IIB 

115TH CONGRESS 

1ST SESSION H. R. 1918 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 4, 2017 

Received; read twice and referred to the Committee on Foreign Relations 

AN ACT 

To oppose loans at international financial institutions for 

the Government of Nicaragua unless the Government 

of Nicaragua is taking effective steps to hold free, fair, 

and transparent elections, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Nicaraguan Invest3 ment Conditionality Act (NICA) of 2017’’. 

4 SEC. 2. FINDINGS. 

5 Congress makes the following findings: 

6 (1) The House Committee on Foreign Affairs 

7 convened a congressional hearing on December 1, 

8 2011, entitled ‘‘Democracy Held Hostage in Nica9 ragua: Part 1’’ where former United States Ambas10 sador to Nicaragua Robert Callahan testified, 

11 ‘‘First, that Daniel Ortega’s candidacy was illegal, 

12 illegitimate, and unconstitutional; second, that the 

13 period leading to the elections and the elections 

14 themselves were marred by serious fraud; third, that 

15 Daniel Ortega and his Sandinista party have system16 atically undermined the country’s fragile govern17 mental institutions.’’. 

18 (2) According to the Organization of American 

19 States (OAS) report on the Nicaraguan 2011 Presi20 dential elections, the OAS recommended that the 

21 Government of Nicaragua take a number of steps to 

22 improve its electoral systems, including accrediting 

23 poll watchers to ensure political parties and civil so24 ciety are represented to observe elections, and rede25 signing the structure of the Nicaraguan electoral 

26 council to allow proper registration of the electorate. 


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1 (3) On January 25, 2012, a press statement 

2 from Secretary of State Hillary Clinton said: ‘‘As 

3 noted by international observers and Nicaraguan 

4 civil society groups, Nicaragua’s recent elections 

5 were not conducted in a transparent and impartial 

6 manner, and the entire electoral process was marred 

7 by significant irregularities. The elections marked a 

8 setback to democracy in Nicaragua and undermined 

9 the ability of Nicaraguans to hold their government 

10 accountable.’’. 

11 (4) According to the Department of State’s 

12 2015 Fiscal Transparency Report: ‘‘Nicaragua’s fis13 cal transparency would be improved by including all 

14 off-budget revenue and expenditure in the budget, 

15 auditing state-owned enterprises, and conducting a 

16 full audit of the government’s annual financial state17 ments and making audit reports publicly available 

18 within a reasonable period of time.’’. 

19 (5) According to the Department of State’s 

20 Country Reports on Human Rights Practices for 

21 2015: ‘‘In 2011 the Supreme Electoral Council 

22 (CSE) announced the re-election of President Daniel 

23 Ortega Saavedra of the Sandinista National Libera24 tion Front (FSLN) in elections that international 

25 and domestic observers characterized as seriously 


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1 flawed. International and domestic organizations 

2 raised concerns regarding the constitutional legit3 imacy of Ortega’s re-election. The 2011 elections 

4 also provided the ruling party with a supermajority 

5 in the National Assembly, allowing for changes in 

6 the constitution, including extending the reach of ex7 ecutive branch power and the elimination of restric8 tions on re-election for executive branch officials and 

9 mayors. Observers noted serious flaws during the 

10 2012 municipal elections and March 2014 regional 

11 elections.’’. 

12 (6) According to the Department of State’s 

13 Country Reports on Human Rights Practices for 

14 2015 in Nicaragua: ‘‘The principal human rights 

15 abuses were restrictions on citizens’ right to vote; 

16 obstacles to freedom of speech and press, including 

17 government intimidation and harassment of journal18 ists and independent media, as well as increased re19 striction of access to public information, including 

20 national statistics from public offices; and increased 

21 government harassment and intimidation of non22 governmental organizations (NGOs) and civil society 

23 organizations.’’. 

24 (7) The same 2015 report stated: ‘‘Additional 

25 significant human rights abuses included considerVerDate Sep 11 2014 23:44 Oct 04, 2017 Jkt 079200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1918.RFS H1918

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1 ably biased policies to promote single-party domi2 nance; arbitrary police arrest and detention of sus3 pects, including abuse during detention; harsh and 

4 life-threatening prison conditions with arbitrary and 

5 lengthy pretrial detention; discrimination against 

6 ethnic minorities and indigenous persons and com7 munities.’’. 

