By Council Decision (CFSP) 2019/1720 of 14 October 2019 concerning restrictive measures in view of the situation in Nicaragua (OJEU L 262 of 15 October 2019, p. 58 et seq.) and Council Regulation (EU) 2019/1716 of 14 October 2019 concerning restrictive measures in view of the situation in Nicaragua (OJEU L 262 of 15 October 2019, p. 1 et seq.), the European Union (EU) has begun to sanction the Central American State.
The reason for the sanctions is that, according to the EU, the Nicaraguan authorities are repressing civil society and the press by using anti-terrorist laws to this end. The demonstrations have also been brutally repressed by security forces and government-related armed groups, resulting in hundreds of fatalities and injuries, as well as arrests with widespread irregularities and arbitrary judicial procedures. In this regard, the Government of Nicaragua is urged to resume the process of national dialogue and carry out electoral reforms.
In any event, European provisions must respect fundamental rights and in particular the rights to effective judicial protection and to an impartial judge and to the protection of personal data.
Generally speaking, it can be said that the restrictions imposed on Nicaragua are not particularly strict if we compare them with those suffered or suffered by other countries. However, both the CFSP Decision and the Regulation open the way for the sanctions against Nicaragua to be extended quickly and extensively in a surprising manner.
For the time being, the restrictions that have been imposed on that Central American state are essentially focused on two aspects: the prohibition for certain persons to enter and transit the territory of the EU and the freezing of funds for certain natural and legal persons.
The ban on access to or transit through EU territory will affect the natural persons listed in the Annex to the CFSP Decision. This Annex will include (A) those responsible for serious violations of human rights or repression of civil society and the democratic opposition in Nicaragua, (B) also those subjects whose political actions or activities otherwise undermine democracy or the rule of law in that country and (C) those associated with the persons referred to in the previous paragraphs. The use of a concept as indeterminate and vague as "associated" makes it possible to include a large number of people simply because they have a small link with the Government, the leaders, the Armed and Security Forces, public enterprises and the economy or politics of Nicaragua (Article 1 of the Decision).
However, EU Member States will not be obliged to refuse their own nationals entry to their territory; this is important in cases of dual nationality. Similarly, the restriction of access and transit is without prejudice to cases in which an EU Member State is bound by a provision of international law to allow access to or passage through its territory; whether it hosts an international intergovernmental organisation, an international conference convened or hosted by the United Nations or the OSCE; whether it is bound by a multilateral agreement conferring privileges and immunities, or by the Lateran Pact. In addition, Member States may grant exemptions where travel is justified on urgent humanitarian grounds.
The regulation of the freezing of funds and economic resources deserves special attention. Regulation (EU) 2019/1716 defines these concepts. The freezing of funds is the act of preventing any movement, transfer or similar operation whose result is a change in volume, amount, location, etc. of the same or any other change that allows its use, including portfolio management. Freezing of economic resources is the act of preventing the use of economic resources to obtain funds, goods or services in any way, including but not limited to selling, renting, mortgaging, etc. Funds are financial assets and benefits of any kind such as, inter alia, cash and any payment instrument, deposits with financial institutions or other entities, debt obligations, negotiable securities and public and private debt instruments, interest and dividends, loans, guarantees or other financial commitments, letters of credit, bills of lading and documents evidencing an interest in funds or financial resources. Economic resources are assets of every kind, tangible or intangible, movable or immovable, which are not funds but can be used to obtain funds, goods or services.
The Regulation provides that all funds and economic resources belonging to, owned, held or controlled by any natural or legal person, entity or body listed in Annex I shall be frozen; nor, of course, shall such funds and economic resources be made available to them.
This Annex shall include natural or legal persons, entities and bodies which (A) are responsible for serious violations of human rights or for the repression of civil society and democratic opposition in Nicaragua, (B) undermine democracy and the rule of law in Nicaragua and (C) are associated with the natural or legal persons, entities or bodies referred to in the preceding paragraphs. Again, we must remember the expansive effect that the term "associates" can have.
In the respective Annexes, in addition to all the data identifying those sanctioned, the reasons for which the restriction is imposed on each person or entity shall be contained. In addition, the Board will communicate its decision and justification directly or through the publication of an announcement.
At the moment Annex I of the Regulation (Annex to the Decision) is empty, it does not contain any name of natural or legal person. But the European authorities can include names in it quickly and surprisingly through the enactment of Regulations. The EU's policy is to increase sanctions gradually and progressively depending on how events in Nicaragua unfold.
Regulation (EU) 2019/1716 provides that the competent authorities of each country (listed in its Annex II) may, under certain conditions, authorise the release of certain funds or resources frozen for, amongst others, humanitarian reasons (basic needs, medicines, etc.), payment of professional services (legal expenses and others), payment of obligations imposed by an arbitral, judicial or administrative decision rendered prior to the subject's inclusion in the lists of sanctioned persons and payment due from such persons under a contract concluded prior to their inclusion in the said lists.
It is prohibited to participate, knowingly and intentionally, in activities which the object or effect of is to circumvent the measures laid down in the rules on penalties (Article 9 of the Regulation).
It should be stressed that the freezing of funds and economic resources carried out in good faith and with the intention of applying restrictive legislation will not give rise to liability of any kind on the part of the natural or legal persons implementing them or their managers or employees (Article 10 of the Regulation). It should also be taken into consideration that no claim relating to a contract or transaction the performance of which has been affected by the restrictive measures, including claims for compensation, indemnification or by way of guarantee, will be upheld if it is brought by the persons and entities listed in Annex I to the Regulation (Annex to the Decision) or by any other person acting through or on behalf of them, unless the latter proves that the rules on sanctions do not apply in the specific case (Article 11 of the Regulation).
EU Member States shall lay down the rules on penalties applicable to infringements of the Regulation and shall take all measures necessary to ensure that they are implemented. The sanctions must be effective, proportionate and dissuasive (Article 15 of the Regulation).
Regulation (EU) 2019/1716 shall apply within the territory of the EU, including its airspace, and on board any vessel or aircraft under the jurisdiction of an EU Member State. It applies to any person inside or outside the territory of the Union who is a national of a Member State, to any legal person, entity or body inside or outside the territory of the Union, registered or incorporated under the law of a Member State, and to any legal person, entity or body in relation to any business done in whole or in part within the Union (Article 18).
We must remember that the subjects who are affected by the restrictions imposed by this regulation will be able to act against it by means of two mechanisms. One is to ask the Council to reconsider their inclusion in the respective Annexes, the other is to bring an action for annulment before the General Court of the EU. Both mechanisms are not mutually exclusive and, in many cases, both will be presented.
With all this we see that the EU is once again using economic sanctions as an instrument to achieve certain political objectives in the international framework. We will have to pay close attention to the future legislative and judicial developments in this area.
"The restrictions… are focused on two aspects: the prohibition for certain persons to enter and transit the territory of the EU and the freezing of funds for certain natural and legal persons."