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NATIONAL LEGISLATIVE ASSEMBLY LAW


No. 800

The President of the Republic of Nicaragua informs the people


that the NATIONAL LEGISLATIVE ASSEMBLY has ordered the
following:
LAW OR LEGAL SYSTEM OF THE INTEROCEANIC
NICARAGUA CANAL AND CREATION OF THE ENTITY
KNOWN AS THE NICARAGUA CANAL AUTHORITY.
Chapter 1
Purpose, Public Order, and Nature
Article 1. Purpose
The purpose of this Law is to develop the legal system for the
Interoceanic Canal of Nicaragua and create an entity called
Authority of the Nicaragua Canal. This entity will represent the
Government of the Republic of Nicaragua when incorporating
and constituting a Company for construction and operations of
the Nicaragua Canal.
Art. 2.
Public Order and Supreme National
Interest
For all legal purposes, the Nicaragua Canal project is declared a
priority and supreme national interest, including the
corresponding research, design, construction, and operations.
Nicaragua owns this Interoceanic Canal, whose nature or
purpose will be to operate continually, on a neutral basis,
serving the international community. This law contains general
rules which will be used as the legal framework for the
regulations to be issued, as may be needed, so that this
Interoceanic Nicaragua Canal always provides a continuous,
efficient, and safe service.
Art. 3. Nature
Such Nicaragua Canal Authority is organically, operationally,
administratively, and financially independent, having perpetual
duration. In consequence, this entity shall freely receive, keep,
and assign financial resources, and it may deposit its funds in
banks, as deemed appropriate.
This authorizing entity will be responsible for defining the legal
system and rules of the Nicaraguan Company known as the
Nicaragua Canal Company (Empresa Gran Nacional de El Gran
Canal de Nicaragua) and its corporate structure, by virtue of its
representation and authority; it will negotiate the terms of
reference, operations, and management of the new entity,
including regulations and supervision of rational and sustainable
use of natural resources, environment protection, and
biodiversity in the geographic and influence area in which the
interoceanic canal will be built, within the framework of
international treaties and agreements and national laws.
The Nicaragua Canal Authority will not pay (national or
municipal) taxes, duties, rates, charges, contributions, except for
obligations in labor matters and rates for public services. The
Nicaraguan State or Government will have fifty one percent
(51%) of the Nicaragua Canal Companys full profits received by
the Nicaragua Canal Authority.

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Chapter II
Definitions
Art. 4 Definitions
For the purposes of this Law, here are the meanings of the terms:
a) Geographic Area: This will be described cartographically in
the project, specifying sources of surface and ground waters in
the project area and waters moving toward the East or flowing
into the Interoceanic Nicaragua Canal, including its reservoirs
and lakes.
Management of the geographic area and its natural resources
will be regulated particularly as stated in the regulations to be
enacted for such purpose.
b) Area of Influence: The geographic area in the land planning,
including the lands, forests, and waters described and delimited
in the project, in which only non-polluting-activities may be
developed. Such activities should be compatible with operations
in the Nicaragua Canal.
c) Authority of the Interoceanic Nicaragua Canal: This is an
entity or level representing the Nicaraguan Government or State,
and it is in charge of overseeing the conservation, maintenance,
improvement, and modernization of the Nicaragua Canal. This
entity is a body incorporated and organized under this Law, with
its own net assets and indefinite duration. This entity has full
capacity to acquire rights and make contracts, and it will be
responsible for promoting, coordinating, overseeing, regulating,
and governing all related matters in the geographic area for
construction and operations of the Nicaragua Canal.
d) The Interoceanic Nicaragua Canal, which in this Law may
also be called The Nicaragua Canal, will be built as an
interoceanic transit route or waterways for ships in different
sizes. This Canal includes waterways with docks, anchorages,
moorings, and approach waterways; lands and maritime waters,
lake and river waters, islands, the continental shelf, and maritime
space to be used by the Nicaragua Canal, including floodgates,
auxiliary dams, power-generation plants, dikes, and structures to
control waters and auxiliary vessel or related facilities for
operations in the Nicaragua Canal. This includes all those
activities and areas required to protect the environment in the
area of influenceof the Nicaragua Canaland all the economic
activities and related services provided in such economic zone
and the Canal.
e) Nicaragua Canal Company (Empresa Gran Nacional de el
Gran Canal de Nicaragua): It is a commercial Company
organized under national or international legal provisions in force,
with the necessary capacity to acquire rights and bind itself. This
may be called the Great Nicaraguan Company (Empresa Gran
Nacional de Nicaragua), which builds and operates The
Nicaragua Canal, having permits and under the regulation of the
Interoceanic Nicaragua Canal Authority.
f) Related Services: Ships or boats are provided with services for
navigation through the Nicaragua Canal. There is a safe transit,
safeguarding the marine environment and other operation-related