8 (8) On June 7, 2016, the Department of 

9 State’s Bureau of Democracy, Human Rights and 

10 Labor posted on social media: ‘‘Disappointed govern11 ment of Nicaragua said it will deny electoral observ12 ers requested by Nicaraguan citizens, church, and 

13 private sector * * * We continue to encourage the 

14 government of Nicaragua to allow electoral observers 

15 as requested by Nicaraguans.’’. 

16 (9) On June 14, 2016, President Ortega ex17 pelled three United States Government officials (two 

18 officials from U.S. Customs and Border Protection 

19 and one professor from the National Defense Uni20 versity) from Nicaragua. 

21 (10) On August 1, 2016, the Department of 

22 State issued a press release to express grave concern 

23 over the Nicaraguan government limiting democratic 

24 space leading up to the elections in November and 

25 stated that ‘‘[o]n June 8, the Nicaraguan Supreme 


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1 Court stripped the opposition Independent Liberal 

2 Party (PLI) from its long recognized leader. The 

3 Supreme Court took similar action on June 17 when 

4 it invalidated the leadership of the Citizen Action 

5 Party, the only remaining opposition party with the 

6 legal standing to present a presidential candidate. 

7 Most recently, on July 29, the Supreme Electoral 

8 Council removed 28 PLI national assembly members 

9 (16 seated and 12 alternates) from their popularly10 elected positions.’’. 

11 (11) On November 7, 2016, the Department of 

12 State issued a press release stating: ‘‘The United 

13 States is deeply concerned by the flawed presidential 

14 and legislative electoral process in Nicaragua, which 

15 precluded the possibility of a free and fair election 

16 on November 6. In advance of the elections, the Nic17 araguan government sidelined opposition candidates 

18 for president, limited domestic observation at the 

19 polls and access to voting credentials, and took other 

20 actions to deny democratic space in the process. The 

21 decision by the Nicaraguan government not to invite 

22 independent international electoral observers further 

23 degraded the legitimacy of the election.’’. 

24 (12) In November and December of 2016, the 

25 Board of Executive Directors of the Inter-American 


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1 Development Bank postponed consideration of a pol2 icy based loan of $65 million to the Government of 

3 Nicaragua due to the efforts of the United States 

4 mission that expressed serious concerns of the ab5 sence of transparency, systemic corruption, and the 

6 lack of free and fair elections in Nicaragua. 

7 (13) According to the Department of State’s 

8 Country Reports on Human Rights Practices for 

9 2016: ‘‘[A]ctions by the ruling Sandinista National 

10 Liberation Front (FSLN) party resulted in de facto 

11 concentration of power in a single party, with an au12 thoritarian executive branch exercising significant 

13 control over the legislative, judicial, and electoral 

14 functions.’’. 

15 (14) According to the Department of State’s 

16 Country Reports on Human Rights Practices for 

17 2016 in Nicaragua, ‘‘The November 6 elections for 

18 president, vice president, national assembly mem19 bers, and representatives for the Central American 

20 parliament did not meet the conditions of being free 

21 and fair * * * The November 6 presidential and leg22 islative elections were marred by allegations of insti23 tutional fraud and the absence of independent oppo24 sition political parties. National observers and oppoVerDate Sep 11 2014 23:44 Oct 04, 2017 Jkt 079200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1918.RFS H1918

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1 sition leaders claimed rates of abstention from 60 to 

2 70 percent.’’. 

3 (15) According to the Department of State’s 

4 Country Reports on Human Rights Practices for 

5 2016: ‘‘Companies reported that bribery of public of6 ficials, unlawful seizures, and arbitrary assessments 

7 by customs and tax authorities were common * * * 

8 The courts remained particularly susceptible to 

9 bribes, manipulation, and other forms of corruption, 

10 especially by the FSLN, giving the sense that the 

11 FSLN heavily influenced CSJ and lower-level court 

12 actions.’’. 

13 SEC. 3. STATEMENT OF POLICY. 

14 It is the policy of the United States to support— 

15 (1) the rule of law and an independent judiciary 

16 and electoral council in Nicaragua; 

17 (2) independent pro-democracy organizations in 

18 Nicaragua; 

19 (3) free, fair, and transparent elections under 

20 international and domestic observers in Nicaragua; 

21 and 

22 (4) anti-corruption and transparency efforts in 

23 Nicaragua. 


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1 SEC. 4. INTERNATIONAL FINANCIAL INSTITUTIONS. 

