Title: Nicaraguan Investment Conditionality Act (NICA) of 2017
Policy area: International Affairs

Summary:
Nicaraguan Investment Conditionality Act (NICA) of 2017
This bill directs the President to instruct the U.S. Executive Director at each international financial institution to oppose a loan for budget support for the government of Nicaragua unless the Department of State reports that Nicaragua is taking effective steps to (1) hold free elections; (2) promote democracy; (3) strengthen the rule of law; (4) combat corruption; (5) protect the right to freedom of expression; (6) protect the rights of indigenous people; and (7) protect the rights of political opposition parties, journalists, and other civil society activists to operate without interference.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2265 Introduced in Senate (IS)]

<DOC>






115th CONGRESS
  1st Session
                                S. 2265

 To promote democracy and the rule of law in Nicaragua, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 21, 2017

Mr. Cruz (for himself, Mr. Leahy, Mr. Rubio, Mr. Perdue, Mr. Menendez, 
 Mrs. Capito, and Mr. Durbin) introduced the following bill; which was 
     read twice and referred to the Committee on Foreign Relations

_______________________________________________________________________

                                 A BILL


 
 To promote democracy and the rule of law in Nicaragua, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

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

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) The Committee on Foreign Affairs of the House of 
        Representatives convened a congressional hearing on December 1, 
        2011, entitled ``Democracy Held Hostage in Nicaragua: Part 1'' 
        where former United States Ambassador to Nicaragua Robert 
        Callahan testified ``[f]irst, that Daniel Ortega's candidacy 
        was illegal, illegitimate, and unconstitutional; second, that 
        the period leading to the elections and the elections 
        themselves were marred by serious fraud; third, that Daniel 
        Ortega and his Sandinista party have systematically undermined 
        the country's fragile governmental institutions''.
            (2) According to the Organization of American States (OAS) 
        report on the 2011 Presidential elections in Nicaragua, the OAS 
        recommended that the Government of Nicaragua take a number of 
        steps to improve its electoral system, including accrediting 
        poll watchers to ensure political parties and civil society are 
        represented to observe elections, and redesigning the structure 
        of the Nicaraguan electoral council to allow proper 
        registration of the electorate.
            (3) On January 25, 2012, a press statement from Secretary 
        of State Hillary Clinton stated, ``As noted by international 
        observers and Nicaraguan civil society groups, Nicaragua's 
        recent elections were not conducted in a transparent and 
        impartial manner, and the entire electoral process was marred 
        by significant irregularities. The elections marked a setback 
        to democracy in Nicaragua and undermined the ability of 
        Nicaraguans to hold their government accountable.''.
            (4) According to the Department of State's 2015 Fiscal 
        Transparency Report: ``Nicaragua's fiscal transparency would be 
        improved by including all off-budget revenue and expenditure in 
        the budget, auditing state-owned enterprises, and conducting a 
        full audit of the government's annual financial statements and 
        making audit reports publicly available within a reasonable 
        period of time.''.
            (5) According to the Department of State's Country Reports 
        on Human Rights Practices for 2015 in Nicaragua: ``In 2011 the 
        Supreme Electoral Council (CSE) announced the re-election of 
        President Daniel Ortega Saavedra of the Sandinista National 
        Liberation Front (FSLN) in elections that international and 
        domestic observers characterized as seriously flawed. 
        International and domestic organizations raised concerns 
        regarding the constitutional legitimacy of Ortega's re-
        election. The 2011 elections also provided the ruling party 
        with a supermajority in the National Assembly, allowing for 
        changes in the constitution, including extending the reach of 
        executive branch power and the elimination of restrictions on 
        re-election for executive branch officials and mayors. 
        Observers noted serious flaws during the 2012 municipal 
        elections and March 2014 regional elections.''.
            (6) According to the Department of State's Country Reports 
        on Human Rights Practices for 2015 in Nicaragua: ``The 
        principal human rights abuses were restrictions on citizens' 
        right to vote; obstacles to freedom of speech and press, 
        including government intimidation and harassment of journalists 
        and independent media, as well as increased restriction of 
        access to public information, including national statistics 
        from public offices; and increased government harassment and 
        intimidation of nongovernmental organizations (NGOs) and civil 
        society organizations''.
            (7) The same 2015 report stated: ``Additional significant 
        human rights abuses included considerably biased policies to 
