IIB 
114TH CONGRESS 
2D SESSION 
H. R. 5708 
IN THE SENATE OF THE UNITED STATES 
SEPTEMBER 22, 2016 
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, other than to address 
basic human needs or promote democracy, unless the 
Government of Nicaragua is taking effective steps to 
hold free, fair, and transparent elections, and for other 
purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Nicaraguan Invest-
ment Conditionality Act (NICA) of 2016’’. 
SEC. 2. FINDINGS. 
Congress makes the following findings: 
(1) In 2006, Nicaragua, under President 
Enrique Bolan˜os, entered into a $175,000,000, 5- 
year compact with the Millennium Challenge Cor-
poration (MCC). 
(2) After the 2008 municipal elections, the 
MCC stated that there was a pattern of decline in 
political rights and civil liberties in Nicaragua. 
(3) In 2009, the MCC terminated the compact 
and reduced the amount of MCC funds available to 
Nicaragua by $61,500,000, which led to the compact 
ending in 2011. 
(4) According to Nicaraguan law, the National 
Assembly is the only institution allowed to change 
the constitution but in 2009, Daniel Ortega cir-
cumvented the legislature and went to the Supreme 
Court, which he controls, to rule in his favor that 
Presidential term limits were inapplicable. 
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(5) The House Committee on Foreign Affairs 
convened a congressional hearing on December 1, 
2011, entitled ‘‘Democracy Held Hostage in Nica-
ragua: Part 1’’ where former United States Ambas-
sador to Nicaragua Robert Callahan testified, 
‘‘First, that Daniel Ortega’s candidacy was illegal, 
illegitimate, and unconstitutional; second, that the 
period leading to the elections and the elections 
themselves were marred by serious fraud; third, that 
Daniel Ortega and his Sandinista party have system-
atically undermined the country’s fragile govern-
mental institutions’’. 
(6) From fiscal year 2012 until present, the 
Department of State found that Nicaragua did not 
meet international standards of fiscal transparency. 
(7) On January 25, 2012, a press statement 
from Secretary of State Hillary Clinton said: ‘‘As 
noted by international observers and Nicaraguan 
civil society groups, Nicaragua’s recent elections 
were not conducted in a transparent and impartial 
manner, and the entire electoral process was marred 
by significant irregularities. The elections marked a 
setback to democracy in Nicaragua and undermined 
the ability of Nicaraguans to hold their government 
accountable.’’. 
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(8) According to the Department of State’s 
2015 Fiscal Transparency Report: ‘‘Nicaragua’s fis-
cal transparency would be improved by including all 
off-budget revenue and expenditure in the budget, 
auditing state-owned enterprises, and conducting a 
full audit of the government’s annual financial state-
ments and making audit reports publicly available 
within a reasonable period of time.’’. 
(9) According to the Department of State’s 
Country Reports on Human Rights Practices for 
2015: ‘‘In 2011 the Supreme Electoral Council 
(CSE) announced the re-election of President Daniel 
Ortega Saavedra of the Sandinista National Libera-
tion Front (FSLN) in elections that international 
and domestic observers characterized as seriously 
flawed. International and domestic organizations 
raised concerns regarding the constitutional legit-
imacy of Ortega’s re-election. The 2011 elections 
also provided the ruling party with a supermajority 
in the National Assembly, allowing for changes in 
the constitution, including extending the reach of ex-
ecutive branch power and the elimination of restric-
tions on re-election for executive branch officials and 
mayors. Observers noted serious flaws during the 
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2012 municipal elections and March 2014 regional 
elections.’’. 
(10) According to the Department of State’s 
Country Reports on Human Rights Practices for 
2015 in Nicaragua: ‘‘The principal human rights 
abuses were restrictions on citizens’’ right to vote; 
obstacles to freedom of speech and press, including 
government intimidation and harassment of journal-
ists and independent media, as well as increased re-
striction of access to public information, including 
national statistics from public offices; and increased 
government harassment and intimidation of non-
governmental organizations (NGOs) and civil society 
organizations. 
(11) The same 2015 report stated: ‘‘Additional 
significant human rights abuses included consider-
ably biased policies to promote single-party domi-
nance; arbitrary police arrest and detention of sus-
pects, including abuse during detention; harsh and 
life-threatening prison conditions with arbitrary and 
lengthy pretrial detention; discrimination against 
ethnic minorities and indigenous persons and com-
munities.’’. 
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(12) In February 2016, the Ortega regime de-
tained and expelled Freedom House’s Latin America 
Director, Dr. Carlos Ponce, from Nicaragua. 
