2001 100,000 10,450.00 20 
1006.10.90.10 Rice in the husk 01/03/2001 to 
30/09/2001 and 
01/10/2001 to 
30/09/2002 158,663 155,503.03 20 
1006.10.90.00 Rice in the husk 01/10/2002 to 
30/09/2003 100,208 20 
1006.10.90.00 Rice in the husk 08/07/2003 to 
30/09/2003 24,000 124,208.00 
20 
1006.10.90.00 Rice in the husk 01/10/2003 to 
30/09/2004 100,000 98,888.85 10 
1006.10.90.00 Rice in the husk 25,000 24,722.16 
1006.40.00.00 Broken rice 01/08/2004 to  
30/09/2004 01/08/2004 to 
30/09/2004 5,000 3,076.76 0 
0 
1006.10.90.00 Rice in the husk 01/10/2004 to 
31/12/2004 25,000 25,000.00 10 
1006.10.90.00 Rice in the husk 01/01/2005 to 
30/09/2005 75,000 74,374.65 10 
1006.10.90.00 Rice in the husk 01/06/2005 to 
31/12/2005 40,000 33,136.63 10 
1006.10.90.00 Rice in the husk 16/08/2005 to 
31/12/2005 25,000 17,751.84 10 
1006.40.00.00 Broken rice 26/08/2005 to 
30/09/2005 1,500 0.00 10 
0402.10.00.00 Skimmed milk 01/04/2001 to 
31/03/2002 1,855 643.00 20 
0402.10.00.00 Skimmed milk 10/05/2001 to 
31/03/2002 120 72.00 20 
0402.21.22.00 Whole milk 10/05/2001 to 
31/03/2002 260 60.03 20 
0402.10.00.00 Skimmed milk 15/03/2002 to 
14/03/2003 200 200.00 20 
0402.21.21.00 Whole milk 09/08/2002 to 
31/12/2002 962 925.82 20 
0402.10.00.00 Skimmed milk 05/09/2002 to 
31/12/2002 100 32.00 20 
0402.10.00.00 Skimmed milk 01/05/2003 to 
31/12/2003 590 509.91 20 
0402.21.21.00 Whole milk 01/05/2003 and 
15/10/2003 to 
31/12/2003 1,075 934.39 20 
0402.10.00.00 Skimmed milk 15/02/2004 to 
31/12/2004 700 508.44 20 
0402.21.21.00 Whole milk 15/02/2004 to 
30/05/2004 and 
01/10/2004 to 
31/12/2004 1,043 1,036.89 20 
0402.10.00.00 Skimmed milk 24/01/2005 to 
31/12/2005 700 399.95 20 
0402.21.21.00 Whole milk 24/01/2005 to 
30/05/2005 and 
01/10/2005 to 
31/12/2005 1,043 211.33 20 
Source : Information provided by the Nicaraguan authorities. WT/TPR/S/167 Trade Policy Review 
Page 38 
 
 
(c) Duty and tax concessions 
33. Nicaragua's concessional imports scheme w as substantially revised during the period 
1997-1999 when a new tax law was adopted19 in order to limit tax evasion by specifying those items 
exempt from tax and by abolishing the administration' s discretionary authority to make exceptions to 
the law or grant tariff exemptions.  At present, the following products may be imported duty free: 
 - Raw materials, intermediate goods and cap ital goods to be used in the agricultural 
sector, small-scale industry and artisanal fishing.20  Replacement parts, spare parts 
and accessories for machinery and equipment in these production sectors are also exempt until 30 June 2009
21; 
 
 - crude or partly refined or reconstituted petroleum and certain petroleum by-products; 
  - temporary imports for processing enterprises in free zones;   - machinery, equipment, materials and input s to be used to generate, transmit and 
distribute electricity (for a three-year period from the date on which the concession 
permit was granted)
22; 
  - imports for the purpose of building hotels or leisure centres;  
 - orthopaedic appliances, medicines and v accines for human use, as well as inputs and 
raw materials used to produce them
23; 
  - materials, equipment, furnishings, ut ensils and machinery for the building and 
operation of hospitals  and their annexes
24; 
 
 - material to be used for the activities of certain educational and public interest 
institutions (fire brigade, Red Cross); 
  - paper, machinery and equipment fo r the mass media (press, broadcasting); 
 
 - books, newspapers, magazines, school and scientific materials; 
  - machinery and equipment, asphalt and vehicles purchased by municipal authorities 
for construction, maintenance and cleaning of the road network;  and 
 
 - temporary entry of goods (for example, laptop computers, commercial samples, 
professional equipment and materials for exhibitions).
25 
                                                      
19 WTO (1999). 
20 Law No. 257 of 4 June 1997 and Law No. 303 of 24 March 1999. 
21 Law No. 257 of 4 June 1997, Law No. 303 of 24 March 1999, Law No. 453 of 6 May 2003 and 
Law No. 528 of 31 May 2005. 
22 Law No. 453 of 6 May 2003. 
23 Article 114, Law No. 192, Law on Partial Reform of the Political Constitution of the Republic of 
Nicaragua of 15 June 1995 and Law No. 257 of 4 June 1997. 
24 Decree No. 520 of 5 August 1 960 and amendments thereto. 
25 Upon entry of these goods, a deposit must be made  with the Customs equal to the tariffs and other 
charges that would be paid for permanent import of the same item.  This deposit, which must be made on the Nicaragua WT/TPR/S/167 
 Page 39 
 
 
 
34. The CACM provisions allow these forms of concessi onal entry, which must be authorized by 
the Central American Tariffs Council;  in practice, this rule has applied on an ex post  basis.26  Since 
May 2006, raw materials and selected capital goods not  produced in the region may be imported duty 
free. 
(d) Tariff preferences 
35. Under trade agreements it has signed, Nicaragua grants tariff preferences to the other four 
members of the CACM and to Mexico, the Dominican Republic and the United States of America.  No other trading partners presently receive prefer ential access to Nicaragua's market.  Nevertheless, 
Canada, Chile, Chinese Taipei and Panama
27 will receive preferential treatment once the respective 
FTAs come into effect (Chapter II(4)(ii)). 
36. The figures in Table III.7 show the extent to which three preferential agreements reduce the 
tariff barriers in the Nicaraguan market.  While less than half of all tariff lines were duty free on an 
MFN basis in 2005, the percentages were much higher for imports from Panama (63.9 per cent), 
Mexico (81.5 per cent) and the Dominican Republic (91.8 per cent).28  The figures in Table III.7 also 
reaffirm the earlier comments on the recent tariff increases.  In 2005, the percentage of duty free 
products was slightly lower than in 2000 and there was a large increase in the percentage of products 
subject to tariffs ranging from 10.1 to 20 per cent.  The percentage of products subject to tariffs 
exceeding 20 per cent also rose slightly. 
Table III.7 
Breakdown of MFN and preferential rates in Nicaragua's tariff 
(Percentage) 
 MFN 
(2000) MFN 
(2005) Mexico 
(2005) Dominican Republic 
(2005) Panama 
(2005) 
Duty free 46.90 46.59 81.47 91.78 63.92 
0.1-5.0% 27.10 18.91 16.64 2.06 16.26 
5.1-10.0% 25.07 11.85 1.05 0.49 4.49 
10.1-20.0% 0.54 21.70 0.52 5.30 15.12 
Over 20.0% 0.38 0.95 0.32 0.37 0.21 
Source : Information provided by the Nicaraguan authorities. 
(e) Other duties and taxes 
37. In addition to customs tariffs, Nicaragua impo ses the following additional taxes on imports:  a 
selective consumption tax (ISC);  the import services tax (TSIM);  and VAT. 
38. Since May 2003, pursuant to Law No. 453, the Fiscal Equity Law (Title IV), Nicaragua has 
levied the ISC, which replaced the specific consum ption tax (IEC) and applies to a limited number of 
non-essential goods.  According to the authorities, this tax applies to 14 per cent of imports in the customs tariff and the majority of imported goods su bject to the ISC are to be found in the groups to 
                                                                                                                                                                    
