Nicaragua taxes Esso $3 million, embargoes assets

Nicaragua's vice-president has ordered Esso Standard Oil to pay $3 million in taxes on allegedly undeclared oil imports, while a judge has embargoed the company's assets.

Eric Watkins
Senior Correspondent

LOS ANGELES, Aug. 23 -- Nicaragua's vice-president has ordered Esso Standard Oil to pay $3 million in taxes on allegedly undeclared oil imports, while a judge has embargoed the company's assets.

Vice-President Jaime Morales Carazo said transnational companies are not exempt from paying such taxes, a claim Esso denies. Esso spokesman Alfredo Fernandez said the company owes no taxes because the importation of oil into Nicaragua is tax-exempt by national law.

The Superior Council of Private Business sent a letter to Nicaraguan President Daniel Ortega saying that the tax claim and embargo "could damage the image of his government and the nation, which needs so much investment."

The US Embassy in Nicaragua said the move has the potential to seriously damage economic relations between the US and Nicaragua.

Ortega has been negotiating with Venezuela President Hugo Chavez to import and refine Venezuelan crude oil. Last month, Chavez and Ortega launched construction of a 150,000 b/d refinery in Piedras Blancas, near Nicaragua's Pacific coast (OGJ Online, July 23, 2007).

Contact Eric Watkins at hippalus@yahoo.com.

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