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services, for example, international business involving economic,


banking, financial activities, insurance, tourism, cruisers,
submarine communications, and selling or provision of services to
ships in transit, the transshipment cargo to terminal and adjacent
ports, as well as repairs and maintenance of ships, set-up and
operation of a Duty-Free Zone and all derived activities involved.
g) Indigenous and Ethnic Territory: The geographic space
including the habitat of indigenous or ethnic communities which
make up a society in which they develop, according to their habits
and traditions.
h) Economic Zone: The area around the Canal in which every
infrastructure and economic activity may only be implemented
provided that there is a permit and under the regulations of the
Nicaragua Canal Authority.

Chapter III
Nicaragua Canal Authority
Art. 5. Incorporation, name, domicile, and duration. Thus,
create the Nicaragua Canal Authority, with legal capacity, its
own net assets, for indefinite duration, and with full capacity to
acquire rights and bind itself and enter into agreement; this
authority is organized in accordance with this Law, with
registered office in the city of Managua; and it may be set up
and have operations anywhere in the national territory.
The net assets of the Nicaragua Canal Authority will include all
the contributions received of the concession granted by the
Nicaraguan Government, including cooperation and donations.
To fulfill its duties, this Institution known as the Nicaragua Canal
Authority will enjoy functional, organic, financial, and
administrative autonomy, setting the standards for organization
and operations that will enable efficient promotion, supervision,
and financial management of the net assets of the Republic of
Nicaragua in the Nicaragua Canal Company, including related
activities and services in accordance with the constitutional laws
and rules in force.
Before the Nicaragua Canal Company is incorporated, the
Nicaragua Canal Authority originally will get funds from
donations or creditcharging pre-investment expenses. Such
Authority will negotiate with the Nicaragua Canal so that the
latter covers such expenses later. This will also apply for its
budget purposes while the Nicaragua Canal is under
construction. After this, a percentage fee will be set, it will come
from income on account of services to be provided. This will be
negotiated with the company in charge of canal operations.

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conservation and protection of Lake Nicaragua (Gran Lago),


which is one of the countrys invaluable assets. This will be done
by implementing the technical and environmental measures to
prevent pollution, keeping its water clean in a sustainable
manner;
e) To fulfill the provisions in this Law and other provisions
applicable to operations of the Nicaragua Canal.
Likewise, this will ensure that the Nicaragua Canal is always
open for peaceful and uninterrupted traffic of ships of every
country, without any discrimination whatsoever, according to the
conditions and requirements stated in the Political Constitution of
the Republic of Nicaragua, international treaties, this Law and
Regulations. This is an international service provided by the
Nicaragua Canal, and its operations may not be interrupted for
any reason.

Art. 7. Appointment
The citizens, who on behalf of and representing the State of
Nicaragua play a role in the Management of the Nicaragua Canal
Authority, will be appointed by the President of the Republic.
Regarding the appointment of the Chairperson of the Nicaragua
Canal Authority, such appointment shall be ratified by the
National Legislative Assembly, before holding such position.
For the first time the Board of Directors in this entity will be
appointed for the period including the construction works,
provided that such construction takes less than ten years lasts.

Art. 8 Performing Legal Acts and Making Agreements


To achieve objectives and purposes, the Nicaragua Canal
Authority, as an institution, may acquire rights, carry out and
formalize all legal acts and civil or commercial agreements, as
may be required, appropriate, causal or incidental.
The Interoceanic Nicaragua Canal Authority must have an
adequate technical-administrative organization that will fulfill
duties. To this end, its own bylaws will be drafted, being
consistent with the Regulations to this Law.

