Financial Crime World

Enhanced Follow-Up Report: Honduras’ Implementation of Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Recommendations

Executive Summary Honduras has made progress in implementing AML/CFT regulations, but some deficiencies remain. This report highlights key areas where Honduras needs to improve its compliance with international standards.

Recommendations for Improvement

Obligations of Banks and Non-Bank Financial Institutions

  • Establish a clear and effective framework for financial institutions to identify and report suspicious transactions.
  • Improve the Financial Intelligence Unit’s (FIU) power to provide feedback to reporting institutions (RIs).
  • Enhance customer due diligence requirements to prevent money laundering and terrorist financing.

Non-Profit Organizations

  • Develop clear sanctions for non-profit organizations (NPOs) in case of non-compliance with AML/CFT regulations.
  • Establish clear provisions for the application of sanctions regarding certain infractions by NPOs.

Customer Due Diligence

  • Implement a risk-based approach to customer due diligence, ensuring that high-risk customers are subject to enhanced scrutiny.
  • Verify the identity of new customers before establishing a business relationship.

Ongoing Monitoring and Reporting

  • Establish procedures for ongoing monitoring of customers, including regular review of transactions and updating of customer information.
  • Implement effective reporting mechanisms for suspicious transactions, including timely submission of reports to the FIU.

Cross-Border Transactions

  • Report cross-border movements of physical currency exceeding $10,000 or its equivalent.
  • Implement procedures for verifying the identity of customers of cash-based businesses.

Transparency and Cooperation

  • Develop a clear framework for transparency and cooperation with foreign authorities.
  • Establish effective information-sharing mechanisms to prevent money laundering and terrorist financing.

Beneficial Ownership

  • Maintain accurate and up-to-date records of beneficial owners, including identification and verification of beneficial ownership.
  • Implement procedures for identifying and verifying beneficial owners of NPOs.

By addressing these areas, Honduras can enhance its compliance with international AML/CFT standards and prevent money laundering and terrorist financing activities.