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

TRADE AND COMMERCIAL LAW ASSESSMENT DECEMBER 2004
HONDURAS
XIV. FLOW OF MONEY
A. INTRODUCTION
A significant amount of monetary exchange is involved in cross-border goods and services
transactions—more than $6 billion in goods and services in 2003. Of this amount, exported
goo
services accounted for $1.09 billion; and imported services, for $687 million. Free zones
acc
are a va ent) of the services
xports. Remittances also represent a major trade-related financial flow. In 2003 an estimated
600 million to $800 million poured into Honduras through the remittances of Honduras workers
and families abroad. 175
ds accounted for $1.37 billion, while imported goods accounted for $2.80 billion. Exported
ounted for $560 million (51 percent) of the services exports, which are included because they
lue-added category. Tourism constitutes another $291 million (27 perc
e
$
Overall, Honduran laws, public institutions, and private institutions support these trade-related
money flows. Basic trade finance products are available to all traders. Foreign currency is widely
available and easily exchanged for all traders. However, anything but the shortest term credit can
be very difficult to obtain because of high-risk premiums that reflect serious structural issues,
such as the recovery from the recent bank crisis, little real competition in the financial services
market, a poor judicial system, and little private production capacity.
As are other CAFTA members, Honduras is challenged by illegal money flows. However,
recently, the country has succeeded in pursuing and prosecuting money launderers.
B. LEGAL FRAMEWORK
In Honduras, the basic legal framework related to efficiency and security of basic trade-related
financial flows (i.e., letters of credit, currency exchange) is generally sufficient. However, the
legal framework for credit to assist importing and exporting is inadequate.
1. Legal Operations That Support Trade Facilitation
♦ The Trade Finance Guidelines of the International Chamber of Commerce (ICC) are
generally applied, and the laws are in conformity with the Uniform Customs and practice
for documentary credits.
♦ The legal structure for trade-related finance allows for payment through wire transfers,
foreign checks, commercial letters of credit, standby letters of credit, documentary
collections, and open accounts.
♦ Importers and exporters do not find the legal framework for exchanging payments to be
overly cumbersome or complicated. There are no government restrictions on the
exchange of lempira (Honduras’s official currency).
♦ The legal framework for currency exchange also provides suitable flexibility for traders.
Under the law, traders have the freedom to exchange currency at financial institutions and
non-bank institutions alike.
175 Economic Intelligence Unit (2004), Country Profile for Honduras.
XIV-1