Trade and Commercial Law Assessment - Honduras - Economic ...

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TRADE AND COMMERCIAL LAW ASSESSMENT DECEMBER 2004 HONDURAS F. RECOMMENDATIONS ♦ Upgrade the professionalism and modernization of the Immigration Agency. The agency should focus on the following key areas: – Assist government in implementing an integrity program, including strengthened independent internal affairs. – Develop a comprehensive personnel system to upgrade candidate qualifications, improve recruitment procedures, and establish job-specific performance and evaluation standards. – Provide training in document examination and investigative and interviewing techniques. ♦ Harmonize and implement a CA-4 immigration visa so that trade-related visitors may enter one country in the region and visit all with appropriate security. ♦ Amend laws to create a streamlined entry process for highly skilled individuals (engineers, doctors, attorneys, etc.). Simplify this process by implementing a one-stop processing center at the most appropriate ministry. This process should include, at a minimum, filing of applications and payments through one agency with a transparent, predictable process for review and determination. Also, eliminate the review requirement for all exiting parties by strengthening risk assessment and enforcement. It should be mandatory for citizens and visitors to “check in,” but departure procedures should be unencumbered and lead to less delays at borders. ♦ Modernize and upgrade automation for people processing at the border. This includes passport readers and networked computers so that borders can— – Electronically exchange people information among border sites and headquarters – Electronically exchange people information with other CAFTA countries – Enhance the risk analysis system and automate risk processes. ♦ Provide training to increase the capacity of Customs officers, especially in the following areas: – Documentation of fraud detection techniques – Customer service – Risk management. XII-5
TRADE AND COMMERCIAL LAW ASSESSMENT DECEMBER 2004 HONDURAS XIII. FINANCIAL CRIMES A. Corruption generates various kinds of financial crimes, including bribery, theft, and money laundering. The money laundering in Honduras, according to the U.S. Drug Enforcement Administration (DEA) country report of 2000, results from a variety of crimes, including drugtraffick ing , auto theft, kidnapping, bank fraud, prostitution, and corruption. Enforcement efforts since 2000 against auto theft, kidnapping, and bank fraud may have altered that mix. The DEA’ s country report of 2000 states, “Honduras is neither a major money laundering center, nor a major offshore financial center.” Operating of offshore financial institutions is prohibited. The report identifies banks, currency exchange houses, and front companies as the locus of money laundering in Honduras. Casinos are also possible avenues for money laundering. Although not a major money laundering location, Honduras has an increasing level of crime— much of which is drug-related—which produces a greater volume of money laundering. The banking sector, which has until recently been largely unregulated, has been one focus for money laundering. Although the economy is weak and the country is not a regional financial center, the banks appear to be prospering. The banking sector, however, has a history of bankruptcies resulting from questionable loans. The As sociated Press has recently reported the possibility of terrorist financing of crime in Hondur as, something that has not surfaced in our previous reports on financial crimes. The Honduran government, as confirmed by the President and Security Minister, is investigating reports that Al Qaeda is financing gangs that control the trafficking in narcotics and arms between Central America and the United States. The network of gangs includes as many as 600,000 persons, compared with a combined total of 200,000 troops in the armed forces of the entire region. 1. INTRODUCTION Legal Framework The Honduran Constitution, adopted in 1982, was amended in 1999 to establish civilian control over the ar med forces. In 1998 the country also established a national police force; previously, the militar y had provided internal security. With Decree No. 202-97, dated December 17, 1997, Honduras first adopted a money and asset laundering law. In 2002 the National Congress reformed this law through Decree No. 45-2002. The new law is tied in to all international conventions ratified by Honduras, specifically the Vienna Convention on Illegal Traffic of Narcotics and Psychotropic Substances and the Panama Convention on Money and Asset Laundering. Decree No. 45-2002 covers all financial institutions and creates an obligation for all to comply with reporting requirements. If financial institutions do not comply, they can be sanctioned. All financial institutions have an officer specifically tasked with meeting reporting requirements. XIII-1
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