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

TRADE AND COMMERCIAL LAW ASSESSMENT DECEMBER 2004
HONDURAS
lenders tend to provide holdover loans that permit borrowers to survive at their current levels of
operation, but not to expand.
Honduras has begun meaningful reform in the laws controlling collateral guaranties, but there is
some doubt about whether the reform will be permitted to take effect. Through the Property Law,
Ley de Propiedad (LdP), the legislature passed a sweeping reform of the commercial and other
registries, removing them from the administration of the Supreme Court and placing them in a
new Institute of Registries. The legislature also provided for the use of new electronic land-title
registration and a national cadastre. Although all agree that the existing registry suffers from
corruption, delay, and inaccessibility, vested interests threatened by the reforms have mounted
constitutional challenges to the new laws, which knowledgeable observers believe may well be
sustained by the Honduran Supreme Court. 38 Nonetheless, the current administration is drafting
a reform law for collateral guaranties against movable property with the goal of having it in place
within a year. Although the presidential team manifests a sense of urgency and commitment
concerning these reforms, most Hondurans seem indifferent, and some are even resistant to
reform. Interviews conducted for this assessment revealed a common perception that the current
system does not require urgent reform.
Honduras has an inefficient credit market despite the presence of factors that could support a
dynamic, efficient market. Much of the problem seems to stem from custom and practice and the
attitudes that perpetuate them. At least at the executive level, and perhaps at the legislative level,
Honduras seems prepared to push for reforms such as those embodied in model laws such as the
Organization of American States (OAS) Model Law of Secured Transactions (2002), the Model
Inter-American Rules for Electronic Documents and Signatures (2002), and other uniform laws
from United Nations Commission on International Trade Law (UNCITRAL) and United Nations
International Institute for the Unification of Private Law (UNIDROIT) that might harmonize the
laws of the region and even the hemisphere thereby greatly simplifying credit and trade on a
regional, hemispheric, and global basis. Whether the executive initiative can bring about reforms
in both the letter of the law and its application remains to be seen, but such reforms should be
encouraged in every possible way.
B. LEGAL FRAMEWORK
1. Honduras’ Substantive Law on Garantías Reales Mobiliarias
Honduras enjoys a well-drafted and relatively modern Commercial Code (Código de Comercio
Adopted in 1950, the drafters of the Commercial Code included the noted Spanish expatriate
Mexican commercial jurist Joaquín Rodríguez y Rodríguez and the distinguished Honduran
jurist Roberto Ramírez. The Commercial Code does not include a regime for collateral
guaranties that could support a modern credit system. In addition, while the Commercial Code is
54 years old, the Honduran regime for secured transactions in movable property—generically
known in the law as garantías reales mobiliarias—also depends on provisions found in such
fundamental sources as the Civil Code (Código Civil, or “CC”) and the Code of Procedures
(Código de Procedimientos, or “CdPro”), which were promulgated in 1906 as a set.
38
Please note, at the time of this assessment, none of the cases had been decided regarding the constitutionality of
the law.
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