US Sanctions Hit the Nicaraguan Police Finances


Justo Pastor Urbina, head of the National Police Special Operations, Luis Alberto Perez Olivas, chief of the Direction of Judicial Assistance, and Juan Valle Valle, head of the National Police Transit division. Photo montage: Confidencial

The police as an institution will be left without their bank accounts and without the possibility of accessing external credits, from multilateral institutions such as the Central American Bank for Economic Integration.

By Juan Carlos Bow  (Confidencial)

HAVANA TIMES – The finances of the Nicaraguan police received a hard blow from the sanctions imposed on March 5th by the US Treasury Department, due to their role in the “serious human rights abuses in Nicaragua.

Political analysts and experts in security told Confidencial that, among the consequences of the sanctions on the police, their “financial and operational” capacities will be restricted.

Political scientist Manuel Orozco, researcher with Inter-American Dialogue, commented that the sanctions “set a very important precedent against institutions of public safety”. The Police is the first state institution to be punished by the United States, given that the five previous entities – the Albanisa company, the oil company Petronic, the bank Bancorp, the security company El Goliat and Zanzibar inivestments – were all either autonomous bodies, private companies or mixed enterprises.

“This obligates the national and international financial system to discontinue their banking and financial transactions with the Nicaraguan Police. This in turn affects the functionaries that are on the payroll of the police system,” explained Orozco.

Roberto Cajina, a specialist in topics of defense and national security pointed out that the administrative impact would be due “to the complications” that the institution would have to pay all of their officers, since they currently do so through debit cards, which will stop functioning when the banks close the accounts of the Police.

“It can be foreseen that they’ll return to the old system of paying in cash, which will inevitably add stress to the Police administration, because it would create serious problems from the headquarters in the Plaza del Sol down to the last police department, passing through the Managua districts and on to the departmental and municipal delegations,” the expert underlined.

Sanctions bring consequences on all levels

The Police violently detain two youth near the “Las Flores” Café on the Masaya Highway. Photo: Carlos Herrera

Cajina alerted that the political impact of the sanctions “remained to be seen” but “it’s to be expected that the upper echelons of the police begin a campaign at all levels within the institution to convince the middle command levels in particular that they’re not the ones responsible for the sanction, but the opponents of the regime and the United States itself.”

This campaign would be to avoid the development of “a state of ill-feeling that, if generalized, could lead to a severe internal crisis which in turn could put at risk the institution’s very existence.”

Juan Sebastian Chamorro, executive director of the opposition organization Civic Alliance for Justice and Democracy and a member of the National Coalition, told a national media outlet that a local policeman, a traffic policeman or a member of the municipal police “now form part of an organization considered as criminal on an international level.”

Police repress citizens that are demonstrating at the Metrocentro commercial center in Managua. In the photo, an official has just struck Juan Sebastian Chamorro (in the white shirt) with his fist, while he was attempting to aid the mother of a political prisoner. Photo: Carlos Herrera.

“On being internationally classified as an organization that violates human rights, they close their bank accounts, so that they’ll be obligated to pay their salaries in cash. The pension fund remains frozen because its financial administration is no longer possible. They won’t be able to invest in housing projects,” Chamorro said.

He added that “the Police hospital will have to be nationalized, and transferred over to the health system, to be administered by the Health Ministry.”

They have until May

Along with the sanction, the US Treasury Department’s Office of Foreign Assets Control issued a license in which it authorizes the United States entities to effect “a gradual reduction in the transactions related [to the Nicaraguan Police] “including transactions of salary payments to their employees, up until May 6, 2020.”

This deadline will obligate the police to close their accounts in those national banks that have correspondent banking relations with US banks. In the case of Nicaragua that includes all the banking and financing entities.

“The banks have their own mechanisms and regulations. They can send letters at the beginning of May, or tomorrow, and give other deadlines,” added a source that asked to remain anonymous.

Police patrol vehicles with riot police keep a watch on the entrances of the Nicaraguan Engineering University and the University of Central America in Managua. Photo: Carlos Herrera.