 
spot and may exceed 20 per cent of the value of the item, is returned when the items leave Nicaragua (not later 
than six months after entry).  This is covered by th e temporary import provisions in the CAUCA Regulations. 
26 Article 21 of the Convention on the Central American Tariff and Customs Regime of 1984, last 
updated in June 1997. 
27 Panama currently receives prefer ential treatment for some  products in accordan ce with a list in the 
context of Nicaragua-Pana ma preferential trade. 
28 These percentages refer to the tariff lines.  The value of these imports is almost US$10 million in the 
case of Panama, some US$180 million for Mexico and just over US$3 million for the Dominican Republic. WT/TPR/S/167 Trade Policy Review 
Page 40 
 
 
which the tariffs of 10 per cent, 15 per cent, 20 pe r cent and 30 per cent apply.  The ISC on domestic 
products is based on the manufacturer's price, whereas the ISC on imports is based on the c.i.f. value.  
In the case of alcoholic beverages and tobacco pr oducts, however, the ISC is based on the price 
charged to the retailer.  In 2003, the ISC on motor vehicles was amended in favour of engines with 
low cubic capacity;  the rates are currently 10 per cent (up to 1,600 cc), 15 per cent (from 1,601 to 
2,600 cc), 20 per cent (2,601 to 3,000 cc), 25 per cent (from 3,001 to 4,000 cc) and 30 per cent (over 
4,001 cc). 
39. The ISC includes a special levy on petroleum by -products and this is specific inasmuch as the 
taxable base is the amount consumed and the rates are fixed in US cents per American gallon 
(3.78 litres).  The ISC on fuel is considered to be the highest in Central America so the authorities are 
considering the possibility of lowering or even  abolishing it, which would make Nicaraguan 
producers and exporters more competitive. 
40. Nicaragua also applies an import services tax (TSIM), which is a customs commission 
amounting to US$0.50 or its equivalent in Nicaraguan cu rrency, per gross tonne or  fraction thereof.  It 
applies to any permanent import of goods, except tho se not of a commercial nature and sent by post.  
The TSIM is levied by the DGA.29 
41. The general value tax (IGV) was replaced by the value added tax (VAT) pursuant to the 
Fiscal Equity Law (Title III).  The general rate is 15 per cent, except for exports, for which the rate is 
zero.  VAT is paid on most transfers of goods (over 92 per cent of tariff lines) and services.  For imports, it is calculated on the c.i.f. value plus all entry-related taxes and services (TSIM and storage);  
for domestic products, it is based on the total invoice value and other taxes.
30 
42. The following products, inter alia , are exempt from VAT:  (i) books, pamphlets, magazines, 
school and scientific materials, ne wspapers and other periodicals, as  well as inputs and raw materials 
needed to produce them;  (ii) medicines, vaccines and serums for human use, orthotic and prosthetic 
appliances, as well as the machinery, equipment a nd spare parts, inputs and raw materials needed to 
produce them;  (iii) paper, machinery and equipment and parts for written, broadcasting and television 
mass media;  (iv) rice, beans, sugar, edible oil, gr ound coffee, tortillas, salt and soybeans;  (v) maize, 
sorghum, maize dough, wheat and maize flour, ordi nary bread and traditional buns, live yeast 
exclusively for making ordinary bread and tr aditional buns, pinole and pinole mixtures;  
(vi) domestically produced plants, fresh fruit, vege tables and other agricultural goods not processed or 
packaged, except for flowers or floral arrangeme nts;  (vii) eggs, processed milk, baby food 
preparations, infant formula, whole milk and li quid milk;  (viii) Nicaraguan home-made cheese;  
(ix) domestically produced toilet paper, toilet soap, detergents, bath soap, toothpaste and toothbrushes, 
deodorants, brooms, matches, sanitary towels, and butan e gas up to 25 lbs;  (x) live animals and fresh 
fish, except for molluscs and crustacean s;  (xi) fresh, chilled or frozen  beef or pork meat, intestines, 
except for loins and fillets, whether sold separ ately or as an integral part of the animal31;  and 
(xii) domestically produced trousers, skirts, shirts, und erpants, socks, shoes, slippers and rubber boots, 
military-type boots with leather uppers and rubber sol es for use in the field, blouses, suits, shorts, 
                                                      
29 Article 38 of Law No. 257 of 4 June 1997. 
30 The Ministry of Finance and Public Credit, together with the Ministry of Development, Industry and 
Trade (MIFIC) and the Ministry of Agriculture, Livestock and Forestry, decides on the classification of goods 
for the purpose of applying these wa ivers, in accordance with the Central American Ta riff Nomenclature (SAC) 
applicable. 
31 Provided that they have not been processed, stuffed or packaged. Nicaragua WT/TPR/S/167 
 Page 41 
 
 
brassieres, boys' and girls' shorts, vests, singlets, t-shirts, bodices, fabric napkins, boys' and girls' 
clothing.32 
43. The following services are exempt from VAT:  (i) human health services;  (ii) premiums 
under insurance policies against agriculture-rela ted risks or risks prescribed by the State33;  (iii) events 
organized by non-professional sportspe rsons or promoted by religious bodies provided that they are 
intended to fulfil the purpose for which they have b een set up;  (iv) internal, air, lake, river and 
maritime transport;  (v) teaching services provided by bodies or organizations whose main purpose is educational;  (vi) supply of energy and electricity fo r agricultural irrigation;  (vii) invoicing related to 
the supply of energy for domestic use up to 300 kw/h a month
34;  (viii) supply of drinking water, 
except for ice and bottled water;  (ix) interest on loans granted by authorized financing institutions, 
profit or non-profit making civil associations or founda tions, whether or not subject to the supervision 
of the Banking Superintendency or other financial in stitutions;  (x) contracts for the building of social 
housing35;  (xi) leasing of buildings inte nded for housing unless they are furnished;  and (xii) leasing 
of land, machinery or equipment for use in  agriculture, forestry or fish farming. 
44. Nicaragua levies a customs tariff for storage amounting to US$2/day per tonne of goods 
remaining in the warehouse for over 20 days calcula ted from the date of arrival in the warehouse.36  
This tariff is only levied when the goods are stor ed in a warehouse belonging to the DGA.  Consular 
fees were abolished when CAUCA III entered into  force (Article 54) (Chapter II(4)(ii)(a)). 
(f) Import charges 
45. The temporary protection tariff (ATP)37, introduced in 1994, was abolished at the end of 2001 
in accordance with the timetable laid down in  the Law on Tax and Business Equity and the 
amendments thereto. 
(v) Import prohibitions, restrictions and licensing 
46. Nicaragua imposes import prohibitions to protect human health, animal and plant life, the 
environment, or essential security and military inte rests in conformity with its legislation or 
international commitments. 
47. Imports of certain categories of product are subject to non-restrictive licensing in the form of 
prior authorization, which is imposed to protect the pu blic and/or national inter est.  In this connection, 
special permits are required to import agricultura l chemicals (Ministry of Natural Resources and 
Ministry of Agriculture), firearms and explosiv es (Ministry of the Interior) and foodstuffs and 
medicines (Ministry of Health).  Military wea pons may only be imported by the Nicaraguan army. 
48. In 1996, Nicaragua notified the WTO Committee on Import Licensing that it did not apply 
import licensing for products of any kind.38  It has not submitted any subsequent notifications to the 
                                                      
32 If enterprises approved under the free zone regi me sell these products on the local market, the 
VAT must be paid. 
33 Law No. 431, Law on the Traffic Regime  and Traffic Offences, published in La Gaceta  No. 15 of 
22 January 2003. 
34 If consumption exceeds this amount, the VA T is payable on the total consumption. 
35 Article 39 of Law No. 428, Basic Law on the Urban and Rural Housing Institute, published in 
La Gaceta  No. 109 of 12 June 2002. 
36 Law No. 257 of 4 June 1997. 
37 The stated objective of the ATP was to counteract the effects of the asymmetries resulting from the 
preferential trade treatment granted by  CACM members to Nicaragua, as we ll as to support the recovery and 
strengthening of the economy.  WTO (1999), Trade Policy Review of Nicaragua , Geneva. WT/TPR/S/167 Trade Policy Review 
Page 42 
 