        promote single-party dominance; arbitrary police arrest and 
        detention of suspects, including abuse during detention; harsh 
        and life-threatening prison conditions with arbitrary and 
        lengthy pretrial detention; discrimination against ethnic 
        minorities and indigenous persons and communities.''.
            (8) On June 7, 2016, the Department of State's Bureau of 
        Democracy, Human Rights and Labor posted on social media: 
        ``Disappointed government of Nicaragua said it will deny 
        electoral observers requested by Nicaraguan citizens, church, 
        and private sector . . . We continue to encourage the 
        government of Nicaragua to allow electoral observers as 
        requested by Nicaraguans.''.
            (9) On August 1, 2016, the Department of State issued a 
        press release expressing grave concern with the Government of 
        Nicaragua limiting democratic space leading up to the elections 
        in November and stated, ``[O]n June 8, the Nicaraguan Supreme 
        Court stripped the opposition Independent Liberal Party (PLI) 
        from its long recognized leader. The Supreme Court took similar 
        action on June 17 when it invalidated the leadership of the 
        Citizen Action Party, the only remaining opposition party with 
        the legal standing to present a presidential candidate. Most 
        recently, on July 29, the Supreme Electoral Council removed 28 
        PLI national assembly members (16 seated and 12 alternates) 
        from their popularly-elected positions.''.
            (10) On November 7, 2016, the Department of State issued a 
        press release stating, ``The United States is deeply concerned 
        by the flawed presidential and legislative electoral process in 
        Nicaragua, which precluded the possibility of a free and fair 
        election on November 6. In advance of the elections, the 
        Nicaraguan government sidelined opposition candidates for 
        president, limited domestic observation at the polls and access 
        to voting credentials, and took other actions to deny 
        democratic space in the process. The decision by the Nicaraguan 
        government not to invite independent international electoral 
        observers further degraded the legitimacy of the election.''.
            (11) In November and December of 2016, the Board of 
        Executive Directors of the Inter-American Development Bank 
        postponed consideration of a policy-based loan of $65,000,000 
        to the Government of Nicaragua due to the serious concerns of 
        the United States mission with the absence of transparency, 
        systemic corruption, and the lack of free and fair elections in 
        Nicaragua.
            (12) According to the Department of State's Country Reports 
        on Human Rights Practices for 2016 in Nicaragua: ``actions by 
        the ruling Sandinista National Liberation Front (FSLN) party 
        resulted in de facto concentration of power in a single party, 
        with an authoritarian executive branch exercising significant 
        control over the legislative, judicial, and electoral 
        functions.''.
            (13) According to the Department of State's Country Reports 
        on Human Rights Practices for 2016 in Nicaragua: ``The November 
        6 elections for president, vice president, national assembly 
        members, and representatives for the Central American 
        parliament did not meet the conditions of being free and fair . 
        . . The November 6 presidential and legislative elections were 
        marred by allegations of institutional fraud and the absence of 
        independent opposition political parties. National observers 
        and opposition leaders claimed rates of abstention from 60 to 
        70 percent.''.
            (14) According to the Department of State's Country Reports 
        on Human Rights Practices for 2016 in Nicaragua: ``Companies 
        reported that bribery of public officials, unlawful seizures, 
        and arbitrary assessments by customs and tax authorities were 
        common . . . The courts remained particularly susceptible to 
        bribes, manipulation, and other forms of corruption, especially 
        by the FSLN, giving the sense that the FSLN heavily influenced 
        CSJ and lower-level court actions.''.
            (15) On December 21, 2017, the Department of the Treasury 
        issued a press release announcing the designation of, and 
        sanctions against, human rights abusers and corrupt actors, 
        including Roberto Rivas, the President of Nicaragua's Supreme 
        Electoral Council, pursuant to the Global Magnitsky Human 
        Rights Accountability Act (subtitle F of title XII of Public 
        Law 114-328). The press release states, in part: ``As President 
        of Nicaragua's Supreme Electoral Council, drawing a reported 
        government salary of $60,000 per year, Roberto Jose Rivas Reyes 
        (Rivas) has been accused in the press of amassing sizeable 
        personal wealth, including multiple properties, private jets, 
        luxury vehicles, and a yacht. Rivas has been described by a 
        Nicaraguan Comptroller General as `above the law', with 
        investigations into his corruption having been blocked by 
        Nicaraguan government officials. He has also perpetrated 
        electoral fraud undermining Nicaragua's electoral 
        institutions.''.

SEC. 3. STATEMENT OF POLICY.

