VZCZCXYZ0001
RR RUEHWEB

DE RUEHMU #0544/01 0592217
ZNR UUUUU ZZH
R 282217Z FEB 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 9284
INFO RUEHME/AMEMBASSY MEXICO 4308
RUEHGT/AMEMBASSY GUATEMALA 2210
RUEHTG/AMEMBASSY TEGUCIGALPA 3596
RUEHSN/AMEMBASSY SAN SALVADOR 3863
RUEHBE/AMEMBASSY BELIZE 0020
RUEHSJ/AMEMBASSY SAN JOSE 4954
RUEHZP/AMEMBASSY PANAMA 1878

UNCLAS MANAGUA 000544 
 
SIPDIS 
 
AIDAC 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID PGOV PREL ECON SOCI PINS SNAR NU
 
SUBJECT:  NEW CRIMINAL CODE IN THE BALANCE 
 
REF: MANAGUA 02426 (2006), MANAGUA 01629 (2006), MANAGUA 01530 
 
(2006), MANAGUA 01346 (2006), MANAGUA 01156 (2006), MANAGUA 0742 
(2006) 
 
¶1.   BEGIN SUMMARY:  In January 2007, the new leader of the National 
Assembly's Justice Commission requested USG help to garner approval 
of a draft Criminal Code, created with USAID support, which had 
languished since 2001. The Embassy strongly supports passage as it 
is critical to Nicaragua's investment climate, implementation of 
DR-CAFTA, and its anti-trafficking in persons (TIP) efforts. In an 
uncertain, new political environment, the Code would provide 
improved legal infrastructure to protect trade, investment, property 
and commerce for investors, both national and international. The 
Mission considers the time is now to push for passage, especially 
given the changed political context. If passed as drafted, the 
Criminal Code would give Nicaragua one of the best substantive 
criminal law structures in the region. END SUMMARY. 
¶2. BACKGROUND: Starting in 1998, through USAID, the Embassy 
facilitated a process to enlist all relevant Nicaraguan 
stakeholders, including police, prosecutors, academics, and civil 
society representatives to draft a new Criminal Code for Nicaragua. 
Since 2001, that document has been under review by the National 
Assembly. The draft Criminal Code was unanimously approved in the 
Justice Commission of the National Assembly in 2003, and referred to 
the plenary for a final article-by-article discussion and vote. In 
2004, the Assembly passed Articles 1 to 137. In 2005, because of the 
"pact," the work in the Assembly was blocked. On Feb. 23, 2006, the 
Assembly unanimously passed Articles 138 to 142, and from 150 to 162 
(which correspond to homicides and assaults). 
 
¶3. RECENT SUPPORT FOR THE DRAFT CODE:  In January 2006, the 
government set up a final consultation process and asked for help. 
Based on guidance from the Ambassador, USAID proposed a revalidation 
process with the National Assembly, as it had been two years since 
the Code had been vetted by all justice sector actors, church 
groups, NGO community, law schools, etc. Nicaraguan President 
Enrique Bolaos made passage of the Code a priority for 2006, 
highlighting the legislation in his State of the Republic 
presentation. With the Code's obvious linkages to trade and 
investment, in an August 11, 2006 team meeting, the Ambassador made 
support for the Code, and its passage this legislative session, a 
U.S. Mission priority. 
 
3.1. VALIDATION OF THE DRAFT CODE: Prior to 2005, there were 
extensive, exhaustive consultations on the draft Code with all 
relevant ministries, civil society, parties and religious 
organizations. In the interim, international commitments such as the 
Inter-American Convention Against Corruption and a range of 
international anti-money laundering standards (such as the "40 
Recommendations" and "25 money-laundering criteria" from the G-7 
Financial Action Task Force - FATF), as well as U.S. legislation on 
trafficking in persons, came into force. In this light, USAID 
assisted the Justice Commission to validate the Code. The Commission 
drafted more than 40 motions to improve and update the Criminal 
Code.  Twenty- five of the motions have been approved by the 
National Assembly, covering critical issues such as money 
laundering, anti-corruption, sex crimes and trafficking in persons. 
The 2006 participatory consultation process included representatives 
of the Public Ministry, the Attorney General's Office, the National 
Police and the Banking Superintendent and robust lobbying by civil 
society groups helped ensure adequate sentences for these crimes. 
 