 
Committee.  Nicaragua has not established any quan titative restrictions, with the exception of those 
bound in Part I, Section I-B, of Schedule XXIX relating to tariff quotas (section (iv)(b) above). 
49. Imports of cane sugar of CACM origin and et hyl alcohol (from Costa Rica) are still subject to 
surveillance;  the list of products subject  to surveillance is revised annually. 
(vi) Contingency measures 
(a) Anti-dumping and countervailing measures 
50. Nicaragua's anti-dumping and subsidies legisl ation is based on the Central American 
Regulations on Unfair Business Practices, in for ce since March 1996, and according to the authorities 
this is based on the relevant WTO agreements.39  If the CACM Regulations were found to conflict 
with WTO provisions, the latter would take preceden ce.  For goods of CACM  origin, the Executive 
Committee of the Secretariat of the General Trea ty for Central American Integration (SIECA) 
undertakes an examination or review and makes the relevant recommendations.  When more than one 
CACM member is affected by "unfair business"  practices, the SIECA and its Executive Committee 
are responsible for carrying out all the procedures,  while national authorities implement the measures 
decided upon. 
51. Law No. 29040 contains the provisions on appeals against anti-dumping or countervailing 
measures adopted by the Government, in this case through the MIFIC.  Cases relating to anti-dumping 
or countervailing measures are investigated by the MIFIC's Treaty Administration Directorate.  In 
2002, Nicaragua notified the WTO Committee on Anti- Dumping Practices of the amendments to its 
legislation governing appeals against and reviews of decisions taken by the investigating authority and 
the competent authority.41 
52. Nicaragua has not imposed any anti-dumping or countervailing measures with the exception 
of one anti-dumping measure on imports of c onfectionery not containing cocoa from Honduras.42  
Nicaragua has notified the WTO Committee on Anti-Dumping Practices and the Committee on 
Subsidies and Countervailing Measures that no anti-dumping or countervailing measures have been 
taken.43 
(b) Safeguards 
53. Since 1996, Nicaragua has implemented the CACM 's safeguard regulations and, according to 
the authorities, these are based on the WTO safeguard provisions.44 
54. In 2005, Nicaragua notified the WTO's Committee on Agriculture that it had activated the 
special safeguard provisions for four types of rice during the period 2002-2003, but had not used any 
special safeguards for these products since 2004.45  The special safeguard provisions in the 
                                                                                                                                                                     
38 WTO document G/LIC/N/1/NIC/1 of 5 August 1996. 
39 WTO (1999), Trade Policy Review of Nicaragua , Geneva. 
40 La Gaceta No. 102 of 3 June 1998. 
41 WTO document G/ADP/N/1/NIC/1/Suppl.1 of 26 July 2002. 
42 In 1999, the investigation and provisional duties were suspended when a price undertaking was 
agreed (WTO, 1999). 
43 The most recent of these notifications to the Committee on Anti-Dumping Practices is in 
WTO document G/ADP/N/65/NIC of 11 October 2000. 
44 Central American Regulations on Safeguard Measures and Ministerial Resolution of the 
CACM 19-96 (COMRIEDRE IV), of 22 May 1996; and WTO document SG/N/1/NIC/1 of 29 March 1995. 
45 WTO document G/AG/N/NIC/20 of 11 October 2005. Nicaragua WT/TPR/S/167 
 Page 43 
 
 
WTO Agreement on Agriculture allow an additional duty above the bound tariff level to be imposed 
when the volume or price of imports exceeds a specific trigger level.  In Nicaragua, these are applicable to nine-, four- or eight-digit headings of the HS (meat and dairy products) covered by the 
"tariffication" commitment under the Agreement.  Some  of these headings are included in the tariff 
quota commitment (section (iv)(b) above). 
55. Nicaragua has reserved the right to apply th e transitional safeguard mechanism provided in 
the WTO Agreement on Textiles and Clothing. 
(vii) Standards and other technical requirements 
56. Nicaragua's standards do not distinguish between  foreign and domestic goods .  Pursuant to its 
WTO and CACM commitments, Nicaragua has undertaken  to use international standards as a basis 
for drafting national standards.  The standards issued by the International Organization for 
Standardization (ISO), the Codex Alimentarius an d the Central American Research and Industrial 
Technology Institute (ICAITI) are used as a refere nce.  Nicaragua belongs to the ISO and the 
International Organization of Legal Metrology (O IML) and to the International Telecommunication 
Union (ITU) through TELCOR. 
(a) Standards 
57. The most important Nicaraguan laws in th is area are Law No. 219 or Law on Technical 
Standardization and Quality and its regulations
46, and Law No. 225 or Metrology Law and its 
regulations.47  The former created the National Commission on Standardization and Quality as the 
coordinating body for relevant policies and pr ogrammes.  The Commission is composed of 
representatives of the private sector, the scientific and technical sector, consumers and those public 
institutions deemed appropriate by the Ministry of the Economy and Development.  Currently, there 
are mandatory standards for construction products , food products, petrol eum products, commercial 
grains, inter alia . 
58. The Information Centre on Technical Barriers to Trade, under the MIFIC, is the national 
enquiry point responsible for providing informa tion on Nicaraguan mandatory technical standards 
(technical regulations), Nicaraguan technical standa rds (standards), matters relating to conformity 
assessment, metrology and quality syst ems management.  The Centre has dealt with all ISO standards 
since 1998, together with those of the Codex Alim entarius and the American Society for Testing 
Materials (ASTM), as well as some standards of ot her countries such as Spanish standards (UNE) and 
British standards (BSI). 
59. Nicaragua has made numerous notifications to the WTO Committee on Technical Barriers to 
Trade.  The topics covered include bottling of sp irits in polyethylene or polythene containers48;  
design and manufacturing specifications and test methods for portable liquefied petroleum gas 
cylinders49;  minimum specifications and test methods for the quick coupling valve used for the filling 
of and release of gas from liquefied petroleum gas (LPG) containers50;  guidelines for the stability 
studies requirement for the sanitary registration a nd first registration rene wal of medicinal products51;  
                                                      
46 La Gaceta  No. 123 of 2 July 1996. 
47 Law No. 225 (Metrology Law) was published in La Gaceta  No. 135 of 18 July 1996. 
48 WTO document G/TBT/N/NIC/41/Corr.1 of 20 October 2005. 
49 WTO document G/TBT/N/NIC/58 of 27 June 2005. 
50 WTO document G/TBT/N/NIC/60 of 27 June 2005. 
51 WTO document G/TBT/N/NIC/47 of 24 November 2004. WT/TPR/S/167 Trade Policy Review 
Page 44 
 