2 (a) IN GENERAL.—The President shall instruct the 

3 United States Executive Director at each international fi4 nancial institution to use the voice, vote, and influence of 

5 the United States to oppose any loan for the benefit of 

6 the Government of Nicaragua, other than to address basic 

7 human needs or promote democracy, unless the Secretary 

8 of State certifies and reports to the appropriate congres9 sional committees that the Government of Nicaragua is 

10 taking effective steps to— 

11 (1) hold free, fair, and transparent elections 

12 overseen by credible domestic and international elec13 toral observers; 

14 (2) promote democracy, as well as an inde15 pendent judicial system and electoral council; 

16 (3) strengthen the rule of law; 

17 (4) respect the right to freedom of association 

18 and expression; 

19 (5) combat corruption, including investigating 

20 and prosecuting government officials that are 

21 credibly alleged to be corrupt; and 

22 (6) protect the right of political opposition par23 ties, journalists, trade unionists, human rights de24 fenders, and other civil society activists to operate 

25 without interference. 


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1 (b) REPORT.—Not later than 180 days after the date 

2 of the enactment of this Act, the Secretary of the Treasury 

3 shall submit to the appropriate congressional committees 

4 a written report assessing— 

5 (1) the effectiveness of the international finan6 cial institutions in enforcing applicable program 

7 safeguards in Nicaragua; and 

8 (2) the effects of the matters described in sec9 tion 2 on long-term prospects for positive develop10 ment outcomes in Nicaragua. 

11 (c) DEFINITIONS.—In this section: 

12 (1) APPROPRIATE CONGRESSIONAL COMMIT13 TEES.—The term ‘‘appropriate congressional com14 mittees’’ means— 

15 (A) the Committee on Foreign Affairs, the 

16 Committee on Appropriations, and the Com17 mittee on Financial Services of the House of 

18 Representatives; and 

19 (B) the Committee on Foreign Relations, 

20 the Committee on Appropriations, and the 

21 Committee on Banking, Housing, and Urban 

22 Affairs of the Senate. 

23 (2) INTERNATIONAL FINANCIAL INSTITU24 TION.—The term ‘‘international financial institu25 tion’’ means the International Monetary Fund, 


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1 International Bank for Reconstruction and Develop2 ment, European Bank for Reconstruction and Devel3 opment, International Development Association, 

4 International Finance Corporation, Multilateral In5 vestment Guarantee Agency, African Development 

6 Bank, African Development Fund, Asian Develop7 ment Bank, Inter-American Development Bank, 

8 Bank for Economic Cooperation and Development in 

9 the Middle East and North Africa, and Inter-Amer10 ican Investment Corporation. 

11 (d) TERMINATION.—This section shall terminate on 

12 the day after the earlier of— 

13 (1) the date on which the Secretary of State 

14 certifies and reports to the appropriate congressional 

15 committees that the requirements of subsection (a) 

16 are met; or 

17 (2) 5 years after the date of the enactment of 

18 this Act. 

19 (e) WAIVER.—The President may waive this section 

20 if the President determines that such a waiver is in the 

21 national interest of the United States. 

22 SEC. 5. ORGANIZATION OF AMERICAN STATES. 

23 The President shall direct the United States Perma24 nent Representative to the OAS to use the voice, vote, and 

25 influence of the United States at the OAS to strongly adVerDate Sep 11 2014 23:44 Oct 04, 2017 Jkt 079200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H1918.RFS H1918

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1 vocate for an Electoral Observation Mission to be sent to 

2 Nicaragua in 2017 to observe the possibility of credible 

3 elections. 

4 SEC. 6. SENSE OF CONGRESS. 

5 The Department of State and the United States 

6 Agency for International Development should prioritize 

7 foreign assistance to the people of Nicaragua to assist civil 

8 society in democracy and governance programs, including 

9 human rights documentation. 

10 SEC. 7. REPORT ON CORRUPTION IN NICARAGUA. 

11 (a) REPORT REQUIREMENT.—Not later than 90 days 

12 after the date of the enactment of this Act, the Secretary 

13 of State, in consultation with the intelligence community 

14 (as defined in section 3(4) of the National Security Act 

15 of 1947 (50 U.S.C. 3003(4)), shall submit to Congress 

16 a report on the involvement of senior Nicaraguan govern17 ment officials, including members of the Supreme Elec18 toral Council, the National Assembly, and the judicial sys19 tem, in acts of public corruption or human rights viola20 tions in Nicaragua. 

21 (b) FORM.—The report required in subsection (a) 

22 shall be submitted in unclassified form, but may contain 


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1 a classified annex. The unclassified portion of the report 

2 shall be made available to the public. 

Passed the House of Representatives October 3, 

2017. 

Attest: KAREN L. HAAS, 

Clerk. 


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