Honduras’ Banking Anti-Money Laundering Laws Under Scrutiny
A year after Honduras reformed its money laundering law, dozens of individuals with alleged ties to organized crime have been freed from prison, sparking concerns that the move is an attempt to shield those in power.
Dozens Released from Prison Amid Controversy
At least 45 people suspected of being involved with organized crime have been released since the reform was passed, according to an investigation by El Heraldo published on October 25. The Honduran government approved changes to the law in November last year after Congress gave its backing.
Key Changes to the Reform
- Prosecutors must now prove that a person’s suspicious wealth is directly linked to another crime, such as drug trafficking or arms trafficking.
- Investigators can no longer access financial records without prior permission from a judge.
Notable Releases
Among those released are former congressman Seth Paisano Wood and his brother Roberto, who were arrested in 2019 over allegations of running a drug trafficking network in the eastern department of Gracias a Dios. The brothers were never formally charged with the crime but were convicted of money laundering when prosecutors found they had unexplained wealth.
Five others who were arrested as part of Operation Arcano, which uncovered alleged links between construction companies and Honduran drug traffickers, including the Valle Valle group, also had their charges dropped.
Criticism and Controversy
The reform has been criticized for giving criminals immunity from prosecution and allowing public officials to regain their liberty. Luis Javier Santos, chief prosecutor for Honduras’ Special Prosecutor’s Unit Against Corruption Networks (Unidad Fiscal Especial contra Redes de Corrupción – UFERCO), told InSight Crime that the reform has “effectively given criminals immunity from prosecution.”
“This reform was intended to limit and shield against future investigations,” Santos said.
There have been attempts to overturn the reform, with the Attorney General’s Office stating in January that it should be deemed unconstitutional as the Supreme Court was not consulted on its legality. However, this move fits a pattern of controversial reforms passed by Honduras’ Congress, including one in 2019 criticized for protecting politicians from being investigated for embezzlement of public funds.
Government Criticized for Prioritizing Power over Corruption
The Honduran government also faced criticism last February due to a plan to grant amnesty to officials who had served under former President Manuel Zelaya. The move sparked concerns that the government is prioritizing shielding those in power over addressing corruption and organized crime.