3.2 ABORTION DEBATE DERAILED PASSAGE IN 2006: Despite unanimous 
bipartisan support in the National Assembly's Justice Commission, a 
single provision became a hot potato during the national election 
period. The proposed Code did not touch the abortion issue, leaving 
prior law in place. Prior law criminalized all abortion, except 
where the life of the mother was at risk. Anti-abortion activists, 
supported in particular by the Catholic Church, wanted Nicaraguan 
law to take a strong stand against all abortion, a stand which then 
candidate Daniel Ortega adopted. This debate held up the entire 
Code. In the end, the Code languished, while an amendment to 
existing law passed the Assembly to criminalize all abortion. 
Tragically, the debate about abortion and the politicized process on 
both sides of the issue meant that crimes such as human trafficking 
and money laundering did not get addressed. In the meantime, since 
the elections, according to local press reports, investor confidence 
has been shaken. It is time to get this legislation back on the 
political agenda. 
 
¶4. KEY PROVISIONS: The Code would criminalize theft of intellectual 
property. It would improve prosecutors' ability to deal with alien 
smuggling, trafficking in persons and sex crimes. The Code overhauls 
and upgrades environmental crime law. It clearly sets forth 
conditions for fraud, misuse of funds and other elements of the 
criminal justice system prerequisite to a functioning market 
economy. It fills the void on illicit campaign contributions. 
Perhaps most importantly, the draft unambiguously proscribes money 
laungering as an autonomous, separate crimes, regardless of whether 
the source of the funds laundered arise from narcotics or other 
crimes.  (Loyalists to former president Arnoldo Aleman, serving a 
20-year sentence for embezzlement and money laundering, tried 
unsuccessfully to negotiate a draft whereby money laundering was 
limited only to narcotics - that position continues to be Aleman's 
defense to the charges to date). 
 
¶5. NEXT STEPS: Remaining concerns include extradition to and from 
Nicaragua (since this proposed Code, consistent with the 
Constitution and the Criminal Procedure Code, forbids extradition of 
nationals); punishment for conspiracy to engage in terrorism-related 
offenses; and tolling the statute of limitations in certain cases 
involving public figures who hide behind their official immunity. 
These additional issues will be addressed over the coming year, 
assuming the Code is passed, as complementary measures. 
 
¶6. THE STAKES: CAFTA-DR is a major step toward improving the 
investment climate. However, trade law requires adequate commercial 
law, which in turn needs a solid civil law base. Civil law relies 
very fundamentally on a criminal code responsive to modern needs. 
The current Nicaraguan Code has been largely unchanged for a hundred 
years. Missing this opportunity could mean a setback for addressing 
the investment climate, an opportunity that may not return for 
another decade, as happened in Honduras. There have been years of 
investment in this Code by the Embassy country team. 
 
The Mission considers the time is now to push for passage, 
especially given the changed political context. If passed as 
drafted, the Criminal Code would give Nicaragua one of the best 
substantive criminal law structures in the region. 
 
¶7. CONCLUSIONS: Various justice institutions have adopted the draft 
Code and identify themselves with the product. In doing so, the 
institutions have shown responsibility and a capacity to incorporate 
practical solutions to technical proposals. At their request, USAID 
provided technical assistance to the authorities entrusted with the 
approval of the proposed Criminal Code. Incredibly, despite deep 
political divisions in Nicaragua, the draft Code enjoys near 
unanimous, multipartisan support in the Assembly. The earlier 
drafting and validation processes have involved criminal justice 
system actors, providing from the start an environment for the 
correct implementation of the new legislation, if and when passed. 
The Code would be an outstanding complement to CAFTA-DR, and could 
help Nicaragua maintain its tier 2 status in the annual trafficking 
in persons report. 
 
TRIVELLI