Honduras Fails to Meet International Standards in Fight Against Financial Crime
A recent assessment by the Financial Action Task Force (FATF) has revealed that Honduras is struggling to implement key measures to prevent and combat financial crime. The report, which evaluated the country’s compliance with FATF Recommendations, identified several areas where Honduras falls short.
Risk Assessment and National Cooperation
Honduras was rated “partially compliant” in its ability to assess risk and apply a risk-based approach to combating money laundering and terrorist financing. This suggests that the country is not effectively identifying and mitigating potential threats in this area.
Key Areas for Improvement
The report highlighted several areas where Honduras needs to improve, including:
- Money Laundering Offence: While rated “largely compliant,” there is still work to be done in this area.
- Confiscation and Provisional Measures: Honduras was rated “compliant” but requires effective implementation of these measures.
- Terrorist Financing Offence: Rated “largely compliant,” but further improvement is needed.
DNFBPs: Customer Due Diligence
Honduras was rated “non-compliant” in its customer due diligence requirements for designated non-financial businesses and professions (DNFBPs). This is a significant concern, as it may allow illicit activities to go undetected.
Transparency and Beneficial Ownership
The country was also rated “non-compliant” in transparency and beneficial ownership requirements. This makes it difficult to identify the true owners of companies and other legal entities.
Regulation and Supervision
Honduras’s regulatory and supervisory bodies were rated “largely compliant,” but there is still room for improvement in this area.
Law Enforcement and Investigative Authorities
The country’s law enforcement and investigative authorities were rated “compliant” but require further support to effectively combat financial crime.
Recommendations for Improvement
To address these concerns, Honduras should:
- Enhance its risk assessment and national cooperation capabilities
- Improve its money laundering offence and confiscation provisions
- Strengthen its customer due diligence requirements for DNFBPs
- Increase transparency and beneficial ownership requirements
- Provide further support to law enforcement and investigative authorities