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

TRADE AND COMMERCIAL LAW ASSESSMENT DECEMBER 2004
HONDURAS
If the reform passes the constitutional test, it should bring about salutary change and a new,
responsive electronic registry system. The system should move beyond real property to
encompass guaranties against movable property and other juridical acts, but in its current state
the registry creates a serious stumbling block to any attempt to create a dynamic credit market
engaged in serious risk analysis.
D. SUPPORTING INSTITUTIONS
1. Notaries and Government Institutions
Notaries are repositories of public faith (fe pública) and have exclusive power to certify and
authorize acts where their participation is required by law, including the constitution of many of
the public legal documents that create garantías reales mobiliarias. In Honduras, unlike in other
Latin American countries, there is no limit on the number of lawyers who may become
notaries. 78 Almost any lawyer may be a notary, and any lawyer with a commercial practice is
expected to be. Among the better law firms and lawyers, however, notarial practice occurs at
high levels of competence and the legal requirements are scrupulously adhered to.
2. Professional and Business Associations
Honduras has an official bar association to which lawyers must belong (i.e., the Colegio de
Abogados). It also has several excellent boutique law firms that engage in commercial practice
and a solid core of lawyers educated in the United States or Europe at the top of the profession.
The Colegio, however, because of its popular composition, is not a force for change.
On the other hand, business and industrial organizations seem to be well organized and quite
effective. Among these is the Honduran Council of Private Enterprise, an umbrella organization
with active participation in policy-making. In addition, medium, small, and micro enterprises
have associations. These associations have often been successful in fostering special sources of
credit, funded by government or outside agency donations. A notable association of this type is
Fundación Covelo, 79 which offers loans of up to $20,000 to small and micro enterprises.
E. SOCIAL DYNAMICS
Honduras has various approaches to reform, depending on whom you talk to. Some persons—
principally within the government—are quite specific in their targets for reform and quite intent
in their desire to carry it out. By and large, private professional players in the Honduran credit
market are not very concerned with its reform—although they are quick to recognize its
deficiencies and the barriers it presents to socioeconomic growth in Honduras. Many government
agencies share their attitude. These vested professional classes are precisely the groups most
78 In some countries, the title of notary public designates a lawyer of exceptional capacity and experience in
commercial law and other notarial functions, selected through stiff competition for official designation as a
member of an elite at the top of the profession. In Honduras that is not so, and it appears that the test
administered by the Supreme Court to become a notary is often more political than professional in nature,
according to Honduran lawyers.
79 Fundación Covelo is a nonprofit organization whose mission is to assist and participate in the economic
development of small and micro enterprises in Honduras. See further, www.fcovelo.org.
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