# Honduras - United States Department of State

- Honduras HomeReportsBureau of Democracy, Human Rights, and Labor2023 Country Reports on Human Rights Practices&#8230;Honduras				hide	document.addEventListener("DOMContentLoaded", function(event) {	if(window.jQuery) {		jQuery( document ).ready(function() {			if (jQuery(".bc_middle").hasClass("collapse")) {				jQuery(".bc_ellipse").click(function(){					jQuery(".bc_hide").toggleClass("visible");					jQuery(".bc_middle").toggle();					jQuery(".bc_ellipse").toggle();					jQuery(".bc_content").toggleClass("noflex");					jQuery(".block_breadcrumbs_content").toggleClass("noflex");				});				jQuery(".bc_hide").click(function(){					jQuery(".bc_hide").toggleClass("visible");					jQuery(".bc_middle").toggle();					jQuery(".bc_ellipse").toggle();					jQuery(".bc_content").toggleClass("noflex");					jQuery(".block_breadcrumbs_content").toggleClass("noflex");				});			} else {				jQuery(".bc_ellipse").hide();			}		});	}});																							2023 Country Reports on Human Rights Practices: Honduras																																					Bureau of Democracy, Human Rights, and Labor																																																																																							Download Report																																																							Translations																																																																 In this section										/																							EXECUTIVE SUMMARY																																													EXECUTIVE SUMMARY																															Section 1. Respect for the Integrity of the Person																																																									a. Arbitrary Deprivation of Life and Other Unlawful or Politically Motivated Killings																																																																											b. Disappearance																																																																											c. Torture and Other Cruel, Inhuman, or Degrading Treatment or Punishment, and Other Related Abuses																																																																			Prison and Detention Center Conditions																																																																																																																		d. Arbitrary Arrest or Detention																																																																			Arrest Procedures and Treatment of Detainees																																																																																																																		e. Denial of Fair Public Trial																																																																			Trial Procedures																																																								Political Prisoners and Detainees																																																																																																																		f. Transnational Repression																																																																											g. Property Seizure and Restitution																																																																											h. Arbitrary or Unlawful Interference with Privacy, Family, Home, or Correspondence																																																																																	Section 2. Respect for Civil Liberties																																																									a. Freedom of Expression, Including for Members of the Press and Other Media																																																																			Internet Freedom																																																																																																																		b. Freedoms of Peaceful Assembly and Association																																																																			Freedom of Peaceful Assembly																																																																																																																		c. Freedom of Religion																																																																											d. Freedom of Movement and the Right to Leave the Country																																																																											e. Protection of Refugees																																																																											f. Status and Treatment of Internally Displaced Persons (IDPs)																																																																																	Section 3. Freedom to Participate in the Political Process																																																									Elections and Political Participation																																																																																	Section 4. Corruption in Government																															Section 5. Governmental Posture Towards International and Nongovernmental Monitoring and Investigation of Alleged Abuses of Human Rights																															Section 6. Discrimination and Societal Abuses																																																									Women																																																																											Systemic Racial or Ethnic Violence and Discrimination																																																																											Indigenous Peoples																																																																											Children																																																																											Antisemitism																																																																											Trafficking in Persons																																																																											Acts of Violence, Criminalization, and Other Abuses Based on Sexual Orientation, Gender Identity or Expression, or Sex Characteristics																																																																											Persons with Disabilities																																																																											Other Societal Violence or Discrimination																																																																																	Section 7. Worker Rights																																																									a. Freedom of Association and the Right to Collective Bargaining																																																																											b. Prohibition of Forced or Compulsory Labor																																																																											c. Prohibition of Child Labor and Minimum Age for Employment																																																																											d. Discrimination (see section 6)																																																																											e. Acceptable Conditions of Work																																																																																																							EXECUTIVE SUMMARY				The human rights situation in Honduras was problematic, due to the prolonged estado de excepción (state of emergency) and an increase in gender-based violence.  The Office of the UN High Commissioner for Human Rights raised concerns regarding illegal detentions, excessive use of force, and abuses committed during warrantless home searches committed in the context of the estado de excepción.  