Four days after its approval, Law number 1040, the “Law for the Regulation of Foreign Agents,” came into effect. Published in La Gaceta, Official Gazette number 192 on October 19, 2020 (the “Law”), it has been controversial both nationally and internationally.
One of the legislators’ considerations for approving the “Law” is based on Article 1 of the Political Constitution of the Republic of Nicaragua, which establishes that independence, sovereignty, and national self-determination are inalienable rights of the people and the foundation of the nation. Therefore, any foreign interference in Nicaragua’s internal affairs or any attempt to undermine these rights is an attack on the life of the people.
The purpose of the “Law” is to establish a legal framework of regulation applicable to national or foreign individuals or legal entities who, in response to foreign interests and with foreign funding, use these resources to carry out activities that result in the interference of foreign governments, organizations, or individuals in the internal and external affairs of Nicaragua, threatening the nation’s independence, self-determination, and sovereignty, as well as the country’s economic and political stability.
The scope of this “Law” applies to the obliged subjects, which, according to Article 4, include any Nicaraguan or foreign individual or legal entity that works or acts within Nicaragua as an agent, representative, employee, or in any other capacity under the order, requirement, instruction, direction, supervision, or control of a foreign entity or a foreign individual or legal entity, whose activities are directly or indirectly supervised, directed, controlled, financed, or subsidized in whole or in part by a foreign individual, government, capital, company, or funds, either directly or through third-party individuals or legal entities. These obliged subjects must register in the Registry of Foreign Agents within 60 business days from the Law’s entry into force.
Article 5 of the “Law” establishes the following exceptions to its scope of application:
- Pensioner and annuitant residents.
- Individuals who receive family remittances.
- Foreign productive and commercial companies with branches or subsidiaries in Nicaragua.
- Foreign-owned factories, industries, and supermarket chains, their employees, and service providers.
- Individuals who establish commercial relationships under the conditions of existing agreements, treaties, and commercial conventions, particularly investments, service provision, and the temporary entry of business persons, in accordance with current legislation.
- Intergovernmental humanitarian organizations. As well as Diplomatic and Consular Missions, International and Regional Organizations, International Cooperation Agencies, and the personnel of these entities, duly accredited in Nicaragua in accordance with the Vienna Conventions on Diplomatic and Consular Relations and the agreements subscribed and in force with the organizations.
- International social communication media and their correspondents.
- Religious legal entities that are duly registered with the Ministry of the Interior.
Foreign agents are obligated to inform the competent authority prior to any transfer of funds or assets they are to receive, directly or indirectly, from foreign individuals, governments, agencies, foundations, organizations, companies, or associations of any type or nature, to carry out their activities as a foreign agent. They must also report the use and destination of said funds.
The Ministry of the Interior, through its designated body, has the authority for regulation, supervision, and sanctions in this matter.