Message to the Congress Reporting on the Economic Sanctions Against Nicaragua

To the Congress of the United States:

I hereby report to the Congress on developments since my last report of April 21, 1989, concerning the national emergency with respect to Nicaragua that was declared in Executive Order No. 12513 of May 1, 1985. In that order, President Reagan prohibited: (1) all imports into the United States of goods and services of Nicaraguan origin; (2) all exports from the United States of goods to or destined for Nicaragua except those destined for the organized democratic resistance; (3) Nicaraguan air carriers from engaging in air transportation to or from points in the United States; and (4) vessels of Nicaraguan registry from entering U.S. ports.

1. The declaration of emergency was made pursuant to the authority vested in the President by the Constitution and laws of the United States, including the International Emergency Economic Powers Act, 50 U.S.C. 1701 et seq., and the National Emergencies Act, 50 U.S.C. 1601, et seq. This report is submitted pursuant to 50 U.S.C. 1641(c) and 1703(c).

2. The Office of Foreign Assets Control (FAC) of the Department of the Treasury issued the Nicaraguan Trade Control Regulations implementing the prohibitions in Executive Order No. 12513, effective May 7, 1985; 50 Fed. Reg. 19890 (May 10, 1985). There have been no amendments to these regulations since my last report.

3. Since my report of April 21, 1989, fewer than 30 applications for licenses have been received with respect to Nicaragua, and the majority of these applications have been granted. Of the licenses issued in this period, some authorized exports for humanitarian purposes, covering donated articles beyond the scope of the exception to the export ban, to assist in the rebuilding of houses and churches that were destroyed by Hurricane Joan in 1988. Certain licenses authorized the export of equipment to La Prensa, the major opposition publication in Nicaragua, as well as to other opposition press groups. A license was also issued to the United Nations that authorized the export of certain equipment for use by the U.N. Observer Mission in verifying the electoral process in Nicaragua.

4. Since my last report, the Department of the Treasury completed two significant enforcement actions. A U.S. organization, which has been engaging in unauthorized imports from Nicaragua in protest of U.S. policies in Central America, agreed to cease its illegal trade activities. This agreement followed issuance of a warning letter sent to the group in March 1988 by the United States Attorney and the execution of a search warrant covering the organization's offices by the U.S. Customs Service.

In April 1989, in the U.S. District Court for the District of Puerto Rico, a U.S. shipowner whose oil tanker had been seized on two separate occasions by the U.S. Customs Service for unauthorized transshipment of aviation fuel to Nicaragua settled a civil forfeiture action against the vessel by paying $125,000, including a $10,000 civil penalty under the regulations.

5. The trade sanctions are an essential element of our policy that seeks a democratic outcome in Nicaragua by diplomatic means. The Sandinista regime made numerous commitments to democratization and national reconciliation when it signed the Esquipulas Agreement in 1987. The Government of Nicaragua reiterated these commitments on February 14, 1989, at Tesoro Beach, El Salvador, and, in addition, promised to hold free, fair, and honest elections in February 1990 under international observation. I do not believe that current conditions in Nicaragua justify lifting the trade sanctions. If Nicaragua fully implements its Esquipulas commitments to democratize; holds free, fair, and honest elections; undertakes genuine national reconciliation; and ends its support for subversion in the region and its close security ties to the Soviet bloc, the emergency that prompted the imposition of the trade sanctions would largely be resolved.

6. The expenses incurred by the Federal Government in the period from May 1, 1989, through November 1, 1989, that are directly attributable to the exercise of powers and authorities conferred by the declaration of the Nicaraguan national emergency are estimated at $197,715, all of which represents wage and salary costs for Federal personnel. Personnel costs were largely centered in the Department of the Treasury (particularly in the Customs Service, as well as in FAC and the Office of the General Counsel), with expenses also incurred by the Department of State and the National Security Council staff.

7. The policies and actions of the Government of Nicaragua continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States. I shall continue to exercise the powers at my disposal to apply economic sanctions against Nicaragua as long as these measures are appropriate and will continue to report periodically to the Congress on expenses and significant developments pursuant to 50 U.S.C. 1641(c) and 1703(c).

George Bush

The White House,

October 25, 1989.