 
technical guidelines for the sustainable manageme nt of latifoliate and coniferous forests52;  standard to 
guarantee the accessibility and use of goods and ser vices to all people who suffer from limited or 
reduced mobility53;  and specifications for and characteristics of fresh potatoes for marketing.54 
(b) Sanitary and phytosanitary regulations 
60. The following are the principal laws dealing with sanitary and phytosanitary matters in 
Nicaragua:  Law No. 423, General Law on Health (2002) and its regulations;  Law No. 291, Basic 
Law on Animal and Plant Health and its regulations55;  Law No. 291, annex to the Basic Law on 
Animal and Plant Health and its regulations , which includes regulations on biotechnology56;  Law 
No. 280, Law on Seed Production and Trade57;  and Law No. 274, Basic Law on the Regulation and 
Control of Pesticides, Toxic and Other Similar Substances and its regulations.58  Nicaragua also 
applies the Central American Regulations on San itary and Phytosanitary Measures and Procedures.59 
61. The national enquiry point required by paragr aph 3 of Annex B to the Agreement on the 
Application of Sanitary and Phytosanitary Measur es is the Directorate General of Agricultural and 
Livestock Protection and Health in the Ministry of Agriculture, Livestock and Forestry (MAFOR).60 
62. The following are some of the notifications recently submitted by Nicaragua to the 
WTO Committee on Sanitary and Phytosanitary Me asures:  the National Classical Swine Fever 
Eradication Programme61;  the initiation of a process of brucellosis- and tuberculosis-free certification 
for farms62;  post-entry monitoring procedure for pl ant propagation material for commercial or 
research purposes63;  veterinary products prohibited or  restricted in Central America64;  Nicaraguan 
Technical Standard on Basic Requirements for the Safety of Vegetable Products and By Products65;  
guidelines for the production and certification of pu re and hybrid coconut plants, pollen and seeds 
used to establish commercial and ornamental plantations66;  procedures for obtaining a representative 
sample of seeds with a view to determining th eir physical, physiological and phytosanitary quality67;  
procedures and requirements for provision of agricultural treatment services68;  and provisions, 
requirements and procedures governing the producti on, export, import and marketing of certified 
forage grass and legume seeds.69 
63. In 1998, Nicaragua adopted Volume 9A of the Codex Alimentarius in order to improve access 
opportunities for its fisheries products in the mark ets of the European Communities (EC) and the 
                                                      
52 WTO document G/TBT/N/NIC/44 of 5 November 2004. 
53 WTO document G/TBT/N/NIC/43 of 25 October 2004. 
54 WTO document G/TBT/N/NIC/39 of 11 May 2004. 
55 La Gaceta  No. 136 of 22 July 1998. 
56 La Gaceta  No. 152, as amended on 13 August 2003. 
57 La Gaceta  No. 26 of 9 February 1998. 
58 La Gaceta  No. 142 of 30 July 1998. 
59 Approved by Resolution No. 37-99 (COMIECO-XIII) of 17 September 1999 and amended by 
Resolution No. 87-2002 (COMIECO-XXIII) of 23 August 2002. 
60 WTO document G/SPS/ENQ/17 of 20 October 2004. 
61 WTO document G/SPS/GEN/575 of 23 June 2005. 
62 WTO document G/SPS/GEN/576 of 23 June 2005. 
63 WTO document G/SPS/N/NIC/28 of 27 April 2005. 
64 WTO documents G/SPS/N/NIC/29 and G/SPS/N/NIC/30 both of 27 April 2005. 
65 WTO document G/SPS/N/NIC/19 of 17 February 2004. 
66 WTO document G/SPS/N/NIC/20 of 17 February 2004. 
67 WTO document G/SPS/N/NIC/21 of 17 February 2004. 
68 WTO document G/SPS/N/NIC/22 of 17 February 2004. 
69 WTO document G/SPS/N/NIC/23 of 17 February 2004. Nicaragua WT/TPR/S/167 
 Page 45 
 
 
United States.  Importers of pharmaceuticals must submit documentation to the Ministry of Health.  
Importers of products of animal or plant origin, livestock and food products must check with the 
MAFOR for the latest phytosanitary regulations and with the Ministry of Health for safety 
regulations.70 
(c) Marking, labelling and packaging 
64. The provisions on marking and labelling of foods tuffs for human consumption are laid down 
in NTON 03021-99.71  This standard corresponds to the C odex General Standard (Codex Stan 1-1985 
(Rev.1-1991)) for the labelling of pre-packaged foods  (global standard).  For other products, marking 
and labelling must comply with the provisions in  Law No. 182, Consumer Protection Law and its 
regulations.72 
65. Labels must show the origin of the product, its  ingredients, price, weight, date of production 
and sell-by date.  Information must also be given on  how to use the product and on any risks.  All this 
information must be in Spanish. 
(viii) Government procurement 
66. Law No. 323, Government Procurement Law, enacted in January 2000, is the principal 
government procurement law in Nicaragua.73  It replaced an earlier law74 that had been criticized for 
such shortcomings as the absence of controls, lega l lacunae and inconsistencies, discretionality in 
procurement, lack of transparency and failure to  apply government procurement principles.  The new 
Law, on the other hand, aims to lay down regulati ons and procedures for purchasing, leasing of goods, 
construction of works, advisory and other services.  According to the authorities, it provides 
efficiency, publicity and transparency, equity an d free competition, due process, confidentiality and 
accountability.  Nevertheless, one WTO member has indi cated that some contractors have complained 
of inadequate notificati on of pending procurement.75 
67. Law No. 323 governs all purchasing by the State,  except for certain cont racts by the Ministry 
of Defence and the national police force that could affect national security.  Other exclusions are procurement made using the petty cash fund ( caja chica ), procurement among public bodies and 
procurement for reasons of emergency, urgency, secu rity or public interest.  Article 3 of the Law 
determines the cases in which the regular governme nt procurement procedures do not have to be 
followed, which include the procurement mentioned above.  Purchases financed by loans or grants 
from foreign governments or international organi zations are governed by the procedures of the 
organization or government concerned. 
68. During the first month of each budgetary period, all the bodies subject to the Law must 
publish their planned procurement programme givi ng details of the goods, works and services to be 
procured through a bidding procedure, but publication does not imply any commitment to go ahead with the procurement or initiate the procedures.  I nvitations to participate in a bidding procedure must 
                                                     
 
70 Law No. 291, Basic Law on Animal and Plant Health of 1998;  and Decree No. 394 (Sanitary 
Provisions). 
71 La Gaceta  No. 20 of 28 January 2000, which came into effect on 28 January 2001. 
72 La Gaceta  No. 213 of 14 November 1994. 
73 The implementing regulations for Law No. 323 were published in March 2000 in 
Decree No. 21-2000.  Some of the provisions in Law No. 323 were amended by two other laws enacted in 
June 2000:  Law No. 349 and Law No. 427. 
74 Decree No. 809 of September 1981. 
75 USTR (2005), page 437. WT/TPR/S/167 Trade Policy Review 
Page 46 
 
 
be issued sufficiently in advance and using media easily accessible by the public so that interested 
bidders have an opportunity to take  part.  Each entity must ensure th at the report evaluating the bids is 
sent without delay to the highest authority in the cont racting agency with a copy to each bidder so that 
the latter may claim his rights within three working days of the evaluation.  Bidders have several 
types of appeal available if they consider that the rights conferred by the Law have been violated 
(there is a special procedure for each form  of appeal, which must be respected). 
69. Participation in government procurement requires registration in the Register of State 
Suppliers, kept by the MHCP.  Within the first m onth of each fiscal period (i.e., one calendar year), 
all authorities or ministries subject to the Law mu st publish a timetable of the tenders envisaged.  
Notices of public tenders are published in La Gaceta  and in two Nicaraguan newspapers with broad 
circulation.  They must include detailed informati on on the type of service to be procured, the projects 
to be undertaken, and the material or equipment to be purchased.  Public tenders may also be notified 
through electronic media when appropriate.  The authorities indicate that a new electronic procurement system is in the first phase of preparation. 
70. Law No. 323 provides for the following procurement procedures: 
 - Public bidding (contracts exceeding C$3.33 million).  Open bidding procedures must 
be followed and the bids published; 
  - bidding by registration (contracts amoun ting to C$932,400 to C$3.33 million).  The 
contracting agency invites all companies liste d in the Register to take part in the 
bidding procedure; 
  - restricted bidding (contracts amounting to C$133,000 to C$932,400).  Similar to the 
preceding category but the number of those inv ited to bid may be li mited to five;  and 
  - purchasing by quotation (contracts below C$133,000, periodically adjusted for 
devaluation).  The contracting agency must request at least three quotes from 
registered persons or companies. 
 71. Article 25 of Law No. 323 provides that the amounts determined for each type of bidding 
procedure to be followed will be updated by the MHCP when the córdoba/United States dollar 
exchange rate varies by more than 10 per cent.  All procurement offers must be accompanied by a 
performance bond or guarantee amounting to 1 to 3 per cent of the bid's value. 
72. According to the authorities, no price preference  is given to Nicaraguan suppliers over foreign 
suppliers. 
73. Nicaragua is not party to the WTO Plurilate ral Agreement on Government Procurement. 
(ix) Local content requirements 
74. Nicaragua's only notification to the WTO Co mmittee on Trade-Related Investment Measures 
dates back to 1996.
76  According to the authorities, since then no WTO-inconsistent local content 
measures have been in force. 
                                                      