Violence and extortion persisted at high levels, due to competition among gangs.Significant human rights issues included credible reports of:  arbitrary or unlawful killings; torture or cruel, inhuman, or degrading treatment or punishment by government agents; harsh and life-threatening prison conditions; arbitrary arrest or detention; serious problems with the independence of the judiciary; serious restrictions on freedom of expression and media freedom, including threats against media members by criminal elements; serious government corruption; extensive gender-based violence, including domestic violence, sexual violence, and femicide; and crimes involving violence or threats of violence targeting lesbian, gay, bisexual, transgender, queer, or intersex persons.The government took credible steps to identify and punish officials who may have committed human rights abuses or engaged in corruption, but a weak judicial system and corruption were major obstacles to obtaining convictions.Criminal groups, including local and transnational gangs and narcotics traffickers, were significant perpetrators of violent crimes and committed acts of homicide, torture, kidnapping, extortion, human trafficking, intimidation, and other threats and violence directed against human rights defenders, judicial authorities, lawyers, business community members, journalists, bloggers, women, and other vulnerable populations.  The government investigated and prosecuted some of these crimes, but impunity was widespread.																														Section 1.													 Respect for the Integrity of the Person												    																																																a. Arbitrary Deprivation of Life and Other Unlawful or Politically Motivated Killings										There were reports that the government or its agents committed one arbitrary or unlawful killing within the National Penal Institute.  No further information was publicly available regarding the incident.The Public Ministry reported eight killings of human rights activists as of September.  For example, unknown assailants shot and killed Aly Domínguez on January 7 and Oquelí Domínguez on June 15.  Both men were members of the Municipal Committee in Defense of Common and Public Goods of Tocoa, in the department of Colón.  Their family was one of the most prominent environmental defenders of the Guapinol River and surrounding area, in the northern part of the country.  The government continued to investigate the killings.In July, the government signed an agreement establishing a tripartite commission to investigate human rights abuses in the Bajo Aguan area and provide reparations to victims.Criminal groups, such as drug traffickers and local and transnational gangs including MS-13 and the 18th Street gang, committed killings.																																				b. Disappearance										There were no reports of disappearances by or on behalf of government authorities.																																				c. Torture and Other Cruel, Inhuman, or Degrading Treatment or Punishment, and Other Related Abuses										Although the law prohibited such practices, there were credible reports of abuses by members of the security forces.The National Human Rights Commission (CONADEH) reported 66 cases of alleged torture or cruel and inhuman treatment of detainees and prisoners by security forces through August, while the Public Ministry received five such reports through July.  The quasi-governmental National Committee for the Prevention of Torture, Cruel, Inhuman, or Degrading Treatment (CONAPREV) received 41 complaints of the use of torture or cruel and inhuman treatment through September.Corruption, a lack of investigative resources, and judicial delays led to widespread impunity, including for members of security forces.																Prison and Detention Center Conditions						Prison conditions were harsh and at times life threatening due to gross overcrowding, malnutrition and lack of medical care, and abuse by prison officials.  The government’s failure to control criminal activity and pervasive gang-related violence contributed significantly to insecurity.Abusive Physical Conditions:  Prisons were severely overcrowded.  CONAPREV reported that as of March 31, the prison population was more than 19,500, in a system designed for approximately 13,000 inmates.Prisoners suffered from malnutrition, lack of adequate sanitation and medical care, and, in some prisons, lack of adequate ventilation and lighting.CONADEH and CONAPREV reported more than 100 cases of alleged torture or cruel and inhuman treatment of detainees and prisoners by security forces.The government failed to control pervasive gang-related violence and criminal activity within the prisons.  Many prisons lacked sufficient security personnel.  Prisoners had access to weapons and other contraband, inmates attacked other inmates with impunity, and inmates and their associates outside prison threatened prison officials and their families.On June 21, members of the 18th Street gang attacked members of a rival gang, MS-13, in the Tamara women’s prison, San Pedro Sula.  Forty-six women were killed.  Following the attack, President Castro transferred control of the prison system to the military police.Administration:  The judicial system was legally responsible for monitoring prison conditions.  The government tasked CONAPREV with visiting prisons and making recommendations for protecting the rights of prisoners.Independent Monitoring:  After the government ordered an emergency military takeover of prisons following a deadly riot in June in the women’s prison, the government generally permitted prison visits by independent local and international human rights observers, including the International Committee of the Red Cross, with some exceptions.																										d. Arbitrary Arrest or Detention										The law prohibited arbitrary arrest and detention and provided for the right of any person to challenge the lawfulness of their arrest or detention in court.  While no official statistics were provided, there were allegations of arbitrary detention and unlawful arrest as a result of the imposed estado de excepción.																Arrest Procedures and Treatment of Detainees						By law, police could make arrests only with a warrant unless they made the arrest during the commission of a crime, there was strong suspicion that a person had committed a crime and might otherwise evade criminal prosecution, or they encountered a person in possession of evidence related to a crime.  The law required police to inform persons of the grounds for their arrest and bring detainees before a competent judicial authority within 24 hours.  It stipulated that a prosecutor had 24 additional hours to decide if there was probable cause for indictment, whereupon a judge had 24 more hours to decide whether to issue a temporary detention order.  Such an order could be effective for up to six days, after which the judge was required to hold a pretrial hearing to examine whether there was probable cause to continue pretrial detention.  The law allowed bail for persons charged with some felonies and gave prisoners the right of prompt access to family members.  The law allowed the release of other suspects pending formal charges, on the condition that they periodically reported to authorities, although management of this reporting mechanism was often weak.  The government generally respected these provisions.Persons suspected of any of 21 specific felonies remained in custody, pending the conclusion of judicial proceedings against them.  