Art. 9. Functions or Duties


The Nicaragua Canal Authority will fulfill duties, as follows:
a) To check and oversee the construction and operations of the
Nicaragua Canal and related services;
b) To use in a sustainable manner the natural resources in the
area of influence of the Nicaragua Canal; to develop and provide
services as planned in a sustained and orderly manner;

Art. 6. Objectives of the Nicaragua Canal Authority


The Interoceanic Nicaragua Canal will have the following
objectives:
a) To promote and create the Nicaragua Canal Company;
b) To manage and try to get investment required to incorporate
such Company;
c) To supervise every phase of study, construction, and
operation of the Nicaragua Canal, setting standards and
regulations in order to oversee and supervise everything
concerning this project;
d) To watch over, on a permanent basis, particularly the

c) To supervise and check, regularly and systematically, the


facilities and structures of the Nicaragua Canal, and the
Nicaragua Canal Company must write reports regarding fulfillment
of obligations, as required by such Authority;
d) To protect the supreme national interests of the State of
Nicaragua, representing the Government in every matter
concerning the Nicaragua Canal;
e) To participate in drafting up the regulation or required technical
standards relating to maritime protection, navigation, prevention,
and fight against pollution of the marine environment, health, and
prevention of infectious-communicable diseases, and response to
emergency situations;

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f) To set the standards and requirements, along with the


Nicaragua Canal Company, for security regarding proper
protection and surveillance of the Nicaragua Canal facilities,
having coordination with the Nicaraguan Army, National Police,
and other institutions, and competent government officials,
who should help as required;
g) To participate in planning, generation, use, and
conservation of water resources, soil, flora and fauna species
in the water basin of the Nicaragua Canal, overseeing
management and maintenance;
h) To participate in managing the geographic area and the
area of influence; to authorize permissible activities; and forbid
or restrict incompatible activities;
i) Based on specialized studies, to determine the properties
that will be affected by building the Nicaragua Canal; this will
be done in accordance with the Political Constitution of the
Republic of Nicaragua and laws in force; and
j) To create the conditions required for technical and
professional training of staff that will build and operate the
Nicaragua Canal, in coordination with universities and the
Ministry of Education.
All of this applies without prejudice to the other duties, as
provided in the Regulations to this Law.

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b) To preside over sessions, leading and moderating in the


debates; and
c) If there is a tie, the Board President will have a
casting vote.
When the Board President is absent, the Board Vice-President
will perform the Presidents duties in meetings; this will also
apply in the case of the Presidents inability or lack of capacity.
Art. 12. Duties of Board Directors.
These are the duties of the Members in the Board of Directors:
a) To exercise the right to vote and justify its particular voting, by
stating the sense and reason for explanation purposes or
justification;
b) To ask questions and get the exact information required to
fulfill the duties assigned; and
c) Other duties concomitant to his position, including other duties
as stated in the Regulations to this Law.

Art. l3. Sessions or Meetings


The meetings will be notified in writing seven days before they
take place. Holding meetings will require a quorum including four
of its members. Resolutions or decisions will require a favorable
vote of a simple majority of those present.
Art. 14. Executive Duties of the Board President

Chapter IV Management
and Administration
Art. 10. Management
The Management of the Nicaragua Canal Authority will include
a Board of Directors made up of members and presided by a
President, as a Minister of State; the Vice-President will be the
Minister of the Environment and Natural Resources; the
Secretary will be the Minister of Finance; and three Directors
will be: The Delegate of the Presidency of the Republic in the
Commission for Development of Ro San Juan; the Presidential
Delegate for Foreign Trade Investment Promotion, and the
Secretary for the Atlantic Coast Development of the
Presidency of the Republic.
The first Board of Directors will be set up in accordance with
this Law, and it shall represent the stocks or shares of the
Nicaraguan Government in the Nicaragua Canal Company.
The Board of Directors of the Nicaragua Canal Authority will be
responsible for approving and promoting the representations of
the Authority in national or international partnerships or
corporations, which may be private, state-owned, or mixed
ones, in which the Authority, as a member or partner, is holding
stocks.

