In response to opening the consulate of the Republic of Nicaragua in the temporarily occupied Crimea, on 2 February 2021 the Parliament of Ukraine for the first time in its history approved sectoral sanctions against the Republic of Nicaragua (“Sectoral Sanctions”).
The Sectoral Sanctions are effective for a period of five years and include, in particular, the following restrictions:
- prohibition of export to and import from Nicaragua of coffee, tea, mate tea, spices, fruits, nuts, tobacco and industrial tobacco substitutes
- full termination of transit of resources, flights and transportation through the territory of Ukraine
- restrictions on the withdrawal of capital from Ukraine
- suspension of the performance of economic and financial obligations
- prohibition of issuing permits, licenses of the National Bank of Ukraine for making investments in the Republic of Nicaragua, and placement of currency values on accounts and deposits in the territory of the Republic of Nicaragua
- termination of issuing permits, licenses for import to Ukraine from the Republic of Nicaragua or export from Ukraine of currency values and restriction of cash withdrawals from payment cards issued by residents of the Republic of Nicaragua
- prohibition of registration by the National Bank of Ukraine of a participant in an international payment system where the payment organization is a resident of the Republic of Nicaragua
- prohibition of transfer of technologies and IP rights to Nicaraguan residents
Since the Sectoral Sanctions have been applied for the first time in Ukraine since the approval of the Law of Ukraine “On Sanctions” No. 1644-VII dated 14 August 2014 (“Sanctions Law”), we anticipate further official clarifications and new enforcement practice from the Ukrainian authorities clarifying the exact scope of the application of the Sectoral Sanctions.
We recommend that Ukrainian residents and foreign companies doing business in Ukraine carefully assess any dealings involving Nicaragua for their compliance with the Ukrainian sanctions restrictions.
Author: Hanna Shtepa.