76 WTO document G/TRIMS/N/1/NIC/1 of 21 August 1996. Nicaragua WT/TPR/S/167 
 Page 47 
 
 
(3) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Registration and documentation 
75. With some variations for exports to CACM countries or under FTAs signed by Nicaragua, the 
documentation required for export consis ts of the following four items:  original customs declaration;  
transport document (copy);  commercial invoice (copy);  and special permits (only for restricted 
products). 
76. All export documents must be processed through the single window for exports in the Centre 
for Export Procedures (CETREX), set up in 1994.77  The CETREX has several local offices to 
facilitate the processing of export documents78;  it charges a fee for its services and this is determined 
according to the f.o.b. value of the goods in Unite d States dollars.  For exports below US$2,000, the 
charge is C$50;  this rises to a maximum of C$500 for exports of US$25,000.01 or more. 
(ii) Export taxes and minimum prices 
77. According to the authorities, Nicaragua does not apply any export taxes or minimum export 
prices. 
(iii) Export prohibitions, restrictions, licensing and quotas 
78. Nicaragua still bans export of the following:  caoba roundwood (only the export of caoba in 
the form of sawn wood, plywood or veneered wood is allowed), spiny lobsters during their 
reproductive phase or spawning (with eggs), with sh ells (with sperm receptacle) or moulting, and 
estuary shrimps in the larval or juvenile phase. 
79. Nicaragua imposes export licensing requirements to ensure compliance with quality and 
health controls or to meet international commitm ents on international trade in wildlife under the 
Convention on International Trade in Wild Sp ecies of Fauna and Flora (CITES) (CITES export 
certificate).  Exports of sawn wood also require  a licence in the form of an authorization. 
80. Eligibility certificates are issued for products c overed by specific market access requirements 
in Mexico (meat and live cattle). 
81. Nicaragua's exports of fresh bovine meat a nd groundnuts (with shells or peeled) to the 
United States were subject to the annual tariff quotas agreed during the Uruguay Round, but on 
1 April 2006, the commitments made under the CAFTA replaced these quotas.79  Nicaragua also has 
export quotas for bovine meat, live cattle, cheese, beans and powdered milk under its FTA with 
Mexico.  Although the Central America-Dominican Republic FTA also gave Nicaragua export quotas 
for certain products such as bovine meat, shrimps, shallots, chicken meat a nd beans, these were not 
utilized by the Dominican Republic.  According to  the authorities, there are no export tariff quotas 
with any other WTO country. 
                                                      
77 Decree No. 30, Creation of the Single Window for Exports, of 28 June 1994. 
78 Central office in Managua, offices at the major customs posts at the border and in ports in Nicaragua 
or in nearby towns. 
79 The CAFTA method for allocating export quotas in Nicaragua's case is "first come, first served". WT/TPR/S/167 Trade Policy Review 
Page 48 
 
 
(iv) Export subsidies, financing, support and promotion 
82. According to the authorities, Nicaragua has not granted any export subsidies since 1999.80  
Nicaragua notified the WTO Committee on Agriculture  that, in 2003 and 2004, it did not grant any 
export subsidies.81 
83. Under the Fiscal Equity Law, since 2003 for a period of seven years producers receive a tax 
credit amounting to 1.5 per cent of the f.o.b. value of their exports, which must be offset against the exporter's annual income tax (IR) subject to proof that the benefit has been transferred to the 
producers.
82  For a limited period, Nicaragua granted tax benefit certificates (corresponding to 1.5 per 
cent of the f.o.b. port-of-exit value) in order to  offset the many anti-export biases that prevented 
domestic producers from competing.  This progra mme was, however, abolished by the Law on Tax 
and Business Equity. 
84. The temporary admission regime allows suspension of tariffs on products processed for 
export, pursuant to Law No. 382 and its regulations.83  Under Article 4 of this Law, the regime on 
temporary admission for inward processing is the tax scheme that allows both the entry of goods into 
Nicaraguan customs territory and the local purchase  of these goods without payment of any type of 
duty or tax.  The regime is intended to offset the anti-export bias affecting the national economy (for 
example, the high cost of energy and high taxes). 
85. Since 1991, Nicaragua's exports have mainly b een financed through the existing resources of 
the banking system.  Export financing is short-term at commercial interest rates, which are high in 
comparison with other countries in Ce ntral America;  different methods  of payment are used, the most 
common being on-sight and on-delivery payment. 
86. In April 1999, an additional drawback of US$0.37 per box was introduced for fisheries 
exports.84 
(v) Free zones 
87. As a result of the recent reforms to the free zone regime (mainly in 2003 and 2005), 
enterprises operating under this regime in Nicaragua are exempt from the following taxes:85 
VAT;  100 per cent of the IR for the first ten years and 60 per cent thereafter86;  capital gains tax on 
                                                      
80 Nicaragua, as a developing country with per capita GDP below US$1,000, is exempt from the 
WTO provisions requiring elimination of prohibited export  subsidies (where these exist).  According to the 
authorities, Nicaragua has in fact face d certain situations where there is an anti-export bias coming from various 
sources;  this is related, inter alia , to the fiscal deficit and commitments with international financing 
organizations. 
81 WTO document G/AG/N/NIC/7 of 26 August 2005.  In Nicaragua's schedule of commitments under 
the Agreement on Agriculture, there is no specific commitment on export subsidies for agricultural products. 
82 There have been problems in implementing this  measure, therefore, the tax revenue foregone has 
been minimal;  in 2004 it amounted to barely C$45 million. 
83 La Gaceta  No. 70 of 16 April 2001. 
84 Law No. 303 of 24 March 1999. 
85 Law No. 46 of 13 November 1991 and its regulations, together with the corresponding amendments, 
including those in 2005. 
86 This exemption does not include tax on personal earn ings, salaries, wages or fees paid to Nicaraguan 
or foreign personnel working in an enterprise established in the zone, but does include payment to non-resident 
foreigners in the form of interest on loans, commission,  fees and remittances for legal services abroad or in 
Nicaragua and for promotion, marketing, consultancy a nd similar services, from which the enterprises do not 
have to make any deductions. Nicaragua WT/TPR/S/167 
 Page 49 
 
 
real estate in free zones87;  taxes on the establishment, transfor mation, merger or reorganization of a 
company, as well as stamp duty88;  municipal taxes, indirect, sales or selective consumption taxes;  
export taxes on products made in the zone89;  and tariffs, levies and sales tax on imports of machinery, 
equipment (including transport equipment for use in the free zones90) and inputs. 
88. In 2003, user enterprises were redefined and a further category was added to allow enterprises 
which created more than ten jobs to be included in  the free zone regime, with the proviso that they 
would not be given the fiscal exemption for motor vehicles indicated in the Law.91  Furthermore, user 
enterprises were given the possibility of introducing part of their production into Nicaraguan customs 
territory according to the following percentages:  first category, 40 per cent;  second category, 30 per 
cent;  third category, 20 per cent;  and fourth category, 0 per cent. 
89. In 2005, there were 25 industrial parks operati ng under the free zones regime, with 91 user 
enterprises occupying 750,000 m2 of industrial premises and provid ing some 75,000 direct jobs, as 
well as 175,000 indirect jobs.  The populati on concerned was approximately 2 million. 
90. The National Free Zones Commission (CNZF) is responsible for Nicaragua's free zones and 
has set the following objectives for 2006, inter alia  (in comparison with 2005):  to create 10,000 new 
jobs so as to reach a total of 85,000 direct jobs by the end of 2006;  to increase exports from free 
zones to US$850 million (as against US$682 million in 2005) (Chapter I(3)(i));   to raise national 
value added by 19 per cent (from US$210 million to US$250 million);  and to increase total 
investment by at least 5 per cent, in other words, to attract US$100 million.92 
(4) MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Incentives 
(a) Direct taxation 
91. The maximum rate of income tax in Nicaragua is 30 per cent;  it is either progressive (for 
natural persons) or a flat rate (for companies and ass ociations).  At present, 1 per cent of the value of 
total assets for the corresponding fiscal period is levied as a minimum contribution to the IR.  This rule applies to all legal persons  in general and to natural pers ons engaged in business activities in 
                                                     
