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

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TRADE AND COMMERCIAL LAW ASSESSMENT DECEMBER 2004 HONDURAS Neither the public nor the private sector in Honduras seems much concerned about the current state of affairs, however. International and regional rules provide a sketchy framework for existing circumstances in which Honduran exports enjoy duty-free entry to major markets while Honduras may tax nonregional imports as it wishes. As free trade agreements expose the internal Honduran market to increased competition from exports, demand for more developed laws and procedures for applying countervailing duties and safeguard measures may emerge. For the time being, however, most Hondurans seem content that gaps and inconsistencies in national legislation will be filled when it becomes necessary to do so. Honduras has laws that support its substantial maquila, or assembly plant, operations. Honduran businesspersons and merchants, like other Central Americans, feel that in recent years China has gained maquila operations by diverting them from established local interests and that it will continue to present stiff competition in the future. C. TARIFF REGIME Honduras applies the Central American Tariff System (Sistema Arancelaria Centroamericano, or SAC), a harmonized classification and duty system for the region that implements a common external tariff, applied ad valorem. Tariff impositions give rise to disputes, which begin within the administrative offices of the customs authority and may be appealed in stages up to the Supreme Court. D. IMPLEMENTING INSTITUTIONS The Honduran Ministry of Commerce and Industry has principal administrative authority for applying tariff laws and duties and other trade laws. E. SUPPORTING INSTITUTIONS Cooperation between the public and private sectors in Honduras is lacking, and there is a paucity of institutions supporting the foreign trade sector. However, the Government of Honduras has taken a first step toward improving this situation by establishing a private-public sector commission, Comisión Especial Interinstitucional para la Modernización del Servicio Aduanero (CEIMSA), similar to the trade facilitation commissions in Guatemala and El Salvador. CEIMSA’s aim is to address modernization of the Customs Service in Honduras. According to newspaper reports and interviews with representatives from the Federation of Customs Brokers (Federación Nacional de Agentes Aduaneros de Honduras, or FENADUANAH), which is participating in CEIMSA, the initial focus of the commission will be combating corruption and undervaluation. CEIMSA has been working on a strategic plan to address these issues. 167 To address undervaluation, the draft strategic plan contemplates that information about all importations into the country, including the declared value, will be published on the Web site of the DEI. The plan also proposes that corruption, as well as inefficiency in Customs, be tackled by depoliticizing the Customs Service, beginning with an evaluation of all customs personnel and the dismissal of those who are not properly qualified for their positions. It is also recognized that modernization of the Customs Service, including improvements to infrastructure, is 167 El Heraldo, Buscan despolitización de las aduanas Hondureñas (August 21, 2004) at http://www.elheraldo.hn/detalle.php?sec=9&fecha=2004-08-21. X-3
TRADE AND COMMERCIAL LAW ASSESSMENT DECEMBER 2004 HONDURAS necessary to meet the country’s obligations as a member of the CACM to complete the Customs Union, as well as to comply with those obligations Honduras has assumed under CAFTA. 168 F. SOCIAL DYNAMICS Many steps remain before Honduras will have a complete legal and administrative structure for its international trade. Within the region, the country lags behind its CACM partners in its general commitment to regional and global free trade and in its general awareness of and response to international trade issues. In addition, Honduras’s foreign trade concerns have focused on promoting and facilitating export operations to the relative exclusion of import controls other than simple tariffs; Honduras has enjoyed GSP privileges in industrialized markets for which it did not have to reciprocate by opening its borders. This flow may change. Both the public and the private sectors may not yet fully realize the extent of the legal and administrative changes that must take place in the foreign trade sector. Honduras has not yet demonstrated the will and capacity to maintain laws, regulations, procedures, infrastructure, controls against corruption and inefficiency, and other elements that define operations in the sector at levels that support the country’s foreign trade. Such changes should become even more necessary as CAFTA takes effect. The legal and institutional and infrastructural frameworks for foreign trade in Honduras generated virtually no concern from government or private sector participants, despite their obvious weakness. G. RECOMMENDATIONS In matters concerning international trade, particularly its laws and its administrative infrastructure, the only appropriate recommendations are quite general: 168 Id. ♦ Encourage the growth of cooperation between the private and the public sectors ♦ Encourage and support reform and increased efficiency and transparency in customs administration and operations ♦ Begin to address the lack of a national legal framework for international trade, taking into consideration that the day will come when significant reforms become necessary, perhaps first in the internal administration and procedures for applying countervailing duties ♦ Consider the possibility of further regionalization to rationalize the administration of international trade laws that depend on economic investigations and judgments by administrative agencies. X-4
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