DGI upholds “guillotine” against banned NGOs in Nicaragua

The General Revenue Directorate (DGI) in Nicaragua has refused to extend a “certification of fiscal solvency” to the NGOs that the National Assembly or Interior Ministry have closed in the last few months. Without this certification, these non-profit organizations can’t comply with the requirements for their definitive closure.

Independent attorneys warn that this hindrance opens the possibility that the dictatorship of Daniel Ortega and Rosario Murillo could accuse those on the NGOs Boards of criminal behavior, out of political vengeance. Before many of these organizations were cancelled, the Interior Ministry had refused to receive their financial declarations; this obstacle later served as the regime’s argument for annulling their right to operate [because they hadn’t turned in the necessary paperwork].

Among possible crimes the Executive Boards of the cancelled NGOs could be accused of are: tax evasion, misappropriation of funds, mismanagement, and embezzling.

In these nine months of 2022, the regime, working through the National Assembly and the Interior Ministry, has shuttered 2,007 NGOs in Nicaragua.

A number of these organization have attempted to settle their commitments with the government institutions and complete the closing process mandated by the Interior Ministry. Now, they’ve hit a new obstacle with the DGI : the internal revenue agency refuses to reopen the NGOs permission to use the DGI website, so they can file their taxes and receive the required  certificate of fiscal solvency.

Former NGO workers tell of new barriers in the DGI

“Teresa” [assumed name] worked in an environmental organization that was closed last April. Following the National Assembly’s annulment of the organization, the administrative staff prepared their financial reports and began the process of definitive closure. They asked the National Technological Institute and the Nicaraguan Social Security Office to cancel their active status, and that was done. However the entire process then got stalled in the DGI.

“Before we even showed up on the lists [of organizations losing their legal status], the DGI had already blocked us in their system,” Teresa commented. They thought it was a “mistake” and reported it in a letter, but received no response.

Finally, they told the DGI that their NGO had been annulled, and that they needed to file their tax declarations to obtain the certificate of fiscal solvency that the Interior Ministry asked them to present. However, an employee told them they had to wait, because “she didn’t know” when they’d be opening a “user’s window”, which is where tax reports can be filed online.

“Karla” (not real name) is in a similar situation. She was working in an organization in the north of Nicaragua that advocated for women’s rights. “We’re facing a serious sticking point with the Internal Revenue Office, because since our closure [via a decree in the legislature] they haven’t allowed us access to the site,” she stated.

Karla’s organization turned in their closing financial reports, but the DGI then asked them for the registries from the previous year. They’ve attempted to deliver these on two occasions, but the process continues mired in confusion.

“The Internal Revenue office hasn’t offered us any explanation regarding why they won’t let us complete the closure process. They just ask you for documents: information on all the tax holdings, from the tax declarations we’ve made since 2020,” Karla described.

That same pattern was repeated with the organization where “Karina” worked, dedicated to supporting patients with chronic diseases in the north of the country. They haven’t been able to transmit their definitive closure because they’re blocked from the online site. “They completely eliminated us from the DGI,” she expressed.

Of the over 2,000 organizations that have been closed until now, it’s not clear how many are in the same situation. Many of the former board members are reluctant to speak with the press, fearing reprisals from the regime. Other associations simply decided not to attempt any kind of formal closure after their legal status was canceled.

Nonetheless, the three sources consulted affirmed they know of several other associations that face the same problems, but don’t want to publicly denounce their difficulties.

DGI “part of a strategy” against the NGOs

Attorney Juan Diego Barbarena believes it’s important to consider these impediments the NGOs are facing. He fears they could be part of a “posterior strategy on the part of the Ortega-Murillo regime, to further delegitimize civil society, now claiming they were operating in an unlawful manner, for purposes of money laundering, or to commit acts that were damaging to the Revenue Directorate.

Such a strategy would be similar to that implemented to justify the closure of the organizations. On more than one occasion, the deputies stated that their [closure] motions were due to recommendations from the International Financial Action Group. Now they can say they’re proceeding “with criminal action against their members” under this same logic, Barbarena explained.

Karla is unaware what repercussions could ensue from the fact that the organization’s formal closure remains inconclusive. She doesn’t discount the possibility that the situation could be utilized against them by the government: “Anything could happen, given the (defenseless) state we’re in,” the activist expressed.

Barbarena explained that according to the law, the anulled organizations couldn’t face any great problems, because they no longer exist legally. As a result, “there’s no way they could legally proceed with a demand against the [former] non-profit organization.” However, since their closure process with the DGI has been left in the air, that could lead to possible “criminal accusations” [against the Executive Boards], given the reality of the country.

Another lawyer who agreed to speak with Confidencial under promise of anonymity believed that the NGOs should file an appeal of unconstitutionality against the cancellation of their legal status. Seeing that their attempts to legally close have been blocked by the DGI or any other State institution, they should note this in the legal petition.

Like Barbarena, this attorney warned that the organizations run risks by leaving the closure process pending in any of the related entities. The DGI could file a debt, and eventually accuse the NGOs of crimes against the Internal Revenue office.

Interior Ministry washes its hands of the NGOs

With no options to battle the DGI, Teresa went to the Interior Ministry (Migob) and explained that they had all their closure certificates from the State institutions, but lacked the tax closure, because they refused to allow them user access.

Migob responded that without the certificate of fiscal solvency from the DGI they couldn’t receive their final documentation. At the same time, they asked them to present a notarized statement indicating that the NGOs patrimony would be passed to the State, a clear attempt to “legalize turning over our assets, so as not to appear that they were being effectively ripped away,” Teresa expressed.

The organization used to rent out office space, but they had their tenants abandoned their spaces quickly, for fear that they, too, could be affected.  This has happened to other foundations whose sites were occupied by the police. The only patrimony left to Teresa’s NGO was a 1.74-acre farm, which to date hasn’t been affected although they no longer have private guards there.

The lawyer that advises Teresa’s environmental organization recommended that she not abandon the process, to avoid any kind of reprisals in the near or distant future.

“Here, we don’t even know what could happen tomorrow. We’re completely uncertain. You don’t know if remaining with arms crossed is good or bad. In the end, it means continuing a never-ending flood of papers,” she concluded hopelessly.

This article was originally published in Spanish in Confidencial and translated by Havana Times