Honduras Struggles with Money Laundering, Report Shows
A recent report by the Financial Action Task Force (FATF) has revealed that Honduras is still grappling with issues related to money laundering. The country’s Mutual Evaluation 2016 showed that it failed to fully implement several key recommendations aimed at preventing and combating money laundering.
Compliance Issues
According to the report, Honduras was found to be partially compliant in several areas, including:
- Assessing risk and applying a risk-based approach
- National cooperation and coordination
- Confiscation and provisional measures
However, the country was largely non-compliant in other areas, such as:
- Financial institution secrecy laws
- Customer due diligence
- Record keeping
- Internal controls
Vulnerabilities in the Financial System
The report highlighted that Honduras’ financial system is vulnerable to money laundering and terrorist financing due to its lack of transparency and beneficial ownership of legal persons and arrangements. Additionally, the country’s regulatory and supervisory bodies failed to demonstrate effective powers of supervision over financial institutions and designated non-financial businesses and professions (DNFBPs).
Lack of Comprehensive Approach
The report noted that Honduras lacks a comprehensive approach to combating money laundering and terrorist financing, with many laws and regulations still pending implementation. Furthermore, the country’s law enforcement and investigative authorities were found to be lacking in terms of their powers and responsibilities.
FATF Recommendations
The FATF recommendations aim to ensure that countries have effective systems in place to prevent and combat money laundering and terrorist financing. Honduras’ failure to comply with these standards puts it at risk of being classified as a high-risk jurisdiction, which could have significant consequences for its financial institutions and economy.
Response from Honduran Authorities
In response to the report’s findings, Honduran authorities have promised to take steps to address the deficiencies identified. However, much work remains to be done if the country is to fully comply with international standards and prevent money laundering and terrorist financing.
Conclusion
The FATF report highlights the need for Honduras to take immediate action to address its money laundering issues. The country must implement effective measures to prevent and combat money laundering and terrorist financing to avoid being classified as a high-risk jurisdiction.