Art. 11. Powers of the Board President


The Board President of the Interoceanic Nicaragua Canal
Authority will have the following powers:

The President will have the following executive duties:


a) With power of attorney for management, to act legally
representing such institution in accordance with the restraints
stated in the Law, concerning judicial, out-of-court, and
administrative matters;
b) To represent, nationally and internationally, the Interoceanic
Nicaragua Canal Authority;
c) He/she may make proposals for standards to Board. Once
proposals have been approved, standards will be implemented in
the area of influence and economic zone of the Nicaragua Canal;
d) To manage, coordinate, and supervise operations of this
Institution;
e) To set the service rates provided, as approved by the Board of
Directors;
f) To grant judicial and special powers, approved by the Board;
g) To determine the administrative structure of the Nicaragua
Canal Authority; and
h) To keep the Board of Directors informed about relevant
matters, suggesting applicable measures and resolutions for the
Board to carry out his duties.
All of the above without prejudice to the other duties as stated in
the Regulations to this Law.

a) To call regular or special meetings, as may be needed, or if


any of its members asks for such meetings;

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Chapter V Obligations of the Nicaragua Canal Authority


Art. 15. Purpose
The Nicaragua Canal Authority
must create, organize,
structure, and incorporate a mixedpublic and private
Company, offering and promoting in its investment project a
number of stocks to be issued, the amount of each stock or
share and the total cost of the Nicaragua Canal construction
project. This lets the Nicaraguan Government, as owner, keep
fifty one percent (51%) of the shares of the Nicaragua Canal
Company, fulfilling the regulations set forth in this Law and the
legal system of Nicaragua, ensuring fulfillment of national and
international standards in force.

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approved by Decree. No. 5934 of the Legislature, published in


La Gaceta, Official Government Daily, No. 105 dated May 6,
2010. This is required to obtain the corresponding permits.
Art. 21. Environmental Protection
The development and operations of the Nicaragua Canal project
must be subject to the main principles of environmental
protection, observing mainly conservation and precautionary
criteria. This means adoption of necessary and preventive
measures in every activity that may affect the environment, for
instance, reforestation, conservation of the basin, preservation,
conservation, and management of flora and fauna, etc.

Art. 16. Shares


Specific characteristics and rights of both these shares and
others offer to potential partners shall be subject to the
Regulations to this Law, by the President of the Republic and
according to the negotiations with the Nicaragua Canal
Authority and partners.

Art. 22. Environmental Management


Proper management in operations the Nicaragua Canal must
contribute to conservation, restoration, and improvement of the
environment in Nicaragua, including development and
environmental control programs according to national and
international Laws, Standards, Treaties, and Agreement ratified
by Nicaragua.

VI Chapter
Government Permits, Design, Construction, and
Operations of the Interoceanic Nicaragua Canal

Art. 23. Risk Management


Construction and operations of the Nicaragua Canal must take
place by following strict procedures to identify, assess, analyze,
prevent, minimize, and eliminate or reduce the risks that may
arise as a consequence of natural threats and vulnerability.

Art. 17. Authorization


The Nicaragua Canal Authority representing the Nicaraguan
Government is hereby authorized, in accordance with the
conditions set forth in this Law, to give the permits required to
conduct studies, design, construction, and operations of the
Nicaragua Canal, in coordination with the competent
authorities.
Art. 18. Permits
Permits may only be granted to a person with legal capacity,
public or private, commercial, national, international, or mixed
capital with the required capacity to acquire rights and bind
itself, and with eligibility, management, and financial capacity
as required by this project.
Art. 19. Exclusivity Rights
Permits may confer exclusive rights on the construction and
operations of the Nicaragua Canal, including research on
technical, financial, environmental viability concerning its
design, construction, management, equipment, operations,
maintenance, and improvement.

