Financial Crime World

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Financial Institutions’ Role in Preventing Financial Crimes in Honduras: A Report Card

The Financial Action Task Force (FATF) has released its Benin Follow-Up Report 2023, assessing the technical compliance of financial institutions in Honduras with anti-money laundering and combating the financing of terrorism (AML/CFT) regulations. The report card shows that while Honduras has made progress in implementing AML/CFT measures, there are still areas where it falls short.

Risk Assessment and Compliance

In assessing risk and applying a risk-based approach, Honduras is considered “largely compliant” (LC). However, when it comes to national cooperation and coordination, the country also receives an LC rating. Money laundering offense and confiscation and provisional measures are partially compliant (PC), while terrorist financing offense and targeted financial sanctions related to terrorism and terrorist financing receive an LC rating.

Key Findings

  • Honduras’ ratings for non-profit organizations (NC) and financial institution secrecy laws (C) are concerning, indicating a lack of effective measures in place.
  • Customer due diligence and record keeping are PC, but wire transfers and reliance on third parties receive an LC rating.

Areas for Improvement

The report highlights several areas where Honduras needs to improve, including: + Transparency and beneficial ownership of legal persons and arrangements, which are NC + Regulation and supervision of financial institutions and DNFBPs, which are PC + Powers of supervisors and law enforcement authorities, which are C

Conclusion

While Honduras has made some progress in implementing AML/CFT measures, there is still much work to be done to prevent financial crimes. Financial institutions must play a critical role in this effort by ensuring they have adequate controls in place to detect and report suspicious transactions. The Honduran government must also prioritize strengthening its regulatory framework and increasing international cooperation to combat financial crimes.

In summary, Honduras’ financial institutions must take responsibility for preventing financial crimes by implementing robust AML/CFT measures, while the government must work to strengthen its regulatory framework and increase international cooperation to effectively combat these crimes.