 
87 Includes capital gains tax, where applicable, provided that the enterprise is terminating operations in 
the zone and that the property is still covered by the free zone regime. 
88 All enterprises covered by the free zone regime mu st be businesses (public limited companies) with a 
single corporate purpose. 
89 Decree No. 46, Law on Export Processing Zones of 30 November 1991 and its regulations, together 
with the corresponding amendments. 
90 If these vehicles are sold to buyers outside the zo ne, the customs tariff must be paid, with the rebates 
applicable according to their length of use, and the same applies to sales by diplomatic missions and 
international organizations. 
91 Decree No. 31-92, Regulations of the Law on Export Processing Zones, amended by 
Decree No. 21-03.  Decree No. 50 -2005 fully repealed Decree No. 18 -98 and partly repealed Decrees 
Nos. 31-92 and 21-03. 
92 The CNZF is one of the largest investors an d is carrying out three major projects:  (i) Parque 
5 Estrellas , which will increase the area for industrial sites with a model park in which US$18 million will be 
invested in 2006 with resources from own funds and financing from the Central American Bank for Economic Integration (CABEI);  (ii) Parque Tecnológico , whose purpose is to enable the development of projects such as 
call centres, "back office", "outsourcing", inter alia , with an investment of US$4.5 million;  and (iii) an 
electricity substation, which will make the CNZF a larg e consumer of electricity and will support the user 
enterprises already present in th e Parque Industrial Las Mercedes. WT/TPR/S/167 Trade Policy Review 
Page 50 
 
 
existence for over three years and with assets exc eeding US$150,000 annually.  In the financial 
sector, the minimum payment corresponds to 0.6 per cent of the monthly average value of the total 
deposits during the preceding fiscal year. 
(b) Foreign aid and adjustment assistance programmes 
92. Since 1991, financing has been available th rough the Nicaraguan Investment Finance 
Company (FNI), which manages a series of funds fr om international donors.  The Central American 
Bank for Economic Integration (CABEI) manages funds  intended for projects with various goals.  
Private sector financing is available from th e Inter-American Development Bank (through its 
multilateral investment fund and the Inter-American Investment Corporation (IIC)) and the World 
Bank (through its International Finance Corporation (IFC)). 
93. Nicaragua has been a major recipient of foreign aid since the early 1990s.  In the fiscal years 
2003 and 2004, the United States Agency for Inte rnational Development (USAID) provided US$49.5 
and US$41.7 million respectively in assistance to Nicaragua.  The expected level of 
USAID assistance in the 2005 fiscal year is US$47. 1 million, while for the fiscal year 2006 it is 
US$41.4 million.93  Other major foreign aid donors to Nicar agua include Denmark, Germany, Japan, 
the Netherlands, Spain, Sweden and Switzerland. 
94. In 2003, USAID drew up a plan for Nicaragua for the fiscal years 2003-2008.  Part of the 
strategy is predicated upon the fact that, while participation in CAFTA is expected to boost the 
sagging economy, it requires Nicaragua to make inv estments in worker productivity and infrastructure 
and demands a secure legal and re gulatory framework for business investment and trade to thrive.94 
95. Together with 15 other developing countries, Ni caragua was chosen to put forward a proposal 
for assistance in the context of the Millennium Challenge Account (MCA).  This United States 
initiative links more aid to political, legal and eco nomic reform by increasing the disbursements 
planned for the period 2004-2006.  The resulti ng "Millennium Challenge Compact" between the 
United States and Nicaragua aims to deal with  the problems of insecure property rights, under-
developed infrastructure and low-value rural busin ess activity, which are the greatest barriers to 
growth.  One of the objectives of this five-y ear Compact, worth US$175 million, is to reduce 
transportation costs to domestic, regional and global markets.95 
96. During the Uruguay Round, Nicaragua did not make specific commitments to phase out 
financial support to agricultural producers (Chapter IV(2)(ii)). 
97. Since 1991, Nicaragua has levied a compulsory c ontribution of 2 per cent of the wage bill on 
all enterprises to finance the training activiti es of the National Technology Institute (INATEC).96 
(ii) State-owned enterprises and privatization 
98. Nicaragua has a long tradition of intrusive government, present in all sectors of society.  Since 
1990, reforms have been aimed at reducing the size of  the public sector, increasing its efficiency and 
shifting its role from that of provider of goods and services to one of a facilitator and regulator of 
mainly private activities.  During the period 1990-19 95, most State-run firms were privatized, leased, 
                                                      
93 Information available at:  http://www.usaid.gov/p olicy/budget/cbj2006/ lac/pdf/ni_complete05.pdf. 
94 USAID (2003), page 3. 
95 It will improve the Pacific Corridor, which links  producers and consumers in León Chinandega to 
markets in Honduras and El Salvador and in the south of Nicaragua. 
96 Decree Law No. 3 of 10 January 1991 and Law No. 4 of 8 January 1998. Nicaragua WT/TPR/S/167 
 Page 51 
 
 
returned to former owners, or liquidated;  neve rtheless, the cash proceeds from these operations were 
low because many companies were re turned to former owners or ex changed for government bonds.  
On the other hand, over the same period, the div estment process has been slow as far as banking, 
petroleum and public services are concerned.97 
99. The General National Public Sector Corporations Board (CORNAP) was the principal 
government body responsible for Nica ragua's privatization programme.98  Its major task was to 
privatize and/or return the property it manage d to its rightful owners.  At present only Implementos 
Agrícolas S.A.  (IMPLAGSA) is still managed by the CORNAP, but its privatization is the subject of a 
proposal before the National Assembly. 
100. In 1998, Nicaragua began to privatize some traditionally State-run sectors, for example, 
telecommunications and electricity.  The Nicaraguan Telecommunications Company (ENITEL) was privatized during the period 1998-2005 by Law No. 293 (Law on Incorporating Private Parties in the 
Operation and Expansion of Pub lic Telecommunications Services).
99 
101. The major assets of Nicaragua's electricity distribution system, owned by the Nicaraguan 
Electricity Company (ENEL), were privatized in Oct ober 2000 with their sale to two distributors (the 
Northern Electricity Distribution Company (DISNO RTE)) and the Southern Electricity Distribution 
Company (DISSUR)).100  ENEL was split into seven companies:101  the National Electricity 
Transmission Company S.A. (ENTRESA), State-owned102;  DISNORTE and DISSUR;  and four 
generating companies (two thermal, one hydroel ectric and one geothermal), Central Electricity 
Generating Company S.A. (GECSA), Western El ectricity Generating Company S.A. (GEOSA), 
Hydroelectricity Generating Company S.A. (H IDROGESA) and Momotombo Generating Company 
S.A. (GEMOSA).  The Nicaraguan State still has a monopoly of electricity transmission (Chapter II(5)). 
102. Nicaragua has not notified the WTO of activities of State-trading enterprises in Nicaragua.  
According to the authorities, these notif ications will shortly be submitted. 
(iii) Competition policy and price controls 
103. Since 1999, Nicaragua has implemented a se ries of initiatives to boost competition in 
domestic markets.  The most significant achievement s have been the following:  in 2003, the question 
of competition policy was included in the Nationa l Development Plan (PND) as one of the most 
important public policies;  in 2004, the Executive sent  to the National Assembly a preliminary draft of 
the Law reforming the Consumer Law, which is in tended to make good the lacunae in the current 
Law
103;  in 2005, the President of the Republic sen t to the National Assembly the draft Law on 
Promotion of Competition;  in 2005, the Nicaragua n Institute of Telecommunications and Postal 
Services (TELCOR) approved the Agreement on the Promotion and Protection of Competition in the 
                                                      