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

SEC. 4. INTERNATIONAL FINANCIAL INSTITUTIONS.

    (a) In General.--The President shall instruct the United States 
Executive Director at each international financial institution to use 
the voice and vote of the United States to oppose any loan for budget 
support for the Government of Nicaragua, other than to address basic 
human needs or to promote democracy, unless, in the preceding 12 
months, the Secretary of State has certified and reported to the 
appropriate congressional committees that the Government of Nicaragua 
is taking effective steps--
            (1) to hold free and fair elections overseen by credible 
        domestic and international electoral observers;
            (2) to promote democracy, as well as an independent 
        judicial system and electoral council;
            (3) to strengthen the rule of law;
            (4) to respect the right to freedom of expression and 
        association;
            (5) to combat corruption, including investigating and 
        prosecuting government officials credibly alleged to be 
        corrupt;
            (6) to protect the right of political opposition parties, 
        journalists, trade unionists, human rights defenders, and other 
        civil society activists to operate without interference; and
            (7) to protect the rights of indigenous people.
    (b) Report.--Not later than 180 days after the date of the 
enactment of this Act, the Secretary of the Treasury shall submit, to 
the appropriate congressional committees, a written report assessing--
            (1) the effectiveness of the international financial 
        institutions in enforcing applicable program safeguards in 
        Nicaragua; and
            (2) the impact of the matters described in section 2 on 
        long-term prospects for positive development outcomes in 
        Nicaragua.
    (c) Annual Reports by the Secretary of State.--The Secretary of 
State shall annually submit, to the appropriate congressional 
committees, a report on whether the Government of Nicaragua is taking 
effective steps with respect to the matters set forth in subsection 
(a), and if the Government of Nicaragua is taking effective steps with 
respect to all such matters, shall certify such to the appropriate 
congressional committees.
    (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 under subsection (a) have been met; or
            (2) 5 years after the date of the enactment of this Act.
    (e) Waiver.--The President may waive the requirements under this 
section if the President determines that such a waiver is in the 
national interest of the United States.

SEC. 5. REPORT ON CORRUPTION AND MONEY LAUNDERING IN NICARAGUA.

    (a) Report Requirement.--Not later than 90 days after the date of 
the enactment of this Act, the Secretary of State, in consultation with 
the intelligence community (as defined in section 3(4) of the National 
Security Act of 1947 (50 U.S.C. 3003(4))), shall submit, to the 
appropriate congressional committees, a report on the involvement of 
senior Government of Nicaragua officials, including members of the 
Supreme Electoral Council, the National Assembly, and the judicial 
system, in acts of public corruption, money laundering, or human rights 
violations in Nicaragua.
    (b) Form.--The report required under 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.

SEC. 6. REPORT ON ACTIVITIES OF CERTAIN REGIMES IN NICARAGUA.

    (a) In General.--Not later than 90 days after the date of the 
enactment of this Act, the Secretary of State, acting through the 
Bureau of Intelligence and Research of the Department of State and in 
consultation with the intelligence community (as defined in section 
3(4) of the National Security Act of 1947 (50 U.S.C. 3003(4))), shall 
submit, to the appropriate congressional committees, a report that 
describes the extent of cooperation by the Governments of the Russian 
Federation and the Bolivarian Republic of Venezuela (including 
Petroleos de Venezuela, S.A. (PDVSA)) with the Government of Nicaragua 
and the Nicaraguan armed forces and security personnel.
    (b) Form.--The report required under subsection (a) shall be 
submitted in unclassified form, but may include a classified annex. The 
unclassified portion of the report shall be made available to the 
public.

SEC. 7. DEFINITIONS.

    In this Act:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Foreign Relations of the 
                Senate;
                    (B) the Committee on Appropriations of the Senate;
                    (C) the Committee on Banking, Housing, and Urban 
                Affairs of the Senate;
                    (D) the Committee on Foreign Affairs of the House 
                of Representatives;
                    (E) the Committee on Appropriations of the House of 
                Representatives; and
                    (F) the Committee on Financial Services of the 
                House of Representatives.
            (2) International financial institution.--The term 
        ``international financial institution'' includes--
                    (A) the International Monetary Fund;
                    (B) the International Bank for Reconstruction and 
                Development;
                    (C) the International Development Association;
                    (D) the International Finance Corporation;
                    (E) the Multilateral Investment Guarantee Agency;
                    (F) the Inter-American Development Bank; and
                    (G) the Inter-American Investment Corporation.
                                 <all>