(13) On May 10, 2016, the Supreme Electoral 
Council announced and published the electoral cal-
endar which aims to govern the electoral process. 
(14) After receiving the electoral calendar for 
the 2016 Presidential elections, the Nicaraguan po-
litical opposition raised concerns and pointed to a 
number of anomalies such as: the electoral calendar 
failed to contemplate national and international ob-
servations, failed to agree to publicly publish the 
precincts results of each Junta Receptora de Voto 
(JRV), and failed to purge the electoral registration 
rolls in a transparent and open manner. 
(15) Nicaragua’s constitution mandates terms 
of 5 years for municipal authorities, which would in-
dicate that the next municipal elections must occur 
in 2017. 
(16) On June 3, 2016, the Nicaraguan Su-
preme Court—which is controlled by Nicaragua’s 
leader, Daniel Ortega—instructed the Supreme Elec-
toral Council not to swear in Nicaraguan opposition 
members to the departmental and regional electoral 
councils. 
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(17) On June 5, 2016, regarding international 
observers for the 2016 Presidential elections, Presi-
dent Ortega stated: ‘‘Here, the observation ends. Go 
observe other countries . . . There will be no obser-
vation, neither from the European Union, nor the 
OAS . . .’’. 
(18) On June 7, 2016, the Department of 
State’s Bureau of Democracy, Human Rights and 
Labor posted on social media: ‘‘Disappointed govern-
ment of Nicaragua said it will deny electoral observ-
ers requested by Nicaraguan citizens, church, and 
private sector . . . We continue to encourage the gov-
ernment of Nicaragua to allow electoral observers as 
requested by Nicaraguans.’’. 
(19) On June 8, 2016, the Supreme Electoral 
Council—which is controlled by Nicaragua’s leader, 
Daniel Ortega—announced a ruling, which changed 
the leadership structure of the opposition party and 
in practice allegedly barred all existing opposition 
candidates from running for office. 
(20) On June 14, 2016, President Ortega ex-
pelled three United States Government officials (two 
officials from U.S. Customs and Border Protection 
and one professor from the National Defense Uni-
versity) from Nicaragua. 
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(21) On June 29, 2016, the Department of 
State issued a Nicaragua Travel Alert which stated: 
‘‘The Department of State alerts U.S. citizens about 
increased government scrutiny of foreigners’ activi-
ties, new requirements for volunteer groups, and the 
potential for demonstrations during the upcoming 
election season in Nicaragua . . . Nicaraguan au-
thorities have denied entry to, detained, questioned, 
or expelled foreigners, including United States Gov-
ernment officials, academics, NGO workers, and 
journalists, for discussions, written reports or arti-
cles, photographs, and/or videos related to these top-
ics. Authorities may monitor and question private 
United States citizens concerning their activities, in-
cluding contact with Nicaraguan citizens.’’. 
(22) On August 1, 2016, the Department of 
State issued a press release to express grave concern 
over the Nicaraguan government limiting democratic 
space leading up to the elections in November and 
stated that ‘‘[o]n June 8, the Nicaraguan Supreme 
Court stripped the opposition Independent Liberal 
Party (PLI) from its long recognized leader. The 
Supreme Court took similar action on June 17 when 
it invalidated the leadership of the Citizen Action 
Party, the only remaining opposition party with the 
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legal standing to present a presidential candidate. 
Most recently, on July 29, the Supreme Electoral 
Council removed 28 PLI national assembly members 
(16 seated and 12 alternates) from their popularly- 
elected positions.’’. 
SEC. 3. STATEMENT OF POLICY. 
It is the policy of the United States to support— 
(1) the rule of law and an independent judiciary 
and electoral council in Nicaragua; 
(2) independent pro-democracy organizations in 
Nicaragua; and 
(3) free, fair, and transparent elections under 
international and domestic observers in Nicaragua in 
2016 and 2017. 
SEC. 4. INTERNATIONAL FINANCIAL INSTITUTIONS. 
(a) IN GENERAL.—The President shall instruct the 
United States Executive Director at each international fi-
nancial institution to use the voice, vote, and influence of 
the United States to oppose any loan for the benefit of 
the Government of Nicaragua, other than to address basic 
human needs or promote democracy, unless the Secretary 
of State certifies and reports to the appropriate congres-
sional committees that the Government of Nicaragua is 
taking effective steps to— 
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(1) hold free, fair, and transparent elections 
overseen by credible domestic and international elec-
toral observers; 
(2) promote democracy, as well as an inde-
pendent judicial system and electoral council; 
(3) strengthen the rule of law; and 
(4) respect the right to freedom of association 
and expression. 