Some judges ruled that such suspects could be released on the condition they report periodically to authorities.  The law granted prisoners the right to prompt access to a lawyer of their choice and, if indigent, to government-provided counsel, although the public defender mechanism was weak, and authorities did not always abide by these requirements.Arbitrary Arrest:  CONADEH and the Public Ministry did not report any statistics on cases of illegal detention or arbitrary arrest.  Nongovernmental organizations (NGOs) reported three cases of arbitrary arrest.  There were also allegations of arbitrary detention and unlawful arrest as a result of the imposed estado de excepción.Guapinol defender Arnol Aleman was detained for 26 hours, despite having a provisional release letter.Pretrial Detention:  Judicial inefficiency, corruption, and insufficient resources delayed proceedings in the criminal justice system, and lengthy pretrial detention was a serious problem.  For crimes with minimum sentences of six years’ imprisonment, the law authorized pretrial detention of up to two years.  The prosecution could request an additional six-month extension, but many detainees remained in pretrial detention much longer, including for more time than the maximum period of incarceration for their alleged crime.  The law did not authorize pretrial detention for crimes with a maximum sentence of five years or less.The law mandated that authorities release detainees whose cases had not yet come to trial and whose time in pretrial detention already had exceeded the maximum prison sentence for their alleged crime.  Nonetheless, many prisoners remained in custody after completing their full sentences, and sometimes even after an acquittal, because officials failed to process their releases expeditiously.																										e. Denial of Fair Public Trial										The law provided for an independent judiciary, but the justice system was poorly staffed, inadequately equipped, often ineffective, and subject to intimidation, corruption, politicization, and patronage.  Low salaries and a lack of internal controls rendered judicial officials susceptible to bribery.  Powerful special interests, including criminal groups, exercised influence on the outcomes of some court proceedings.																Trial Procedures						The law provided for the right to a fair and public trial; however, the judiciary was often slow to enforce this right.Credible observers noted problems in trial procedures, such as a lack of admissible evidence, judicial corruption, witness intimidation, and an ineffective witness protection program.						Political Prisoners and Detainees						There were no reports of political prisoners or detainees.																										f. Transnational Repression										Not applicable.																																				g. Property Seizure and Restitution										Not applicable.																																				h. Arbitrary or Unlawful Interference with Privacy, Family, Home, or Correspondence										Although the law generally prohibited such actions, a legal exception allowed government authorities to enter a private residence to prevent a crime or in case of an emergency.  On December 6, the Office of the UN High Commissioner for Human Rights expressed concerns regarding illegal detentions, excessive use of force, and abuses committed during warrantless home searches committed in the context of the estado de excepción.																																					Section 2.													 Respect for Civil Liberties												    																																																a. Freedom of Expression, Including for Members of the Press and Other Media										The law provided for freedom of expression, including for members of the press and other media, with some restrictions, and the government generally respected this right.  Although many press outlets were politically aligned, the press and prevailing democratic norms combined to promote freedom of expression, including for media members.Freedom of Expression:  Senior government representatives criticized civil society and members of the international community for comments perceived as critical of the government.  Civil society groups reported these statements had a chilling effect on freedom of expression.Violence and Harassment:  Journalists and other members of civil society reported they self-censored due to fear of criticism, harassment, and retribution by the government and its supporters.  Others reported direct acts of intimidation or threats of violence from government officials or supporters for being critical of the government.  For example, National Police agents intimidated journalist Orlin Martinez, claiming he was an informant for criminal groups.  Civil society organizations criticized the government’s failure to investigate threats and incidents of violence adequately.Censorship or Content Restrictions for Members of the Press and Other Media, Including Online Media:  Media members and NGOs stated the press self-censored due to fear of retaliation from criminal groups, drug trafficking organizations, or criticism by government officials.  Media also engaged in self-censorship to avoid losing lucrative advertising contracts with the government.Libel/Slander Laws:  Libel and slander were criminal offenses.  No cases were reported during the year.Nongovernmental Impact:  Some journalists and other members of civil society reported threats from members of criminal groups.  It was unclear how many of these threats were related to the victims’ professions or activism.  For example, on January 30, unknown assailants shot and killed television media editor Carlos Barahona in Tegucigalpa.  On December 22, unknown assailants shot and killed social communicator Javier Ramírez Amador in the city of Danlí.  Ramírez worked for Channel 24 primetime television and the Public Prosecutor’s Office and had been receiving police protection since May under the National Protection Mechanism.  The police officer protecting Ramírez was also shot during the attack.  NGOs believed the killing was reprisal for Ramirez’s work investigating criminal activities.  The government continued to investigate the killing.Several anonymous social media sites criticized journalists (as well as activists and civil society organizations) who were critical of the government or of opposition party policies.																Internet Freedom						The government did not restrict or disrupt access to the internet or censor online content.																										b. Freedoms of Peaceful Assembly and Association										The constitution provided for the freedoms of peaceful assembly and association, but the government did not always respect the right of peaceful assembly, due to a continued estado de excepción beginning in November 2022, in which these rights were suspended.																Freedom of Peaceful Assembly						On May 9, citizens marched in a peaceful protest in the southern city of Choluteca against tax law reforms proposed by the governing LIBRE party.  In response, the Castro administration convened a meeting of the National Defense and Security Council, condemned the protest, and ordered an investigation, claiming the protesters had been coerced by business owners into participating in the protest.  