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

TRADE AND COMMERCIAL LAW ASSESSMENT DECEMBER 2004
HONDURAS
less following the submission of the initial notification(s).” With a view to convergence with this
Recommended Practice, review periods should be extended.
1. Implementing Institutions
The draft law proposes creation of the Instituto para la Promoción de la Competencia, a body
[desconcentrado] of the President of the Republic, with technical, administrative, and financial
autonomy in its internal affairs and independence in the exercise of its functions. A threemember
directorate would head the Institute for a 4-year period, with each director appointed by
the President of the Republic. 158 The Institute would have exclusive power to initiate and
investigate cases and would have authority to impose a variety of remedies and sanctions.
Investigation and Prosecution
Experience has shown that private complaints are an important information source for
competition agencies in initiating investigations, but it appears that, under the draft law, private
complaints to the Institute are precluded (Article 50). The draft law would benefit from revision
in this respect, allowing private complaints, as well as including provisions that ensure that the
Institute can decline to take action in cases in which there is no injury to the competitive process
or in response to the Institute’s enforcement priorities.
In conducting investigations, experience also makes clear the importance of creating, by statute,
investigational powers that enable the Institute to obtain information essential to identifying
violations of the law. The information gathering articles in the draft law (Articles 48–49) should
be rewritten to provide the Institute with the power to compel the information it needs for
completing its investigations, including the right to compel the production of documents,
interview witnesses and conduct hearings, and inspect corporate records. It is important, if other
provisions of law do not so provide, for these provisions to have sufficient force to create
incentives to comply with the law. Experience in other countries has shown that if the only
sanction for violating such provisions is the payment of small fines, it might be worthwhile to
simply pay the fine as a cost of conducting business rather than to provide the information
needed. Consideration might be given to imposing heavy fines and other penalties on firms
refusing to comply with legitimate requests for information or destroying records to frustrate a
pending investigation.
During the investigation of cases, the Institute will handle a vast amount of confidential
information (e.g., business plans and financial information). The way in which confidential
information is protected is a difficult subject in every competition law. The challenge is to make
the necessary information available to decision-makers and to allow parties to fairly contest a
case without compromising the secrecy of confidential business information. The confidentiality
provisions in Article 34 are vague and apply only to public functionaries. This article should be
158 The nomination of the directors should be done in staggered terms, and this should be explicitly stated in the
law. For example, the draft Nicaraguan competition law provides: “Para el primer periodo de funcionamiento de
La Comisión, se conformará de la siguiente manera: dos comisionados serán nombrados por un periodo de seis
anos; el otro por un periodo de tres anos. Posterior al cumplimiento de este primer período, la renovación de los
comisionados se hará parcialmente cada tres anos es decir, se nombraran dos y un comisionados
sucesivamente.”
IX-4