Law on the Regulation of Foreign Agents in Nicaragua
On October 19, 2020, Law No. 1040, Law on the Regulation of Foreign Agents, was published in La Gaceta No. 192.
The main purpose of the Law is to establish a legal framework of regulation applicable to natural and legal persons, whether national or foreign, that respond to interests and obtain foreign financing, use those resources to carry out activities that derive in interference of governments, organizations, foreign natural persons in the internal and external affairs of Nicaragua, attempt against the independence, self-determination and national sovereignty, as well as the economic and political stability of the country.
The Law is applicable to:
– Obligated Subjects and/or Foreign Agents.
– Capital or financial resources.
– Goods, assets, and valuable objects related to them.
In that sense, it is worth asking who are considered obligated subjects and/or foreign agents?
In response to this question, in principle it should be mentioned that the Law lacks clarity in providing a concrete definition. However, following the line of the Law, any natural or legal person that within Nicaragua works or performs as an agent, representative, employee, servant or in any other activity under the supervision of a foreign agency or natural or legal person whose activities are subsidized or financed in whole or in part by foreign governments, companies or funds, is a subject of obligation.
And according to the Law, a Foreign Agent is any Nicaraguan natural or legal person or of any other nationality, that within Nicaragua receives funds, goods or any object of value coming directly or indirectly from natural persons, Governments, Agencies, Foundations, Societies, etc.
It is important to note that the Law establishes a series of exceptions, that is, those who are exempted from the scope of application of the Law.
According to the Law, the authority in charge of regulating, supervising and sanctioning in this matter will be the Ministry of the Interior, and the intention is to create the Registry of Foreign Agents, in which all Obligated Subjects and/or Foreign Agents must register.
The Law establishes the obligation of the Obliged Subjects to register within 60 working days, counting from the entry into force of the Law. In this sense, it is very important that all those organizations that consider themselves Obligated Subjects and/or Foreign Agents have this obligation in mind, otherwise the authority in charge may establish sanctions ranging from fines to the impediment of the movement of financial resources.
Valeska Fonseca Torrez
Associate
García & Bodán
Nicaragua