The government promised to prosecute those involved, based on the allegation the march organizers coerced protesters to participate.  As of September, police and other justice sector officials had yet to publicly identify any of the protest leaders as having committed a crime.In another instance, in July supporters of the ruling party chased peaceful protesters while throwing objects at them to disrupt their demonstration.  The government also reportedly used its control of the Honduran Transportation Institute to arbitrarily enforce intercity bus travel rules in August to reduce numbers of protesters at another opposition-led protest in Tegucigalpa.																										c. Freedom of Religion										See the Department of State’s International Religious Freedom Report at  https://www.state.gov/religiousfreedomreport/.																																				d. Freedom of Movement and the Right to Leave the Country										The law provided for freedom of internal movement, foreign travel, emigration, and repatriation, and the government generally respected these rights.In-country Movement:  There were areas where authorities could not assure freedom of movement due to criminal activity and a lack of significant government presence.																																				e. Protection of Refugees										The government cooperated with the Office of the UN High Commissioner for Refugees (UNHCR) and other humanitarian organizations in providing protection and assistance to refugees, returning refugees, or asylum seekers, and other persons of concern.Access to Asylum:  The law provided for granting asylum or refugee status.  The government had a nascent system to provide legal protection to refugees.  Its operations to receive and process cases relied on substantial support from UNHCR.  UNHCR’s support focused on providing training to officers of the National Institute for Migration, supporting decisions on submitted claims, and improving reception conditions for asylum seekers.Abuse of Refugees and Asylum Seekers:  Transiting migrants, forcibly displaced populations, and asylum seekers with pending cases were vulnerable to abuse and sexual exploitation by criminal organizations.  Women, children, and lesbian, gay, bisexual, transgender, queer, or intersex (LGBTQI+) individuals were especially vulnerable to abuse.  Transiting migrants, refugees, and other vulnerable populations faced acute security risks in border zones.																																				f. Status and Treatment of Internally Displaced Persons (IDPs)										The Internal Displacement Monitoring Center estimated that between 2004 and 2018 (most recent data available), there were approximately 247,000 IDPs due to violence in the country.  Gang activity, including attacks on and exploitation of nonmembers, was the primary contributor to violence-related internal displacement.  Official data on forced displacement, especially displacement due to violence, was limited in part because gangs controlled many of the neighborhoods where individuals were forced from their homes and communities.  NGOs reported IDPs were at increased risk of victimization and exploitation by criminal groups.The government maintained the Interinstitutional Commission for the Protection of Persons Displaced by Violence and created the Directorate for the Protection of Persons Internally Displaced by Violence within the Ministry of Human Rights.  Despite incremental progress, government capacities to respond to the needs of IDPs was limited.In March President Castro enacted the Law for the Prevention, Care, and Protection of Internally Displaced People, created to provide a legal framework to protect the rights of IDPs.For further information about IDPs in the country, please see the materials of the Internal Displacement Monitoring Center at  https://www.internal-displacement.org&nbsp;.																																					Section 3.													 Freedom to Participate in the Political Process												    																						The law provided citizens the right to choose their government in free and fair periodic elections held by secret ballot and based on nearly universal and equal suffrage.  The law did not permit active members of the military or civilian security forces to vote.  The constitution prohibited practicing clergy from running for office or participating in political campaigns.																										Elections and Political Participation										Abuses or Irregularities in Recent Elections:  The most recent national elections, held in November 2021, were generally considered to be fair and free of abuses and irregularities.  Some NGOs and political parties reported irregularities, but international observers reported they were not systematic and not widespread enough to affect the outcome of the presidential election.																																					Section 4.													 Corruption in Government												    																						The law provided for criminal penalties for corruption by officials, but authorities did not implement the law effectively, and officials continued to engage in corrupt practices with impunity.  There were numerous reports of government corruption.Corruption:  On May 23, the Special Prosecutor’s Office for the Protection of Children reported it had received official complaints filed against the former director of the Directorate for Children, Adolescents, and the Family, Dulce Villanueva, for irregular adoption proceedings and alleged collection of bribes.  On May 26, President Castro accepted her resignation.For additional information regarding corruption in the country, please see the Department of State’s Investment Climate Statement for the country, and the Department of State’s International Narcotics Control Strategy Report, which includes information on financial crimes.																											Section 5.													 Governmental Posture Towards International and Nongovernmental Monitoring and Investigation of Alleged Abuses of Human Rights												    																						A wide variety of domestic and international human rights groups generally operated without government restriction to monitor or investigate human rights conditions or cases and publish their findings.  Government officials were somewhat cooperative and responsive to the views of these groups, but some human rights organizations criticized government officials for lack of access and responsiveness.Retribution against Human Rights Defenders:  The Public Ministry reported eight killings of human rights and environmental activists as of September.  For example, on January 7, Aly Domínguez and Jairo Bonilla were shot and killed by unknown assailants.  Domínguez and Bonilla were cofounders of a grassroots resistance protesting a controversial open-pit iron oxide mining project that was polluting a river that runs through the Bajo Aguán valley in northern part of the country.  On June 15, Oqueli Domínguez, Aly’s brother, was shot and killed in similar circumstances.  The government continued to investigate the killings.Government Human Rights Bodies:  A semiautonomous commission for human rights, CONADEH, investigated complaints of human rights abuses.  