FATF status

Honduras is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 16 February 2012

The FATF welcomes Honduras’ significant progress in improving its AML/CFT regime and notes that Honduras has largely met its commitments in its Action Plan regarding the strategic deficiencies that the FATF had identified in February 2010. Honduras is therefore no longer subject to FATF’s monitoring process under its on-going global AML/CFT compliance process. Honduras will work with CFATF as it continues to address the full range of AML/CFT issues identified in its Mutual Evaluation Report, and further strengthen its AML/CFT regime.

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Honduras was undertaken in 2020. According to that Evaluation, Honduras was deemed Compliant for 18 and Largely Compliant for 14 of the FATF 40 Recommendations. It remains Highly effective for 1 and Substantially Effective for 2 of the Effectiveness & Technical Compliance ratings.

Corruption in Honduras significantly hampers investment, affecting various sectors including government procurement and real estate transactions. Despite having a legal framework against corruption, enforcement is weak, leading to widespread impunity and a culture where bribery is commonplace. The Castro administration is in discussions with the UN to establish an International Commission against Impunity and Corruption, highlighting ongoing efforts to address these issues.

Honduras has a diverse economy characterized by agriculture, industry, and services, with real economic growth projected at 3.5 percent for 2023. Despite its competitive advantages, including proximity to U.S. markets and a skilled labor force, the investment climate is hindered by government policy uncertainty, challenges in accessing foreign currency, and concerns over energy regulations and infrastructure. The government has initiated infrastructure projects and agreements with international financial institutions to stimulate growth, but ongoing issues such as high electricity costs and political instability continue to pose significant challenges for investors.

Honduras presents a challenging investment climate characterized by significant uncertainty stemming from government policies and legislation, which has led to limited opportunities for both domestic and international investors. Despite its competitive advantages, such as proximity to U.S. markets and a skilled labor pool, many companies face operational difficulties, including restricted access to U.S. dollars and concerns over pending legislation, expropriation threats, and unreliable electricity supply. The government's mixed signals regarding capitalism and public rhetoric towards the private sector have further exacerbated the perception of risk among potential investors.