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 opportunities for U.S. businesses and citizens, particularly affecting public sector dealings and the judiciary. Despite having legal frameworks and international agreements aimed at combating corruption, such as the UN Anticorruption Convention and the Inter-American Convention against Corruption, enforcement remains weak, leading to widespread impunity and a culture where bribery is commonplace. The ongoing negotiations for a UN-led International Commission against Impunity and Corruption in Honduras highlight the government's recognition of these challenges.

Honduras has a diverse economy with significant contributions from agriculture, industry, and services, yet it faces challenges due to government policies and uncertainty in the investment climate. Despite its competitive advantages, including proximity to U.S. markets and a skilled labor pool, many businesses struggle with access to foreign currency, regulatory hurdles, and concerns over expropriation and political instability. Recent agreements with the IMF and infrastructure projects aim to bolster economic growth, but ongoing issues such as high electricity costs and bureaucratic inefficiencies continue to hinder investment.

Honduras presents a mixed investment climate, characterized by significant competitive advantages such as proximity to U.S. markets and a skilled labor pool. However, investors face challenges including government policy uncertainty, difficulties in accessing U.S. dollars due to strict regulations by the Central Bank, and concerns over potential expropriation and political instability, which have led to a more challenging environment for both domestic and international investments.