NGOs and other civil society groups generally considered the commission independent but at times ineffective.The Ministry of Human Rights served as an advocate for human rights within the government.  The Public Ministry’s Office of the Special Prosecutor for Human Rights handled cases involving charges of human rights abuses by government officials.  The Public Ministry also had a Special Prosecutor’s Office for the Protection of Human Rights Defenders, Journalists, Social Communicators, and Justice Officials.  There was also a Human Rights Commission in the national congress.  The Ministries of Security and of Defense both had human rights offices that coordinated human rights-related activities with the Ministry of Human Rights.																											Section 6.													 Discrimination and Societal Abuses												    																																																Women										Rape and Domestic Violence:  The law criminalized all forms of rape, including spousal rape and domestic or intimate partner rape and other forms of domestic and sexual violence, as well as so-called corrective rape of LGBTQI+ persons.  The government considered rape a crime of public concern, and the state prosecuted suspected rapists even if survivors did not press charges.  The penalties for rape ranged from nine to 13 years’ imprisonment.  The law was not effectively enforced; weak public institutional structures contributed to the inadequate enforcement.The law did not specifically criminalize domestic violence but provided penalties of up to 12 years in prison for violence against a family member, depending on the severity of the assault and aggravating circumstances.  If a victim’s physical injuries did not reach the severity required to categorize the violence as a criminal act, the legal penalty for a first offense was a sentence of one to three months of community service.Survivors of domestic violence were entitled to certain protective measures, such as removing the abuser from the home and prohibiting the abuser from visiting the victim’s workplace or other frequently visited locations.  Persons who disobeyed the prohibition could be detained for up to 24 hours as a preventive measure.  The law provided a maximum sentence of three years in prison for disobeying a restraining order connected with the crime of violence against a woman.Civil society groups reported women often did not report domestic violence or withdrew charges because they feared, or were economically dependent on, the aggressor.  In addition, women experienced delays in accessing justice due to police who failed to process complaints in a timely manner or judicial system officials who deferred scheduling hearings.Other Forms of Gender-based Violence or Harassment:  The Ministry of Security reported 229 violent women deaths from January to June, a nearly 49 percent increase compared with the same period in 2022.  The Human Rights Observatory of the Center for Women’s Rights registered 341 violent deaths of women as of October 31.The law criminalized sexual harassment, including in employment.  The law stipulated penalties of one to three years in prison and possible suspension of offenders’ professional licenses, but the government did not effectively enforce the law.Discrimination:  Although the law accorded women and men the same legal rights and status, including property rights in divorce cases, many women did not fully enjoy such rights due to barriers in access to justice and lack of information regarding legal protections.  Most women in the workforce engaged in lower-status and lower-paying informal occupations, such as domestic service, without the benefit of legal protections.  The law did not mandate equal pay for equal work.  The law prohibited employers from requiring pregnancy tests as a prerequisite for employment.  The law stated a woman’s employment should be appropriate to her physical state and capacity.  Many employers discriminated against women.  For example, it was common in job announcements that only male applicants should apply.Reproductive Rights:  There were no reports of coerced abortion or involuntary sterilization on the part of government authorities.The government did not provide government-sponsored access to sexual and reproductive health services for survivors of sexual violence, and emergency contraception and postexposure prophylaxis were not available as part of clinical management of rape.  President Castro signed an executive order in March allowing the sale, distribution, and use of emergency contraception, but it was not widely available.  The government’s ability to provide health-care services to survivors of sexual violence was limited.  Survivors relied on assistance from NGOs such as Doctors Without Borders.In 2019 (most recent data available), 94 percent of births were attended by skilled health-care personnel; however, NGOs reported significant gaps in obstetric care, especially in rural areas.  The United Nations reported the adolescent birth rate was 89 births per 1,000 girls ages 15 to 19.  UN human rights experts stated the difficulty of access to contraception, particularly in rural areas, contributed to a high rate of adolescent pregnancy.The Ministry of Health estimated that there were 86 maternal deaths per year and that the vast majority of the leading causes were preventable.																																				Systemic Racial or Ethnic Violence and Discrimination										The law criminalized discrimination based on race and ethnicity and included crimes committed against individuals due to race or ethnicity as aggravating circumstances to increase penalties for other criminal offenses.  NGOs reported the government did not effectively combat discrimination or promote equal access to government services and employment opportunities.The government’s National Policy to Combat Racism and Racial Discrimination sought to promote equality and combat discrimination related to the country’s two Afro-descendent groups, with a focus on social and political participation; access to education, health care, justice, and employment opportunities; and rights to ancestral lands and natural resources.  NGOs reported the government did not make sufficient efforts to comply with Inter-American Court of Human Rights rulings, specifically cases related to territorial rights for Garífuna communities.																																				Indigenous Peoples										Indigenous groups had limited representation in the national government and consequently little direct input into decisions affecting their lands, cultures, traditions, and the allocation of natural resources.Indigenous communities continued to report threats and acts of violence against them and against community and environmental activists.  