Assembly approves ENIMEX Law in Nicaragua
On October 30th, the National Assembly approved the controversial Law for the Creation of the Nicaraguan Imports and Exports Company (ENIMEX). According to official statements, the purpose of ENIMEX is to contribute to the achievement of food security and sovereignty policies, agricultural productive development and promotion of micro, small and medium enterprises, in order to continue with the reduction of inequalities and poverty. However, since the initiative of the Law was announced, it caused concern in various sectors, which fear that it may be an attempt by the State of Nicaragua to compete with private sector companies.
ENIMEX would be the successor of the Nicaraguan Imports Company (Enimport), which was created in 1980 through Decree 271 that reformed the Law of the Ministry of Foreign Trade. Since 1999, it became part of the Ministry of Finance and has been dedicated to importing products for State institutions, mainly related to disaster relief, metal-mechanic sector and commercializing donations to create countervalue funds and finance social programs.
ENIMEX will aim to carry out transactions of goods, merchandise, products and services in general, including acting as buyer and seller of the State. It can associate, establish mixed economy companies, temporary unions, strategic alliances and any act or contract allowed by national laws, with natural or legal persons, national or foreign, public or private. It is precisely the vast field of action of ENIMEX and the possibility of setting up joint ventures, which most concerns various sectors. ENIMEX could compete with the private sector and even be a provider of the same State.
As a result of the concerns expressed by the private sector, the tax benefits regime that ENIMEX would enjoy and the use of the term “discretionary” to characterize the way in which the company can act in the exercise of its activities were eliminated from the final text of the Law. However, the private sector now raises the possibility of appealing against the Law, considering it causes legal uncertainty and limits private investments, by risking the sustainability of the export sector, which has been handled privately in recent decades.
Michelle Avilés Murillo
Associate
García & Bodán
Nicaragua