Taiwan reconsiders US$100 million in funds to Nicaragua: local media

Loan to Ortega government withheld for months, Taiwan banks reportedly hesitant to be involved

File Photo: President Daniel Ortega and President Tsai Ing-wen, Jan. 2017

File Photo: President Daniel Ortega and President Tsai Ing-wen, Jan. 2017 (CNA photo)

TAIPEI (Taiwan News) – In February, the governments of Taiwan and its Central American ally, Nicaragua, agreed to a US$100 million loan from Taipei to the faltering government of Daniel Ortega, a move which was widely condemned by critics of Ortega’s increasingly authoritarian socialist government.

However, local media in Nicaragua reports that Taiwan has been reluctant to deliver the funds, suggesting that Taiwan’s government may consider rescinding the financial support for the Ortega administration.

According to Today Nicaragua, the primary reason is a fear of penalties that might result from future U.S. sanctions targeting the country. Despite the fact that no such sanctions have been declared by Washington, and Taipei has legal authority, and some might argue the obligation, to deliver the funds, Taiwanese banks reportedly want nothing to do with the transfer of the US$100 million.

As a result, the transaction has stalled.

Today Nicaragua quotes an anonymous but “official Taiwanese source” in the country.

“No Taiwanese bank wants to be involved in the transferring of funds operation, for fear of being sanctioned by the United States, which has made the disbursement impossible.”

Another anonymous source with knowledge of the state’s diplomatic affairs suggests that Taipei is hesitant to deliver the funds, because it is concerned about the manner in which they may be employed by Ortega’s government.

“It is possible that Taiwan does not intend to disburse anything to avoid getting into trouble with the United States,” said the unnamed source.

The First Secretary of the Taiwan Embassy in Nicaragua, Eva Wei, has denied knowledge of any official government decision to withhold the funds, insisting the issue remains between “Eximbank and the Ministry of Finance of the Republic of Nicaragua.”