Violence was often rooted in a broader context of conflict regarding land and natural resources, corruption, lack of transparency and community consultation, other criminal activity, and limited state ability to protect the rights of vulnerable communities.Ethnic minority rights leaders, international NGOs, and farmworker organizations claimed the government failed to redress actions taken by security forces, government agencies, private individuals, and businesses to dislodge Indigenous persons from lands over which they claimed ownership based on land reform law or ancestral land titles.Persons from Indigenous and Afro-descendant communities experienced discrimination in employment, education, housing, and health services.As of September, there was no conclusion after evidence hearings in June regarding the November 2022 killing of Marcos Pineda Aguilar during a police raid in the community of El Encinal, department of La Paz.  National Police agents allegedly killed the victim, a member of the Civic Council of Popular and Indigenous Organizations of Honduras.  The hearings relied on police testimony.																																				Children										Birth Registration:  Failure to register births resulted in denial of public services, including access to health services or school enrollment.Child Abuse:  The law established prison sentences of up to two and one-half years for child abuse.  The government did not enforce the law effectively.Child, Early, and Forced Marriage:  The minimum legal age of marriage was 18.  The government did not enforce the law effectively.  International NGOs reported 34 percent of girls and 12 percent of boys were married before age 18, with the practice more prevalent in rural areas.  Most unions were informal rather than a formal marriage.Sexual Exploitation of Children:  The law prohibited the sale, grooming, or use of children for commercial sexual exploitation, including sex trafficking.  The commercial sexual exploitation of children, especially in sex trafficking, was a problem, and the government made efforts to enforce the law, but its measures were not effective.  The country was a destination for child sex tourism, particularly in the tourist area of the Bay Islands.  The legal age of consent was 18.  The law prohibited the use of children younger than 18 for exhibitions or performances of a sexual nature or in the production of pornography.																																				Antisemitism										The Jewish community numbered approximately 150 members.  There were no known reports of antisemitic incidents.																																				Trafficking in Persons										See the Department of State’s Trafficking in Persons Report at  https://www.state.gov/trafficking-in-persons-report/.																																				Acts of Violence, Criminalization, and Other Abuses Based on Sexual Orientation, Gender Identity or Expression, or Sex Characteristics										Criminalization:  No laws existed to criminalize consensual same-sex conduct between adults, cross-dressing, or other sexual or gender characteristic-related behavior.  NGOs reported concern that the Public Ministry and government bodies lacked investigative processes to deal with cases of violence and hate crimes against LGBTQI+ persons, because investigative units did not receive training on gender and sexual diversity issues.  There was also a general lack of investigative personnel, contributing to a large number of unresolved cases.Violence and Harassment:  NGOs reported police or other government agents incited, perpetrated, condoned, or tolerated violence against LGBTQI+ individuals.  Impunity for such crimes was high.  LGBTQI+ organizations reported they were the target of hate speech from media, public officials, and religious organizations.  The Public Ministry reported seven killings of LGBTQI+ persons as of September, while NGOs reported 47 violent deaths and 83 hate crimes against LGBTQI+ persons as of November.On January 29, the Special Prosecutor’s Office for Crimes Against Life coordinated a raid in Roatán to capture Erick Gerardo del Arca, for the alleged rape and killing of Manuel Enrique Cruz, a member of the LGBTQI+ community.In June police detained Miguel Ángel Cabrera Oviedo and Antonio Josué Medina Vargas for the February 19 killing of Maryuri Lizeth Pineda, a member of the LGTBQI+ community.On May 18, a member of the National Police assigned to Intibucá Departmental Police Unit 13 of the municipality of Gracias, department of Lempira, reported Deputy Commissioner Jessica Aguilar for harassment regarding his sexual orientation.Discrimination:  The law prohibited discrimination based on sexual orientation and gender identity characteristics and included crimes committed against individuals because of their sexual orientation or gender identity as aggravating circumstances to increase penalties for criminal offenses.  Nevertheless, discrimination against LGBTQI+ persons persisted.  As of August, CONADEH received 25 reports of discrimination based on sexual orientation.  Same-sex couples and households headed by same-sex couples were not eligible for the same legal protections available to opposite-sex married couples.LGBTQI+ rights groups asserted government agencies and private employers engaged in discriminatory hiring practices.  Transgender women were particularly vulnerable to employment and education discrimination; many could find employment only as sex workers, increasing their vulnerability to violence and extortion.Availability of Legal Gender Recognition:  The law prohibited transgender persons from changing their name and legal gender status.  Other forms of legal gender recognition, such as nonbinary or intersex, were not available.Involuntary or Coercive Medical or Psychological Practices:  There were no documented cases of “conversion therapy,” but NGOs reported there were known cases of conversion therapies.  There were no reports medically unnecessary and irreversible “normalization” surgeries were performed on children or on nonconsenting adult intersex persons.Restrictions of Freedom of Expression, Association, or Peaceful Assembly:  There were no restrictions of freedom of expression, association, or peaceful assembly regarding LGBTQI+ matters or events.																																				Persons with Disabilities										The law required that persons with disabilities have access to buildings, but few buildings were accessible, and the government did not effectively implement laws or programs to provide such access.According to government estimates, children with disabilities attended school at a lower rate than the general population.  The Institute for National Statistics put net enrollment for primary school at 77 percent in 2021, but the National Center for Social Sector Information stated that in 2020, 43 percent of persons with disabilities received no formal education.The government had an Office for Persons with Disabilities located within the Ministry of Development and Social Inclusion, but its ability to provide services to persons with disabilities was limited.																																				Other Societal Violence or Discrimination										Persons with HIV and AIDS continued to be targets of discrimination, including in employment and occupation, and they suffered disproportionately from gender-based violence.																																					Section 7.													 Worker Rights												    																																																a. Freedom of Association and the Right to Collective Bargaining										The law granted workers the right to form and join unions of their choice, bargain collectively, and strike.  