Chapter VII
Environmental
Management
Art. 20. Environmental Impact Study
Before starting the Nicaragua Canal Project, the Authority
created as stated in this Law must ensure an environmental
impact study, fulfilling the provisions and environmental
protection standards set forth in the applicable national laws
and international standards.
Care must be taken, particularly for the fulfillment of national
provisions and international agreements on traffic of hazardous
waste and toxic substances and the Agreement on Affairs of
Indigenous Peoples and Tribes in Independent Countries,

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Art. 24. Climate Change and Climatic Variability


The Nicaragua Canal Authority shall, during such study,
construction and operations, develop capacities to adapt to risks
posed by future climate change, including those risks derived by
climatic variability. Also, this Authority will ensure fulfillment of
national, regional, and international agreements to climate
change, in regard to the emission of greenhouse gases relating
to traffic by sea.
Art. 25. Special Conservation System
The Nicaragua Canal, its basins, and surrounding territories
because of the water in such places contribute to the water
supply, they will be subject to an especial conservation system for
their management. This means that the countrys authorities will
keep track and oversee such specially protected area, by
following the applicable regulation.

Art. 26. Land Planning and Sustainable Management


The Company will ensure the investments required for
organization and sustainable management of the territory, for
example, changes in the use of the soil, forestry recovery, soil
protection, construction works, and facilities that ensure refill of
the currents and aquifers or water-bearing areas in the Nicaragua
Canal.
Art. 27. Environmental Impact
An environmental impact caused by nature may be prevented,
and it must be compensated or mitigated by means of permanent
conservation programs, developing ecosystems in the areas near
the Nicaragua Canal, insuring restoration of the ecosystems that
were affected.

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Art. 28. Obligations Stated in Environmental Permit


The obligations contained in an environmental permit must be
fulfilled by people who get such environmental permit.
In case of environmental permits on Indigenous Territories
being affected, there will be a prior free consultation where
people are informed, in accordance with Agreement on Affairs
of Indigenous Peoples and Tribes in Independent Countries.

Chapter VIII
Property of the Route and Procedures for
Acquisitions of Private and Communal
areas

Art. 29. Public Property


The Nicaragua Canal and neighboring areas required for its
operations shall be declared property owned by the
Nicaraguan Government or State.
Art. 30. Nations Natural Heritage or Resources
The areas around the Nicaragua Canal will be natural heritage
of this Country, and they are unseizable. Such lands may not
be sold; there is no land tax and the use of such lands may not
prevent, hinder, or restrict operations of the Nicaragua Canal.
Art. 31. Declared in the Public Interest
In accordance with this Law, the Nicaraguan Political
Constitution, and for the purposes of expropriation, real estate
or rights concerning the aforementioned private or communal
propertyas described in the geographic zone of the
Nicaragua Canal constructionare declared in the public
interest.
Art. 32. Compensations
As for the areas to be expropriated, compensations will be paid
by the Nicaragua Government. The amount to be paid will be
according to the Political Constitution of the Republic of
Nicaragua and the applicable law, within the terms agreed by
the parties, in each case. The maximum term is ten years.
Art. 33. Declaration or Ruling
The Interoceanic Nicaragua Canal Authority will be the only
authorized public entity in charge of declaring areas in the
public interest, specifying the affected areas.
Art. 34. Agreements
The Nicaragua Canal Authority may summon the owners with
affected properties to reach an agreement. Consequently,
there will be a Public Document and the corresponding
Certificate or Affidavit that will be registered in the Book of
Registry Deeds.
In case of affected territories of indigenous population,
procedures will be followed accordingly to old customs and in
coordination with the Governments of the respective
Indigenous Territories.
Art. 35. Judicial Procedure
If there is no settlement or arrangement, the Nicaragua
Canal Authority will proceed to start a lawsuit
according to the applicable law in this respect.

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Art. 36. Benefits


In this space, area of influence, and economic zone of
Nicaragua, the Nicaragua Canal Authority will implement
development and civil works, social improvements favorable to
the communities in these areas. There will be free consultation,
informing indigenous and ethnic authorities in the regions and
territories to be affected.

Art. 37. Authorization to Conduct Studies


Owners or those holding properties along the possible routes
or ways will be required to allow for preliminary works to collect
needed data or earlier studies before expropriation, as stated
in the laws in this respect.