97 One exception was the privatization of the Stat e bus company (ENABUS) in 1992 (WTO, 1999). 
98 The CORNAP was created by Decree No. 7 of 17 May 1990.  All State-owned corporations and 
enterprises are grouped together in the CORNAP , to which they are ad ministratively attached. 
99 La Gaceta  No. 123 of 2 July 1998.  ENITEL's privatiza tion was completed in 2005 with the sale of 
49 per cent of its shares. 
100 DISNORTE and DISSUR were bought by the Spanish company Unión Fenosa . 
101 Law No. 272 (Law on the Electricity Industry), published in La Gaceta  No. 74 of 23 April 1998, 
and Presidential Agreement No. 116, published in La Gaceta  No. 67 of 13 April 1999. 
102 Article 27 of Law No. 272. 
103 This draft has not yet been approved by the National Assembly. WT/TPR/S/167 Trade Policy Review 
Page 52 
 
 
Telecommunications Market;  and during the period under review a wide-ranging plan for 
competition-policy-related training and dissemination was implemented. 
104. The draft Law on Promotion of Competition follo ws international standards for controlling 
anti-competitive practices, including the application of competition law to action by the State, and 
establishes controls over economic mergers and am algamations affecting operations in Nicaragua.  
According to the authorities, it is highly likely that this Law will be approved by the National 
Assembly during the coming months as this is one of the conditions for the World Bank's Poverty Reduction Support Credit, also forms part of the CA FTA's supplementary agenda and is supported by 
the business sector. 
105. In line with its aim of transition to a market economy, Nicaragua has pursued its price 
liberalization policy.  The exceptions to this include the following:  electricity rates, profit margins on 
pharmaceuticals for human consumption
104, and the retail selling price of butane gas.105  T h e  
Nicaraguan Energy Institute (INE), as the regulator y body, publishes adjustments to the price of 
butane gas monthly depending on fluctuations in its price on the international market.  For medicines, 
the price is adjusted yearly acco rding to the annual decline in the córdoba in comparison with the 
United States dollar. 
(iv) Intellectual property rights 
(a) Overview 
106. Intellectual property rights (IPR) is probably th e sphere in which Nicaraguan legislation has 
made the most progress in recent years.  This can be  seen both in the enactment of national legislation 
since the previous review (Table III.8) and in the approval of international agreements. 
Table III.8 
Main intellectual property legislation 
 Content Publication Implementing regulations 
Law No. 312, Copyright and 
Related Rights La Gaceta , D.O., No. 166 
and No. 167, 31 August and 1 September 1999 Decree No. 22-2000 ( La Gaceta , D.O., 
No. 84), 5 May 2000 Copyright  
Law No. 322, Protection of 
Programme-Carrying Satellite 
Signals  La Gaceta , D.O., No. 240, 
16 December 1999 Decree No. 44-2000 ( La Gaceta , D.O., 
No. 189), 6 October 2000 
Law No. 354, Patents, Utility Models and Industrial Designs La Gaceta , D.O., No. 179 
and No. 180, 22 and 
25 September 2000 Decree No. 88-2001 ( La Gaceta  No. 184), 
28 September 2001 
Strasbourg and Locarno Classifications 
(La Gaceta  No. 12), 17 January 2003 Patents  
Law No. 324, Protection of 
Layout-Designs of Integrated 
Circuits La Gaceta , D.O., No. 22, 
1 February 2000 Decree No. 38-2001, 4 April 2001 
(La Gaceta , D.O., No. 72), 18 April 2001 
Table III.8 (cont'd)
                                                      
104 The Government is empowered to control the price of medicines by Law No. 182, Consumer 
Protection Law and its regulations, published in La Gaceta  No. 213 of 14 November 1994.  The regulations 
were published in Decree No. 2187 ( La Gaceta  No. 169 of 3 September 1999). 
105 Price controls on butane gas are based on Law No. 277, Law on Hydrocarbons Supplies, published 
in La Gaceta  No. 25 of 6 February 1998 and its regulations, Decree No. 38, published in La Gaceta  No. 97 of 
27 May 1998. Nicaragua WT/TPR/S/167 
 Page 53 
 
 
 Content Publication Implementing regulations 
Trademarks and 
other distinctive 
signs  Law No. 380, Trademarks and 
Other Distinctive Signs La Gaceta , D.O., No. 70, 
16 April 2001 Decree No. 83-2001 ( La Gaceta  No. 183), 
27 September 2001 
Vienna and Nice Classifications ( La Gaceta  
No. 12), 17 January 2003 
New plant varieties  Law No. 318, Protection of New 
Plant Varieties La Gaceta , D.O., No. 228, 
29 November 1999 Decree No. 37-2000 ( La Gaceta , D.O., 
No. 102), 31 May 2000 
Source : Information provided by the Nicaraguan authorities. 
107. Furthermore, as a requirement for the entry into force of the CAFTA, in March 2006 
Nicaragua approved the following laws:  Law No. 577,  Reform of the Law on Copyright and Related 
Rights;  Law No. 578, Reform of the Law on Prot ection of Programme-Carrying Satellite Signals;  
Law No. 579, Reform of the Law on Patents, Utility Models and Industr ial Designs;  and Law 
No. 580, Reform of the Law on Trademarks and Other Distinctive Signs. 
108. In recent years, Nicaragua has become much more active in the area of IPR and has signed 
many international agreements.  It has now acc eded to the following organizations and treaties:106  the 
Berne Convention for the Protection of Literary and Artistic Works (since August 2000);  the Geneva 
Convention for the Protection of Producers of Phono grams against Unauthorized Duplication of their 
Phonograms (since August 2000);  the Patent C ooperation Treaty (since March 2003);  the Rome 
Convention for the Protection of Performers,  Producers of Phonograms and Broadcasting 
Organizations (since August 2000);  member of th e International Union for the Protection of New 
Varieties of Plants (UPOV) (since September 200 1);  WIPO Copyright Treaty (since March 2003);  
and the WIPO Performances and Phonograms Treaty (since March 2003). 
109. On 24 March 2006, Nicaragua approved accession to  the Budapest Treaty on the International 
Recognition of the Deposit of Microorganisms fo r the Purposes of Patent Procedure and its 
regulations.107  Nicaragua is also considering the possibility of acceding to the Lisbon Agreement for 
the Protection of Appellations of Origin  and their International Registration. 
110. Within the CACM framework, IPR are based on the provisions of Article 30 of the Protocol 
to the General Treaty on Central American Econom ic Integration (Guatemala Protocol), whose 
substantive provisions call for the harmonization of intellectual and industrial property legislation, 
inter alia . 
111. Nicaragua's intellectual property legislation was examined by the WTO's TRIPS Council 
from 18 to 22 June 2001.108 
(b) Patents 
112. Law No. 354 contains transitional provisions to protect patents.  Where a patent was granted 
under the previous Law (of 1899) and the person con cerned wishes to benefit from the 20-year term 
                                                      
