Nicaragua embargoes Esso assets in tax dispute

 @ibtimes on August 22 2007 9:07 AM

A Nicaraguan judge has embargoed assets of U.S. oil company Esso Standard Oil in a tax payment dispute between the government of leftist President Daniel Ortega and the unit of giant ExxonMobil Corp, a government aide said on Tuesday.

For the first time, the (Nicaraguan) state is asking the big companies to account for themselves, said Ortega aide Bayardo Arce.

Nicaragua is demanding the payment of $2.9 million in taxes, Foreign Minister Samuel Santos said. Texas-based ExxonMobil was not immediately available for comment.

The U.S. Embassy in the Central American nation criticized the move, the first such action against a U.S. company since former Marxist guerrilla Ortega returned to power in January.

This action by Nicaraguan authorities has the potential to seriously damage economic relations between the United States and Nicaragua. It also has the potential of damaging Nicaragua's foreign investment climate, the embassy said in a statement.

Ortega, a Cold War veteran and former U.S. foe, has said he wants good relations with Washington.

But he is remembered for having confiscated private property after the Sandinista revolution that took him to power for the first time in 1979.

Join the Discussion