It prohibited employer retribution against employees for engaging in trade union activities.  The law placed restrictions on these rights, such as requiring that a recognized trade union represent at least 30 workers, prohibiting foreign nationals from holding union offices, and requiring that union officials work in the same substantive area of the business as the workers they represented.  The law prohibited members of the armed forces and police, as well as certain other public employees, from forming labor unions.  The Ministry of Labor and Social Security also required that union leaders be employed under permanent contracts, limiting the ability of seasonal agricultural workers to exercise their right to freedom of association.The law required an employer to begin collective bargaining once workers established a union, and it specified that if more than one union existed at a company, the employer had to negotiate with the largest.The law allowed only local unions to call strikes, prohibited labor federations and confederations from calling strikes, and required that a two-thirds majority of both union and nonunion employees at an enterprise approve a strike.  The law prohibited workers from legally striking until direct negotiations and government-accompanied mediation and conciliation had failed.  The Ministry of Labor had the power to declare a work stoppage illegal and grant employers the ability to discipline employees consistent with their internal regulations, including by firing strikers.  In addition, the law limited strikes in sectors the government designated as essential services but did not necessarily meet the criteria for essential services.  The law required workers in public health care, social security, staple food production, and public utilities (municipal sanitation, water, electricity, and telecommunications) to provide basic services during a strike.  The law also required that public-sector workers involved in the refining, transportation, and distribution of petroleum products submit their grievances to the Ministry of Labor.  The law permitted strikes by workers in export-processing zones and free zones for companies that provided services to industrial parks, but it required that strikes not impede the operations of other factories in such parks.The government did not effectively enforce the law.  Employers frequently refused to comply with Ministry of Labor orders that required them to reinstate workers who had been dismissed for participating in union activities.  The Ministry of Labor could order a company to reinstate workers, but the ministry lacked the personnel and transportation resources to verify compliance.  By law, the ministry could fine companies that violated the right to freedom of association.  The law permitted fines, and the penalty was commensurate with those for other laws involving denials of civil rights, such as discrimination.  Penalties were sometimes applied against violators, but the failure of the government to collect fines facilitated continued violations.  During the year, the government issued the highest penalty ever against an employer in a long outstanding case of violation of freedom of association and other labor law violations.Workers had difficulty exercising the right to form and join unions and to engage in collective bargaining.  Public-sector trade unionists raised concerns regarding government interference in trade union activities, including its ignoring or suspending collective agreements and its dismissals of union members and leaders.Some employers either refused to engage in collective bargaining or made it very difficult to do so.  Some companies also delayed appointing or failed to appoint representatives for required Ministry of Labor-led mediation, a practice that prolonged the mediation process and impeded the right to strike.  Unions also raised concerns that employers used temporary contracts to prevent unionization and to avoid providing full benefits.The government investigated violence and threats of violence against union leaders.  Impunity for such crimes was high.On June 24, unknown assailants shot and killed 13 persons in Choloma, department of Cortés.  Most of the victims were not union members; however, union leaders and maquila workers in Choloma, including the president of the Gildan San Miguel Workers’ Union, were among the victims.  The shooting was preceded by an announcement that Gildan Activewear planned to shut down its factory in Choloma, which led to threats against the union leaders from local gang members, who blamed the union for the closure and loss of employment.  The company noted the closure was strictly due to market conditions, reiterated its commitment to freedom of association and collective bargaining, and continued to engage with the union.  In June authorities arrested three suspects in relation to the shooting – Javier Antonio Colindres Hernández, José Andrés Hernández Gutiérrez, and an unnamed minor member of the Barrio 18 gang.  It was unclear whether the shooting was related to union activity.																																				b. Prohibition of Forced or Compulsory Labor										See the Department of State’s annual Trafficking in Persons Report at  https://www.state.gov/trafficking-in-persons-report/.																																				c. Prohibition of Child Labor and Minimum Age for Employment										See the Department of Labor’s Findings on the Worst Forms of Child Labor at  https://www.dol.gov/agencies/ilab/resources/reports/child-labor/findings/&nbsp;.																																				d. Discrimination (see section 6)																																														e. Acceptable Conditions of Work										Wage and Hour Laws:  The law provided for a minimum wage for most sectors.  There were 45 categories of monthly minimum wage, based on the industry and the size of a company’s workforce; minimum wages were above the poverty line.  The minimum wage law did not cover domestic workers, the vast majority of whom were women.The law prescribed a maximum eight-hour shift per day for most workers, a 44-hour workweek, and at least one 24-hour rest period for every six days of work.  It also provided for paid national holidays and annual leave.  The law required overtime pay, banned excessive compulsory overtime, limited overtime to four hours a day for a maximum workday of 12 hours, and prohibited the practice of requiring workers to complete work quotas before leaving their place of employment.In some industries, including agriculture, domestic service, and security, employers did not respect maternity rights or pay minimum wage, overtime, or vacation.  In these sectors, employers frequently paid workers for the standard 44-hour workweek irrespective of any additional hours they worked.  In the security and domestic service sectors, workers were frequently forced to work more than 60 hours per week but were paid only for 44 hours.  Employers frequently penalized agricultural workers for taking legally authorized days off.  Employers paid the minimum wage inconsistently in other sectors.  