Chapter IX
Security and Defense
Art. 38. Security
In the drawings or plans for construction and equipment, proper
facilities shall be included to fulfill the missions of the Nicaraguan
Army and the National Police. These facilities will include units,
port captain's office, docking stations, police stations, and others,
which will be defined together. These facilities or institutions will
have the necessary means for their operations.
Art. 39. Defense
The Nicaraguan Government, through the Nicaraguan Army, will
be exclusively responsible for the maritime protection, defense,
and security of the Nicaragua Canal, including physical facilities,
waterways, and maritime areas, as well as security when
navigating without interference.
The Nicaraguan Government, through the National Police,
ensures exclusively the internal public order, citizen security,
crime prevention and prosecution of criminals everywhere in the
Nicaragua Canal.
Art. 40. Protection and Surveillance (Security)
The Nicaragua Canal Authority is primarily responsible for
supplying whatever is needed to assure proper protection and
security in the facilities of the Nicaragua Canal, ensuring safe
navigation without interference. It will set rules for access at the
facilities in the canal, its waters and banks; it will point
restrictions in the use of lands and waters for operational or
administrative purposes; and on the whole, it will ensure security
of people, ships, and goods under its responsibility. Everything is
done in coordination with the countrys competent authorities.

Chapter X
Special Economic Zone
Art. 41. Special Economic Zone
Because of this international public service, the Nicaragua Canal
route and the neighboring zones to be determined, will be
considered economic zones and under special regulations, in
order to provide an expeditious transit service, without ships
delayed in the national territory and operations of the Nicaragua
Canal.
Art. 42. Exemptions
Ships, cargo, passengers, and crews going through the

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Nicaragua Canal will be exempt from paying Nicaraguan taxes,


duties or burden. Likewise, passengers and crew will not follow
regulations and migration control procedures, unless they want
to enter this countryNicaragua.
Art. 43. Economic Activities
The Nicaragua Canal Authority will determine the economic
activities that may be carried out in the special economic zone,
as well as the applicable regulations to every activity. This
shall be done in coordination with the competent authorities as
the case may be.

Chapter XI Transitional and Final Provisions

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Issued the city of Managua, in the meeting hall of the National


rd
Legislative Assembly of the Republic of Nicaragua, on this 3
day of July, 2012. Ing. Rene Nez Tllez, President of
National Legislative Assembly (Legislature). Lic. Alba Palacios
Benavidez, Secretary of the National Legislative Assembly.
Thus, this is hereby a Law of the Republic. Publish and
execute it. Managua, July 6, 2012. Daniel Ortega Saavedra,
President of the Republic of Nicaragua.

END OF DOCUMENT
--------------------------------

Art. 44. Exemption


The natural resources in the geographic area of the Nicaragua
Canal and its area of influence, as a specially protected area,
will not be ruled by the current system governing the rest of the
country.
Art. 45. Expired concessions
Where there are incompatible processes involved in the
operations of the Nicaragua Canal, the concessions granted
for exploration or exploitation of natural resources or those
granted earlier by special or local laws, which overlap or
coincide superficially in regard to areas defined in this Canal
project, may be revoked by means of the applicable procedure
herein this law, in whole or in part or restricted in its
application.
Art. 46. Derogations or Repealing the Following
The following provisions are repealed:
1) Presidential Agreement No. 68-98, published in La Gaceta,
Official Government Daily, No. 63 of April 1, 1998.
2) Presidential Agreement No. 436-99, published in La Gaceta,
Official Government Daily, No. 9 of January 13, 2000.
3) Presidential Agreement No. 160-2002, published in La
Gaceta, Official Government Daily, No. 57 of March 22, 2002.
4) Appendix 1 of Record No. 6, published in La Gaceta,
Official Government Daily, No. 231 of December 5, 2001.
5) Decree No. 2878 of the Legislature, published in La
Gaceta, Official Government Daily, No. 91 of May 16, 2001.
6) Decree No. 2879 of the Legislature, published in La
Gaceta, Official Government Daily, No. 91 of May 16, 200 l.
Since this is a Nicaraguan Law concerning the nations public
interest; any other Law or provision that, expressly or tacitly,
contravenes or modifies this documentLaw 800shall be
revoked or modified.
Art. 47. Regulations
The Executive Power will enact Regulations to this Law; this
will be done as stated in number 10) of Article 150 in the
Political Constitution of the Republic of Nicaragua.
Art. 48. Law in Force
This Law shall come into force upon its publication in La
Gaceta. Official government daily.

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