An analyst in matters of security who asked that his name be withheld, explained that the bank accounts of the police could be directly managed through the Finance Ministry of they could create “other institutional figures to maintain those accounts.”

Nicaragua’s Police are out of the international arena

Political scientist Manuel Orozco underlined that the closure of the accounts “is a moral, political and financial blow against an internationally discredited institution which the financial system will now remove from the international setting.”

“Neither the functionaries nor the institution as such will be able to make any kind of transactions, understood as purchase of supplies, food, boots, uniforms for their officials, etc.,” detailed sociologist and researcher Elvira Cuadra.

According to Cuadra, the sanctions will also affect the loans that international organizations can give them, as is the case with the Central American Economic Integrationi Bank which in mid-2019 opened a series of requests for bids to improve the operational capacity of the Police, a project that is still under development.

Roberto Cajina, an analyst on topics of security, indicated in addition that the Police will have “serious complications” in getting access to cooperation moneys from multilateral organizations in areas of development, training, equipment and building construction.

Youth holding a protest in the parking lot of the private commercial center “Metrocentro”, surrounded by the regime’s police. Photo: Carlos Herrera.

Former Sandinista guerrilla Dora María Tellez, said the police as an institution will suffer a loss of legitimacy in the Central American region. The Police, in what is known as the Northern Triangle (Honduras, El Salvador and Guatemala), receive funds to confront the gangs, “and they well be forced to isolate themselves from the Ortega Police,” said the founder of the Sandinista Renewal Movement (MRS).

Elvira Cuadra warned that the sanction can be a “double-edged sword”, because apart from punishing the repressive work of the Police, it also affects funds destined to combat common crime. “It is a serious point of consideration of the United States. Although common crime is a risk, they consider political violence a primary issue to punish,” said Cuadra.

Siege of churches

Police agents stationed in front of the San Antonio church, in Jinotepe, Carazo, in July 2019. Photo: Carlos Herrera / Confidencial

“International organizations and foreign governments that have financing agreements with the Ortega Police for the purchase of weapons, vehicles, motorcycles, shields, uniforms and other equipment for the operation, may now only operate in cash. However, this has another difficulty, because the company or country that supplies the Nicaraguan Police will be linked to violations of human rights,” Juan Sebastian Chamorro told the local media.

Political activist Félix Maradiaga, director of the closed Institute of Strategic Studies and Public Policies, wrote in an opinion article that “although these institutional sanctions to the Ortega Police are something that was seen coming, they are devastating. In the first place, they are very strong sanctions in financial matters since it makes the police institution a highly toxic organization for the entire Nicaraguan and international financial system.”

“In practical terms, the Ortega Police are placed on the same level as other organized crime organizations that are banned from carrying out any transaction with banking entities that have relations with the US financial system,” he added.

Police sanctions are warning to other institutions

Téllez remarked that the sanction is an “extremely serious precedent” for the regime of Daniel Ortega and Rosario Murillo, given that the United States “has already begun to touch its institutional arms of power.”

In more than two years, the United States has sanctioned 18 regime officials – including the three recent ones: Luis Alberto Pérez Olivas, Justo Pastor Urbina and Juan Alberto Valle – and six institutions, including the Police.

“The message of the US sanction to the Police as an entity is very clear: No institution of the State of Nicaragua, including the Army, is out of the sights of Washington’s sanctions,” said Cajina.

However, he clarified that “to ensure that the sanction to the Police is a direct or indirect message to the Army would be to fall into the realm of speculation. Most likely, military authorities are analyzing and evaluating the turn of events with the sanction of the Police as an institution.”

For another expert, who requested anonymity, the sanction “should alert the Nicaraguan Army”, since they have “important funds as an institution in the United States.” The Institute of Military Social Security, the public investment fund of the Nicaraguan Army, has millions in investments in the New York Stock Exchange.

*With the contribution of Wilfredo Miranda and Maynor Salazar


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