(b) REPORT.—The Secretary of the Treasury shall 
submit to the appropriate congressional committees a 
written report assessing— 
(1) the effectiveness of the international finan-
cial institutions in enforcing applicable program 
safeguards in Nicaragua; and 
(2) the effects of the matters described in sec-
tion 2 on long-term prospects for positive develop-
ment outcomes in Nicaragua. 
(c) DEFINITIONS.—In this section: 
(1) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘‘appropriate congressional com-
mittees’’ means— 
(A) the Committee on Foreign Affairs, the 
Committee on Appropriations, and the Com-
mittee on Financial Services of the House of 
Representatives; and 
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(B) the Committee on Foreign Relations, 
the Committee on Appropriations, and the 
Committee on Banking, Housing, and Urban 
Affairs of the Senate. 
(2) 
INTERNATIONAL
FINANCIAL
INSTITU-
TION.—The term ‘‘international financial institu-
tion’’ means the International Monetary Fund, 
International Bank for Reconstruction and Develop-
ment, European Bank for Reconstruction and Devel-
opment, International Development Association, 
International Finance Corporation, Multilateral In-
vestment Guarantee Agency, African Development 
Bank, African Development Fund, Asian Develop-
ment Bank, Inter-American Development Bank, 
Bank for Economic Cooperation and Development in 
the Middle East and North Africa, and Inter-Amer-
ican Investment Corporation. 
(d) TERMINATION.—This section shall terminate on 
the day after the earlier of— 
(1) the date on which the Secretary of State 
certifies and reports to the appropriate congressional 
committees that the requirements of subsection (a) 
are met; or 
(2) 5 years after the date of the enactment of 
this Act. 
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(e) WAIVER.—The President may waive this section 
if the President determines that such a waiver is in the 
national interest of the United States. 
SEC. 5. ORGANIZATION OF AMERICAN STATES. 
(a) FINDINGS.—Congress finds that, according to the 
Organization of American States (OAS) report on the Nic-
araguan 2011 Presidential elections, Nicaragua: Final Re-
port, General Elections, OAS (2011), the OAS made the 
following recommendations to the Government of Nica-
ragua: 
(1) ‘‘Prepare alternative procedures for updat-
ing the electoral roll when a registered voter dies.’’. 
(2) ‘‘Publish the electoral roll so that new addi-
tions, changes of address and exclusions can be 
checked.’’. 
(3) ‘‘Reform the mechanism for accreditation of 
poll watchers using a formula that ensures that the 
political parties will have greater autonomy to ac-
credit their respective poll watchers.’’. 
(4) ‘‘Institute regulations to ensure that party 
poll watchers are involved in all areas of the elec-
toral structure, including the departmental, regional 
and municipal electoral councils and polling stations. 
Rules should be crafted to spell out their authorities 
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and functions and the means by which they can ex-
ercise their authority and perform their functions.’’. 
(5) ‘‘Redesign the CSE administrative structure 
at the central and field levels, while standardizing 
technical and operational procedures, including the 
design of control mechanisms from the time registra-
tion to the delivery of the document to the citizens; 
the process of issuing identity cards should be timed 
to the calendar and, to avoid congestion within the 
process, be evenly spaced.’’. 
(b) ELECTORAL OBSERVATION MISSION.—The Presi-
dent shall direct the United States Permanent Represent-
ative to the Organization of American States (OAS) to 
use the voice, vote, and influence of the United States at 
the OAS to strongly advocate for an Electoral Observation 
Mission to be sent to Nicaragua in 2016 and 2017. 
SEC. 6. STATEMENT OF POLICY. 
The Department of State and the United States 
Agency for International Development should prioritize 
foreign assistance to the people of Nicaragua to assist civil 
society in democracy and governance programs, including 
human rights documentation. 
SEC. 7. REPORT ON CORRUPTION IN NICARAGUA. 
(a) REPORT REQUIREMENT.—Not later than 120 
days after the date of the enactment of this Act, the Sec-
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retary of State, in consultation with the intelligence com-
munity (as defined in section 3(4) of the National Security 
Act of 1947 (50 U.S.C. 3003(4)), shall submit to Con-
gress a report on the involvement of senior Nicaraguan 
government officials, including members of the Supreme 
Electoral Council, the National Assembly, and the judicial 
system, in acts of public corruption or human rights viola-
tions in Nicaragua. 
(b) FORM.—The report required in subsection (a) 
shall be submitted in unclassified form, but may contain 
a classified annex. The unclassified portion of the report 
shall be made available to the public. 
Passed the House of Representatives September 21, 
2016. 
Attest: 
KAREN L. HAAS, 
Clerk. 
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