Phytosanitary Controls: Discretion and Abuse

The business sector in Nicaragua believes that the bill under discussion in the Assembly, which empowers the government to fine agricultural producers if they fail to comply with approved phytosanitary standards, has excessive discretion.

Friday, March 6, 2020

A few days ago, a bill called the "Plant Protection Law" was submitted to the National Assembly. This is a legal framework that empowers the Institute of Protection and Health (IPSA) to impose sanctions ranging from $100 to $700 on any producer that does not comply with the requirements at the time the government carries out an inspection.

According to the National Assembly, after a day of consultations with the agricultural, forestry, exporting and importing sectors on March 4, the Environment and Natural Resources Commission together with the Production, Economy and Budget Commission ruled favorably on the Plant Protection Law Initiative.

Guillermo Jacoby, president of the Association of Producers and Exporters of Nicaragua, told Laprensa.com.ni that "... 'The initiative is totally arbitrary in every way, and the problem with the fine that is established is that it is left to the discretion of the IPSA, of the person who carries out the inspection, so when these fines are discretionary, the discretion goes together with the corruption, but in addition they are high fines."

According to article 78 of the bill, when plants or regulated articles that are infected with a pest are traded, fail to comply with phytosanitary requirements, or for failing to declare the entry into the national territory of products of sanitary risk, "... They will be sanctioned with fines of $5,001 to $7,000 ... or with the definitive suspension of the registration or definitive closure of the establishment."

On March 5, the Superior Council of Private Enterprise referred to the issue in a statement, assuring that the proposed project has excessive discretion, since the "... IPSA cannot become judge and party regarding the presentation of complaints 'before the competent authority, due to the probable existence of a crime'. The initiative leaves the organization, structure and functions of the Plant Protection Council to the regulations and therefore to the discretion of the Executive, which could be modified at any time. In addition, it is not clear what criteria are to be used to determine authorized third parties, since they are not subject to regulations allowing the submission of such services".



More on this topic

Controversial Law on Phytosanitary Controls Endorsed

March 2020

The Nicaraguan Assembly approved a bill empowering the Institute of Protection and Health to impose economic sanctions on any agricultural producer who fails to comply with phytosanitary requirements at the time of an inspection.

The business sector considers that the law known as the "Plant Protection Act" has excessive discretion, since the Institute of Protection and Health (IPSA) cannot become judge and party in relation to complaints to the competent authority, because of the probable existence of a crime.

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After last year's sales of grain abroad grew 19% compared to 2017, in the first eight months of 2019 Nicaraguan cocoa exports totaled $5.8 million, 48% more than in the same period of 2018.

Regarding the volume traded, the figures of the Exports Processing Center (Cetrex) that between January and August 2018 and the same period of 2019, the figure increased from 2,433 to 3,405 tons.

Tax Credits: Deadlines for Transfers Change

April 2019

With the approval of the tax reform, in Nicaragua the period for exporting companies to transfer the tax credit to the producer or manufacturer was reduced from three to two months.

At the end of February, the National Assembly approved the amendment to the Tax Concertation Law, which increases from 1% to 3% the income tax of large taxpayers and also shortens the deadline for exporters to transfer the tax credit to producers, which is 1.5% on the value of FOB exports.

Draft Law on Exports Ready

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The Nicaraguan National Assembly could be receiving a draft Law on the Promotion of Exports next week.

This was announced by Jose Adan Aguirre, president of the Superior Council for Private Enterprise of COSEP, who noted that the project aims to streamline procedures for exports and reduce trade barriers on all products the country exports.

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