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The golden triangulation between Nicolás Maduro and Daniel Ortega is the target behind the latest US sanctions

Nicaragua doubled its gold exports after the US government blocked Venezuelan gold sales.  (Photo Courtesy)
Nicaragua doubled its gold exports after the US government blocked Venezuelan gold sales. (Photo Courtesy)

US sanctions on exports of Prayed in Nicaragua announced this Monday aim to hit the sources of money of the Ortega Murillo dictatorship and the structure to “triangulate” Venezuelan gold, economists say.

The Office of Foreign Assets Control of the United States Department of the Treasury included the government General Directorate of Mines on the sanctioned list, while an executive order signed by President Joe Biden grants authority to this department to sanction other persons linked to the gold sector in Nicaragua and to prohibit US investment in other sectors of the Nicaraguan economy.

Gold exports in Nicaragua have had an unusual growth since 2018. By 2019, the Center for Export Procedures (Cetrex), ranked gold as the third most important item and by 2020 this metal had become in the main export product of Nicaragua.

It may interest you: The United States sanctioned the Nicaraguan Directorate of Mines and an adviser to Daniel Ortega

Nicaragua has revenues of approximately one billion dollars a year from gold exports. Between January and September of this year, gold worth 708.7 million has already been exported according to statistics from Cetrex, a government entity.

In a decade, the country’s gold exports doubled, going from 174,560 ounces (5.4 metric tons) in 2010 to 377,970 ounces (11.7 metric tons) in 2020, according to data from the Nicaraguan Mining Chamber (CAMINIC). The expectations of this Chamber is to reach 500,000 ounces (15.5 metric tons) by 2023.

The American journalist Douglas Farah, a researcher on security and organized crime issues, assures that behind the growth of gold exports in Nicaragua there is a structure created to circumvent the US sanctions against the regime of Nicholas Maduroin Venezuela, as he declared to Diario de las Américas, in April of last year.

“What we see is that a large part of the gold from Venezuela goes to Nicaragua and is exported to the international market as Nicaraguan gold, it is a way to avoid sanctions,” explained the researcher.

“He goes out a lot illegal gold from Venezuela, they send it to Nicaragua and sell it as Nicaraguan gold on the transnational market. There is a lot of relationship, Venezuela does not have the money it had before, it can no longer give away so much, it is not laundering so much money either because the State no longer has so much money to launder,” he added.

According to the journalist, gold represents higher income than oil and drug trafficking and involves less risk.

In March 2019, the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury included the Compañía General de Minería de Venezuela (Minerven) on its sanctioned list, similarly to how this Monday the General Directorate of Mines in Nicaragua was sanctioned.

Nicaragua has income of a billion dollars a year, approximately, from gold exports.  96 percent of the product is sold in the United States.  (Photo file La Prensa)
Nicaragua has income of a billion dollars a year, approximately, from gold exports. 96 percent of the product is sold in the United States. (Photo file La Prensa)

“The sanction goes indirectly against Venezuelans, because it is known that Venezuela triangulates gold through Nicaragua because sales are blocked,” says Nicaraguan sociologist and economist Oscar René Vargas. “Exports doubled without there having been major investments in the gold industry. This increase is given, not by foreign companies, but by this triangulation among the Ortegas. That is why the sanctions

For the director of Open FileJavier Meléndez, these are “the most powerful sanctions that the Biden administration has made against the regime” of Daniel Ortega, and predicts that “Nicaragua will seek to replicate what its strategic partners are doing, as is the case with Venezuela”, to circumvent them .

With these sanctions “they are hitting not only the dictatorship but also Venezuela in its ability to extract gold through Nicaragua,” added Meléndez, in an interview with the program Coffee with Voice.

The United States Department of State assured through a fact sheet published this Tuesday that the measures seek to “demonstrate our commitment to the Nicaraguan people by expanding the tools to hold the Ortega-Murillo regime accountable for its escalation of violations of human rights, the continued dismantling of democratic institutions, attacks on civil society, and increased security cooperation with Russia.”

“Concurrent with this move, the Treasury Department is designating a key Nicaraguan entity that is critical to the mining sector that directly benefits the Ortega-Murillo regime, as well as an individual linked to major human rights abuses in the country”, states the official bulletin.

According to official information published by the newspaper the pressThe United States represents the market for 96 percent of Nicaraguan gold exports. However, Oscar René Vargas considers that the Ortega regime has alternatives where to place Nicaragua’s gold.

“Gold has a large international market. China, India, Switzerland and even Russia are buyers of gold. The market will always be open. If that country is closed, the other countries are going to be open,” she says.

“For me, the strongest thing about an executive order signed by President Biden is that it can be the beginning of a much broader sanctions process against other sectors of the economy, because it leaves that possibility open,” says Vargas. “We would have to see how the mining companies in Nicaragua are going to react.”

Keep reading:

The United States sanctioned the Nicaraguan Directorate of Mines and an adviser to Daniel Ortega
Sanctions against Nicaragua: “The mining sector allowed Ortega and his allies to maintain authoritarian control”

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