On May 15, 2024, the U.S. Department of the Treasury's (Treasury) Office of Foreign Assets Control (OFAC) announced new sanctions and the Department of State (State) imposed travel restrictions with respect to Nicaragua in response to reports of Ortega-Murillo regime's "repression of the Nicaraguan people and its ability to manipulate the gold sector and profit from corrupt operations." On the same day, the Departments of State, Homeland Security (DHS), and Treasury issued a joint advisory directed at the aviation and travel industries (the Advisory), which details recommended measures industry stakeholders should take to avoid facilitating "irregular migration" to the U.S. and warns of potential further actions, including sanctions, by the U.S. government to address illicit travel and human trafficking. 

Background 

Sanctions and Travel Restrictions

On May 15, 2024, OFAC announced sanctions on three Nicaragua-based entities for their roles in facilitating and funding the Ortega-Murillo regime's repression of dissent by its citizens. The sanctioned entities include:

1. The Training Center of the Russian Ministry of Internal Affairs in Managua (RTC), a Russian government-backed entity based in Nicaragua that has provided training to the sanctioned Nicaraguan National Police (NNP), which OFAC describes as a "repressive state apparatus"
2. Compania Minera Internacional, Sociedad Anónima (COMINTSA), a Nicaraguan gold mining company reportedly owned by Salvador Mansell Castrillo (Mansell Castrillo), Nicaragua's sanctioned Minister of Energy and Mines 
3. Capital Mining Investment Nicaragua, Sociedad Anónima (Capital Mining), a regime-aligned gold company owned by Laureano Ortega Murillo (son of President Ortega and Vice President Murillo) and Mansell Castrillo

These sanctions were all imposed pursuant to Executive Order (E.O.) 13851, as amended, discussed here. As a result of these sanctions, all property and interests in property owned by these entities are blocked, meaning transactions or dealings of any kind involving these three entities are prohibited. 

Alongside the sanctions designation, State imposed visa restrictions on over 250 Nicaraguan government officials in response to their activities in support of the Ortega-Murillo regime.

Travel Industry Advisory

On May 15, 2024, State, Treasury, and DHS issued the Advisory, which notes measures stakeholders in the travel and aviation industries, including airlines, air charter operators, travel agents, and service providers, should take to ensure their legitimate business activities are not exploited to facilitate human smuggling and irregular migration into the U.S. 

The Advisory highlights the U.S. government's growing concern with Managua, Nicaragua's capital, as a gateway where migrants may disembark from commercial aircrafts and continue to the U.S. southern border over land. To reduce reputational, financial, logistical, and legal risks associated with the facilitation of illicit travel, the Advisory recommends that industry participants:

• Take proactive measures to identify and monitor flight routes known to be used by migrants, migrant smugglers, and human trafficking networks
• Report concerning activities, including travel agencies known or suspected to assist in irregular migration and human trafficking, to relevant authorities, such as Customs and Border Protection (CBP) liaisons, law enforcement and civil aviation authorities, and the International Air Transport Association (IATA)
• Conduct appropriate due diligence, including increased diligence with intermediary companies in the travel industry, such as travel agents, that may conceal their ownership or use other non-transparent practices
• Comply with government regulations requiring the transmission of accurate and timely Advance Passenger Information (API)

Additionally, the Advisory details actions the U.S. government plans to take to disrupt irregular migration, including:

• Cooperating with other governments to gather information on and develop best practices to address irregular migration
• Sharing information and training airlines on how to detect migrant smuggling, human trafficking, and fraudulent documents
• Placing visa restrictions on individuals who knowingly facilitate irregular migration to the U.S. southern border
• Collaborating with other governments and aviation industry actors to investigate and prosecute human smuggling and trafficking cases 
• Imposing sanctions on transnational criminal organizations, including migrant smuggling organizations, their facilitators, and their support networks, pursuant to E.O. 13581, as amended, or under E.O. 13818, which target persons involved in corruption or serious human rights abuses related to human smuggling and other irregular migration 
• Imposing civil penalties on entities and individuals that violate OFAC sanctions, including those who did not know or have reason to know that they were engaging in a prohibited transaction

Key Takeaways

• The new sanctions on COMINTSA and Capital Mining for operating in the gold sector in Nicaragua may signal the U.S. government's intent to more aggressively target entities affiliated with the government of Nicaragua, rather than focusing on those directly involved in human rights abuses or corrupt practices. Notably, while E.O. 13851, as amended, currently authorizes sanctions on persons who are operating or have operated only in the gold sector, the order does explicitly leave open the option to sanction persons operating "in any other sector of the Nicaraguan economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State." Actors engaged in business dealings with any Nicaraguan government-affiliated companies should be aware of the possibility that sanctions may expand beyond the gold sector in the future.
• Actors engaged in business dealings with Nicaraguan individuals or entities, particularly those with ties or affiliations to the government, should ensure they remain up to date on OFAC regulations and sanctions designations to ensure they don't unknowingly engage in conduct that may subject them to civil or criminal penalties.
• The visa restrictions and Advisory highlight the U.S. government's growing concern with air travel as a means of facilitating illicit travel and irregular migration. Participants in the travel and aviation industries should consider adopting the best practices put forth by the U.S. government to prepare themselves for heightened scrutiny during government investigations of migrant smuggling and human trafficking cases and avoid facing liability for complicity in irregular migration and illicit travel.

For more information, please contact:

Timothy P. O'Toole, totoole@milchev.com, 202-626-5552

Laura Deegan, ldeegan@milchev.com, 202-626-5942

Melissa Burgess, mburgess@milchev.com, 202-626-6083

Manuel Levitt, mlevitt@milchev.com, 202-626-5921

Annie Cho, acho@milchev.com, 202-626-1570

Rebecca Tweedie, rtweedie@milchev.com, 202-626-1487

Summer associate Samantha Ortiz-Clark assisted with this alert.

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