106 At the time of the previous review, Nicaragua was already a member/signatory of the Universal 
Copyright Convention (1961);  the WIPO (1985);  the Paris Convention for the Protection of Industrial 
Property (1996);  the Brussels Convention relating to the Distribution of Programme-Carrying Signals Transmitted by Satellite (1979);  the Mexico Convention on Literary and Artistic Property (1902);  the Buenos 
Aires Convention on Literary and Artistic Property ( 1910);  the General Inter-American Convention for 
Trademark and Commercial Protec tion (1934);  and the Inter-American Copyright Convention (1946) 
(WTO, 1999). 
107 Decree No. 4539, published in La Gaceta  No. 60 of 24 March 2006. 
108 WTO document IP/Q-Q4/NIC/1 of 13 February 2002 contains the introductory statement by the 
delegation of Nicaragua, as well as the questions raised and the replies given during the review. WT/TPR/S/167 Trade Policy Review 
Page 54 
 
 
of protection, he may request this from the MI FIC's Intellectual Property Register, pursuant to 
Article 135109, subject to payment of the annual fees (the firs t of which is due in the third year of the 
patent's term, in other words, before the second anniversary of the filing date).110  Nicaragua's patent 
legislation requires an expert opinion before a patent can be granted.  Law No. 354, however, 
provides that the fees for this opinion shall be de termined on a case-by-case basis and the opinion of 
another patent office may be used (provided that it is translated into Spanish).111 
113. Law No. 354 also provides that utility models  have a maximum term of protection of ten 
years from the date of filing, subject to payment of  the annual fees.  Registration of industrial designs 
is valid for five years with the possibility of re newing it for two further five-year periods (i.e., the 
maximum possible period is 15 years from the date of filing). 
114. Law No. 354 on patents, utility models a nd industrial designs was amended by Law 
No. 579112 to clarify its definitions and reinforce the pr ocess of examining and granting patents;  make 
better use of the technological information contained in patent documents;  and ensure that civil and 
criminal proceedings are properly adapted to  the due enforcement of patent rights. 
(c) Trademarks 
115. Article 3 of Law No. 380 recognizes as a trademark, inter alia  "a Nicaraguan or foreign 
geographical name provided that it is sufficiently ar bitrary and distinctive with respect to the products 
and services to which it is applied and that its use is not likely to create any risk or confusion as 
regards the origin, source, qualities or characteris tics of the products or services to which the 
trademark is to be applied, nor any risk of asso ciation with a well-known geographical name for the 
same products or services or unfair appropriation of the reputation of such a geographical indication". 
116. With regard to registration procedures, th e Law provides for absolute prohibitions (for 
example, generic or descriptive terms) and rela tive prohibitions (for example, prior conflicting 
applications or registration).  Registration is for a term of ten years and ma y be renewed for further 
ten-year periods.  The Law contains a user requi rement, providing that a trademark must be used 
within three years of the date of registration.  Fa ilure to use the trademark means that the registration 
can be challenged.  The Law also contains provisions on infringement and unfair competition 
proceedings.  Such actions are brought before the courts, which may issue a court order for payment 
of compensation, award damages and order measures to prevent continuation of the unlawful acts (for 
example, withdrawal of the goods from the market  and of advertising and a ban on importing or 
exporting the goods).  The Law allows holding companies to register trademarks. 
                                                      
109 In the case of patents already granted under the previous Law, the usual term continues to be 
ten years from the date they were granted. Protection al so requires that the patent be worked in Nicaragua.  
Nevertheless, it is possible to request an extension of the patent's term of protection to up to 20 years as of the 
date of filing of the original application.  Annual f ees are payable during the period of the extension. 
110 Extension of the term of protection also applies to chemicals and pharmaceuticals. 
111 Nicaragua became the 118th contracting party to the Patent Cooperation Treaty (PCT) when it 
deposited its instrument of accession in 2002.  The Treaty entered into force for Nicaragua on 6 March 2003.  The PCT gives interested parties seeking patent protection in several countries the possibility of filing a single 
"international" patent application with one patent office and in one language.  An applicant can thus seek patent 
protection for an invention simultaneously in a large number of countries. 
112 La Gaceta  No. 60 of 24 March 2006. Nicaragua WT/TPR/S/167 
 Page 55 
 
 
(d) Copyright 
117. Article 127 of the Constitution provides that "artistic and cultural creation is free and 
unrestricted" and that as one of the measures to sup port "cultural workers" th e State "protects their 
copyright".  Law No. 312 is consistent with the provisions of the Berne Convention and the 
TRIPS Agreement.  The Law states that copyright is acquired by creation of a work.  It covers 
literary, artistic and scientific works, computer pr ograms (which were not explicitly protected under 
the earlier Law) and the rights of performers and producers of phonograms and broadcasting organizations.  Copyright protection is granted for th e author's lifetime plus 70 years.  Applications 
must be filed with the Registry of Literary, Scientif ic and Artistic Works of the Ministry of Education. 
(e) New plant varieties and other rights 
118. Law No. 318 on the Protection of New Plant Varieties
113 is the only such statute in 
Central America.  It provides sui generis  protection for all genera and species for a term of 20 years.  
In order to be given protection, the plant variety mu st be novel, distinct, uniform and stable and have 
its own denomination.  Nicaragua is also the only country in the region that has acceded to the International Convention for the Protection of Ne w Varieties of Plants (since 6 September 2001).
114 
119. Nicaragua has signed the majority of interna tional environmental agreements, including the 
following:  Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and 
their Disposal;  Convention on International Trade in Endangered Species of Wild Fauna and Flora;  
Convention on Wetlands of Internat ional Importance especially as Waterfowl Habitat (Ramsar);  
Kyoto Protocol to the United Nations Framework Convention on Climate Change ;  Montreal Protocol 
on Substances that Deplete the Ozone Layer;  1978 Protocol to the International Convention for the 
Prevention of Pollution from Ships;  Rotterdam C onvention on the Prior Informed Consent Procedure 
for Certain Hazardous Chemicals and Pesticides in International Trade;  United Nations Convention 
on Biological Diversity;  United Nations Framework Convention on Climate Change;  and the United 
Nations Convention on the Law of the Sea. 
120. Nicaragua participates widely in such agreem ents but its participa tion is not universal.  
Among the international environmental agreements to which Nicaragua is not a signatory are the 
Convention on Fishing and Conservation of the Living Resources of the High Seas, the Convention 
on Long-Range Transboundary Air Pollution and th e Convention on the Prevention of Marine 
Pollution by Dumping of Wastes and Other Matter (London Convention).  Although in 1983 Nicaragua signed the Convention for the Protection and Development of the Marine Environment of 
the Wider Caribbean Region and its Protocol on O il Spills, it has not yet ratified either of these 
instruments. 
121. Nicaragua and the other five members of CAFTA  have signed two envir onmental agreements.  
The Agreement on Environmental Cooperation outli nes a framework for environmental cooperation 
among member countries to improve environmental protection in the region.  The Understanding 
Regarding the Establishment of a Secretariat for Environmental Affairs establishes a secretariat 
responsible for administering a procedure to allo w the public to submit complaints regarding the 
enforcement of national environmental legislation. 
                                                     
 
113 La Gaceta  No. 228 of 29 November 1999. 
114 See http://www.sieca.org. gt/op5-1-MLegalA.htm, which has ta bles showing the status of each 
Central American country with regard to the various intellectual property treaties. WT/TPR/S/167 Trade Policy Review 
Page 56 
 
 
(f) Enforcement 
122. Although Nicaragua has strengthened its lega l framework for protection of intellectual 
property rights in recent years, some concerns have  been expressed regarding enforcement of these 
rights.  The most specific complaints refer to  alleged shortcomings in respect of well-known 
trademarks;  since 2001, there have been no significan t police raids or arrests for piracy of music and 
videos;  there is anecdotal evidence of an increase in the reproduction of pira ted music and videos and 
a lack of protection against unfair commercial use of pharmaceutical and agricultural product test 
data.115  The private sector has expressed similar concerns.  For example, according to one 
organization, in 2004 80 per cent of the business app lications used in Nicaragua were unauthorized 
copies, causing a loss of US$1 million for suppliers of computer programs.116 
                                                      
115 USTR (2005), page 438. 
116 International Intellectual Property Alliance (2005), page 6.