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

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.
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