|Karla Andino||José Ramón Paz Morales|
In April 2015 Honduras gained two new legal instruments to combat money-laundering: the Special Law Against Money Laundering (the Special Law) and the Law to Regulate Non-Financial Professions and Activities (the NFPA Law). The former replaces the 2002 Law Against the Crime of Money Laundering, while the latter expands the scope of anti-money laundering (AML) legislation to include the non-financial sector.
The Special Law reflects the risk-based approach that financial institutions should carry out in their AML checks. It is based on the international standards set out by the Financial Action Task Force (FATF) recommendations.
The Special Law introduces a more tailored way for each financial institution (FI) to determine its AML policies and know your customer (KYC) due diligence processes. It also requires FIs to fully understand their risk exposure in specific businesses. This exposure must be addressed with adequate resources, procedures and mechanisms to prevent money laundering and the financing of terrorism. This imposes a significant responsibility on FIs and their shareholders, notwithstanding the fact that the banking regulator will continue its supervision role.
Meanwhile, the NFPA Law assigns AML obligations on non-governmental and non-financial businesses and professions. Compliance is no longer a reality just for FIs or the financial sector. Businesses relating to real estate, transfers of money and other valuables, gambling, retail of expensive goods and the accountancy and legal professionals must now introduce compliance policies, reporting duties and other AML-oriented efforts and resources.
The fight against money laundering has broadened its reach, its strategies and its approach within the financial and private sectors. However, it remains to be seen how the tension between the need to comply with these new responsibilities and their impact on day-to-day business will play out in the non-financial sector. In addition, it is still to be seen how FIs will execute the self-regulating approach in their AML efforts.
Karla Andino and José Ramón Paz Morales
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