US Citizens Might Lose Land Ownership in Nicaragua

US citizens who own land in Nicaragua may lose it if the Nicaraguan government expropriates land for its canal project.

View of León, Nicaragua by H Dragon.

The United States is worried that its citizens might lose ownership over lands they purchased in Nicaragua, where President Daniel Ortega’s government is about to expropriate a huge tract of land for the construction of a canal similar to that of Panama’s.

In an interview with local news magazine Confidencial, U.S. Ambassador to Nicaragua, Phyllis Powers, confirmed that American citizens have owned lands on the proposed route of the Nicaraguan canal.

“The canal project requires land expropriation, but how is the government going to do it,” she asked, without indicating whether she would protest Nicaraguan plans to build the canal.

Last year, the US embassy in Nicaragua warned its citizens against purchasing lands in the Central American country, saying that many properties in the country were in dispute. But now it is making it clear that Americans have owned lands there.

Nicaragua has a history of expropriating lands. Between 1979 and 1990, the Sandinista government expropriated approximately 28,000 real properties, many of which are still in dispute or pending resolution by the Nicaraguan government.

“Land title remains unclear in many cases. Although the Nicaraguan government has resolved several thousands of claims by U.S. citizens through compensation or the return of properties, there remain over 100 unresolved historic claims registered with the Embassy,” reads the Embassy statement released last year.

The canal project is expected to uproot about 25,000 people, but the government insists that it can create thousands of jobs for its countrymen and boost the country’s economy.

Though the government has yet to seize a single acre of land, HKND Group, the Chinese company preparing to build the canal, says it will pay market prices for confiscated land. However, a 2013 law authorizing the government to expropriate any land needed for the canal says payments will be based on each property’s assessed tax value, figures that are usually much lower.

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With China’s economy in the doldrums and the stock market experiencing a bloodbath, the Chinese firm may find it hard to line up financing for the $50 billion project. Still unclear is whether the canal will be built, because there seems to be no space for another canal as the Panama Canal is adding a third set of locks to accommodate larger ships.

People living around Lake Nicaragua have been staging protest marches, but the country’s president Daniel Ortega has vowed that he will press ahead with the plan.

Considering its blueprint, the Nicaraguan waterway will be four times longer than the Panamanian Canal and will yield more revenue than its Panamanian counterpart. Hundreds of Chinese laborers are expected to take part in the construction that will run from the Rio Punta Gorda on the Caribbean Coast to Brito on the Pacific.

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