How the Ortega Murillo regime uses banks to sabotage opposition forces

La Prensa is publishing this series of two articles prepared by Public Record as part of an alliance.

The freezing and closure of accounts, the cancellation of credit cards, certificates of deposits, insurance policies, and other banking services have been turned into repressive instruments by the Ortega-Murillo regime against its opponents, according to victims and organizations consulted by Public Record.

In some cases, banks are “courteous” enough to inform their customers of the decision to cancel their services, with the main argument being the application of existing legal frameworks for preventing money laundering.

But most of the affected individuals are not even told the reasons behind the bank’s decision to freeze or suspend services, let alone what happened to the money or assets in their accounts.

Nicaraguans who have faced legal accusations for political reasons, interviewed by Public Record, assume that these actions are part of the proceedings against them. Some attribute it to their relationship with a Non-Governmental Organization (NGO), while others simply do not understand why the bank they trusted made that decision.

Amid the terror of reporting these abuses, new stories emerge daily on this topic. Among the victims are nearly four thousand NGOs that the regime began to shut down in December 2018 by revoking their legal status.

The use of the financial system against opposition and dissidence in Nicaragua has become so common that the Group of Human Rights Experts on Nicaragua (GHREN) of the United Nations (UN) included it in the second report on the situation in Nicaragua presented in early March.

According to GHREN, the regime’s persecution against real and perceived opponents has become more subtle, depriving victims of other rights, including their livelihoods, such as work, income, bank accounts, and other assets.

Since 2019, bank accounts and certificates of deposit have been frozen, and credit cards, insurance policies, and other services have been canceled for individuals or entities considered opposed by the regime.

Among the affected are also 222 former political prisoners whom Daniel Ortega deported to the United States on February 9, 2023, and later stripped of their nationality and confiscated their assets.

Later, 94 Nicaraguans who were denationalized and had their assets confiscated a few days after that flight were added to the list.

The first cases of closed accounts occurred in 2019, and five years later, instead of ending, it continues, but now also in Costa Rica, where thousands of political refugees have sought refuge.

Over time, the blacklist of banks has included some NGOs that moved their operations to Costa Rica and others that were established in the country as a result of the crisis, as well as former political prisoners, human rights defenders, journalists, administrative staff of media organizations, and opponents in general.

The measure is now replicated in that country, and there is fear that it will also spread to the United States, as these two countries account for a significant portion of the leaders of political, social, business, and student organizations, former political prisoners, NGO executives, journalists, human rights defenders, and other groups that are the main targets of Ortega’s attacks.

Four entities have been mainly singled out: the Central American Bank (BAC Nicaragua), Bancentro Lafise Bank, Production Bank (Banpro), and Finance Bank (BDF).

There are also cases of financial institutions that closed accounts but still rigorously collect personal loans through various mechanisms. Failing to honor these payments damages the credit history of the affected individual, even in Costa Rica.

One of the first victims of the new repressive method was the now-defunct Río Foundation, an environmental organization led by activist Amaru Ruiz, also denationalized in 2023.

In December 2018, in the midst of the socio-political crisis, National Assembly deputies revoked the legal status of the Río Foundation and confiscated its assets. Between January and February 2019, Banpro froze $25,000 donated by international cooperation to finance projects of the Río Foundation, an organization that had been working since 1990 to protect the natural ecosystems of southeastern Nicaragua.

To date, Banpro has not notified Ruiz whether the money is still frozen or if the Ortega regime ordered it to be transferred to the state.

Since then, the list of those affected by this repressive measure continues to grow, and in cases where banks notify the affected individual, they do so under the pretext of compliance with Resolution CD-SIBOIF-524-1-MAR5-2008, which is the Standard for Anti-Money Laundering Risk Management, Asset, and Terrorist Financing.

Banks also adhere to Law 977 Against Money Laundering, Terrorist Financing, and Proliferation Financing of Weapons of Mass Destruction.

The environmentalist and former director of the now-defunct Río Foundation, Amaru Ruiz, warns that if these closures are now justified by compliance with Law 977, in the case of the Río Foundation, they could not have done so because that law was approved in May 2021, almost two years after their money was frozen.

Not only closed NGOs had their money frozen; individuals also had their accounts frozen.

In June 2021, nearly two years before being included in the list of 94 Nicaraguans who were denationalized and had their assets confiscated, a political analyst tried to withdraw money from their personal account at Banpro but could not do so as the cashier informed them that their account was frozen.

Knowing that their accounts were frozen alerted them and prompted them to leave the country, so they could not return to the bank to demand an explanation since before February 2023, when they were included in the list of the 94 denationalized individuals, they were never involved in any judicial case to justify the measure.

These mentioned examples are indicative of the actions of banks, described by various affected individuals interviewed by Public Record as theft or abuse committed against them by the financial institutions they trusted to safeguard their money.

This practice also applies to legal entities, such as the Río Foundation, which were stripped of their legal status, but also to individuals involved in judicial processes.

However, Public Record has documented cases of individuals who have not been linked to any accusations but have nonetheless had the right to have bank accounts, certificates of deposits, insurance policies, and use credit cards taken away by “someone.”

Furthermore, the repressive practice involves individuals in refugee status or seeking refuge in Costa Rica where for several months, without convincing justification, BAC and Lafise have closed accounts.

There are also reports of exiled organizations affected in this country that had financial relationships and have been denied service, according to reports to Public Record.

Due to the diversity and current location of the affected individuals, it is not possible to have precise data on the number of accounts, certificates of deposits, insurance policies, and credit cards that banks have “frozen” or canceled for individuals and organizations regarded by the Ortega-Murillo regime as opposing.

On February 27, Public Record sent emails to BAC Nicaragua, Banpro, BDF, and Lafise Bancentro, as well as the BAC, Banpro, and Lafise branches in Costa Rica, requesting interviews with their officials or at least an explanation for these measures against exiles and deportees.

On March 4, attempts were made to reach the public relations officers of the banks by phone to insist on the request, and in the case of BAC, also to the PR agency working with them, but in none of the cases did they receive a response.

As of the time of this publication, none of the banks had responded to our inquiries.

According to Gonzalo Vila, director of Latin America at the Association of Certified Financial Crime Specialists (ACFCS), a certifying company for anti-money laundering specialists, the Nicaraguan legal framework has many gaps that allow both banks and regulatory bodies to act with discretion.

These measures within the financial system coincide with the use of the entire state apparatus to target real or perceived opponents of the regime.

The report presented by the Group of Human Rights Experts on Nicaragua (GHREN) of the United Nations (UN) in early March recommends that the international community, when evaluating Nicaragua’s compliance with anti-money laundering and terrorist financing standards, consider the Recommendations of the Financial Action Task Force (FATF), applying the principle of doing no harm.

Furthermore, on November 15, 2021, the US Department of the Treasury included the Superintendent of Banks and Other Financial Institutions (Siboif), Luis Ángel Montenegro, on the list of designated individuals.

According to a statement issued by the US Department of the Treasury, in his role as superintendent, Montenegro authorized banks to provide financial information on three high-ranking officials and businessmen who were under investigation under Law 1055.

In addition, in April 2020, he issued regulations derived from the reform of Law 842, the Consumer Protection Law, which prohibits banks in Nicaragua, without a legal reason recognized by Nicaraguan law, from denying financial services to clients, including individuals designated by the US Department of the Treasury.