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

TRADE AND COMMERCIAL LAW ASSESSMENT DECEMBER 2004
HONDURAS
The Financial Intelligence Unit:
Currently, the FIU is an independent body. However, apparently, the banks seek to have the FIU
placed under the
Public Ministry, which would compromise its independence. In addition, the
banks have been slow to cooperate with the new regime of regulation. Given Honduras’s history
of little banking regulation, it should not be surprising that the banks have not been enthusiastic
about the new regulatory climate. Beyond the normal resistance to regulation and change,
however, the banks surely understand that enforcement of the new regulations will likely result
in a loss of deposits.
The enforcement of Honduras’s money laundering prohibitions and other financial crime laws
presents a mixed picture. Institutional corruption is widespread among the police and the courts.
Banks are resisting new regulation. Meanwhile, a few employees in the Ministry of Security and,
especially, in the Organized Crime Unit of the Public Ministry continue to address corruption. .
3. Supporting Institutions
The Banks:
Historically, Honduran banks have engaged
in practices that have led to many of them to
bankruptcy. Apparently, it was common practice for banks to make “loans” to the family
members of those operating the banks. When these loans were not repaid, which was often the
case, the defaults
threatened the stability of the banks and ultimately forced the closure of a
number of them. Until recent years, no particular law punished such conduct. The one, and
generally
unsuccessful, option for prosecution was for monetary fraud (“estafa”).
A new law regulates a number
of aspects of banking and includes strict guidelines for making
loans. In addition, a newly created Comisión Nacional de Banca y Seguros has broad powers to
regulat e banks. When a bank’s capitalization falls below a certain level and does not increase
above
that level by a specified date, the Comisión has the power to remove the administrators of
the bank and appoint new ones.
Operations
at the Port, Airports, and Borders:
As discussed
more fully in the Trade section, until recently, police were not able to engage in
enforcement efforts against narcotics
and smuggled goods at Puerto Cortez. However, currently,
as a result of an agreement between the port and the police, police can seize illegal goods and
narcotics.
Such seizures should provide information that could expose money laundering.
Police
have no authority at the airport. If they wish to investigate a plane or a passenger, they
must provide 24-hour notice to airport officials. Police also have little authority at the borders.
4.
Social Dynamics
In Ho nduras, as in several other Central American countries, high levels of corruption, together
with narcotics
traffic, facilitates undetected money laundering. More of this money laundering
might be detected if police followed through on drug arrests and looked for the money
laundering connections.
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