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

TRADE AND COMMERCIAL LAW ASSESSMENT DECEMBER 2004
HONDURAS
2.
private sector companies that operate without employ modern standards of corporate
governance. That said, recent policy reforms, including the strengthening of the financial
regulator, have lowered risk premium.
The Central Bank of Honduras manages exchange rate policy and regulation. Its operations
impose no real encumbrances on trade.
a. Central Bank Operations That Support Trade
Facilitation
♦ Currency exchange occurs at numerous institutions, including banks, currency exchanges,
and hotels.
♦ Currency exchange operates at rates
that are highly competitive, and fees for wiring
money abroad are less than 10 percent of the amount of money to be wired.
♦ The dollar
is fairly tradable in the market, although not as widely used as in Nicaragua or
Guatemala.
The national supporting institutions that facilitate trade-related finance are relatively weak.
Honduras has no government-sponsored export credit agency. As noted, Hondurans do receive
benefits from the Central American Bank for Economic Integration. One BCIE program involves
awarding credits to traders for circulating and fixed capital. BCIE
targets economically viable
projects and exporting companies to upgrade regional export capacity.
The main
supporting institution for securing money flows, the Financial Crimes Enforcement
Unit, is working to more effectively address money laundering. It is early in the development of
this capacity, but it appears that the institution is working hard on this critical issue. In 2004 a
number of cases were been brought and won against money launderers. The other institutions
that address illegitimate financial flows, i.e., banks, regulator, and prosecutors, are perceived as
cooperative. E.
Central Bank
♦ The institution has sufficient capacity to administer the exchange rate function.
D. SUPPORTING INSTITUTIONS
SOCIAL DYNAMICS
The soc ial dynamics of trade-related money flows are relatively poor. Lack of access to trade
finance credit is a serious issue in Honduras and receives a good deal of attention at
all levels.
The government, banks, smaller exporters, and potential
traders are all interested in and focused
on the need for change. However, the solutions are difficult
and structural, and the dynamics do
not appear to favor real change in the near term.
The issue
of money laundering also receives attention at many levels. The government has been
working
to improve its capacity to deal with the problem through passage of legislation and
establishment of appropriate institutions and processes. The private sector, in
turn, has been
responsive in implementing its responsibilities, such as know-your-customer regulations.
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