Civil society continued to raise problems with minimum wage violations, highlighting agricultural companies in the south as frequent violators.On July 25, the Ministry of Labor modified a 2018 agreement on Honduran Maquiladora Textile Sector and other Free Zone Companies to increase the minimum wage for maquila workers by 10 percent.Occupational Safety and Health:  Occupational safety and health (OSH) standards were appropriate for the main industries in the country, and OSH experts actively identified unsafe conditions, in addition to responding to workers’ OSH complaints.  By law, workers could remove themselves from situations that endangered their health or safety without jeopardizing continued employment.  Under the inspection law, the Ministry of Labor had the authority to temporarily shut down workplaces where there was an imminent danger of fatalities.  Enforcement of OSH standards was particularly weak in the construction, garment assembly, and agricultural sectors, as well as in the informal economy.Wage, Hour, and OSH Enforcement:  The Ministry of Labor was responsible for enforcing wage, hour, and OSH laws, but it did so inconsistently and ineffectively.  Penalties for violations of OSH law were commensurate with penalties for similar crimes but rarely applied against violators and rarely collected.The law permitted fines for wage and hour violations; these were commensurate with the penalties for similar crimes, such as fraud.  The government sometimes applied penalties against violators, but failure to collect fines facilitated wage and hour violations.  The Ministry of Labor had an insufficient number of inspectors to enforce the wage, hour, and OSH laws effectively.  Inspectors had the authority to make unannounced inspections and initiate sanctions.While all formal workers were entitled to social security, there were reports that both public- and private-sector employers failed to pay into the social security system.  The Ministry of Labor could levy a fine against companies that failed to pay social security obligations, but the amount was not sufficient to deter violations.According to 2021 Ministry of Labor data, approximately 75 percent of workers worked in the informal economy.  The government did not enforce the labor laws in this sector since these workers were not protected by the labor code.																																				    							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Respect for the Integrity of the Person																																							a. Arbitrary Deprivation of Life and Other Unlawful or Politically Motivated Killings																																																						b. Disappearance																																																						c. Torture and Other Cruel, Inhuman, or Degrading Treatment or Punishment, and Other Related Abuses																																																				Prison and Detention Center Conditions																																																																																				d. Arbitrary Arrest or Detention																																																				Arrest Procedures and Treatment of Detainees																																																																																				e. Denial of Fair Public Trial																																																				Trial Procedures																																												Political Prisoners and Detainees																																																																																				f. Transnational Repression																																																						g. Property Seizure and Restitution																																																						h. Arbitrary or Unlawful Interference with Privacy, Family, Home, or Correspondence																																																			Section 2. Respect for Civil Liberties																																							a. Freedom of Expression, Including for Members of the Press and Other Media																																																				Internet Freedom																																																																																				b. Freedoms of Peaceful Assembly and Association																																																				Freedom of Peaceful Assembly																																																																																				c. Freedom of Religion																																																						d. Freedom of Movement and the Right to Leave the Country																																																						e. Protection of Refugees																																																						f. Status and Treatment of Internally Displaced Persons (IDPs)																																																			Section 3. Freedom to Participate in the Political Process																																							Elections and Political Participation																																																			Section 4. Corruption in Government																Section 5. Governmental Posture Towards International and Nongovernmental Monitoring and Investigation of Alleged Abuses of Human Rights																Section 6. Discrimination and Societal Abuses																																							Women																																																						Systemic Racial or Ethnic Violence and Discrimination																																																						Indigenous Peoples																																																						Children																																																						Antisemitism																																																						Trafficking in Persons																																																						Acts of Violence, Criminalization, and Other Abuses Based on Sexual Orientation, Gender Identity or Expression, or Sex Characteristics																																																						Persons with Disabilities																																																						Other Societal Violence or Discrimination																																																			Section 7. Worker Rights																																							a. Freedom of Association and the Right to Collective Bargaining																																																						b. Prohibition of Forced or Compulsory Labor																																																						c. Prohibition of Child Labor and Minimum Age for Employment																																																						d. Discrimination (see section 6)																																																						e. Acceptable Conditions of Work																																																									Tags																					Bureau of Democracy, Human Rights, and Labor																								Bureau of Western Hemisphere Affairs																								Honduras
- Honduran national gets 50 years for kidnapping and raping 15-year-old For Immediate Release – December 4, 2023Click here to read more about this&nbsp;
- New Listings Under the Section 353 Corrupt and Undemocratic Actors Report Matthew Miller, Department SpokespersonThe United States today announced new listings of four Nicaraguan, four Guatemalan, three Honduran, and three Salvadoran individuals under the Section 353 Corrupt and Undemocratic Actors report.&nbsp;This report, published in the Federal Register, identifies individuals who have knowingly undermined democratic processes or institutions, engaged in significant corruption, or obstructed investigations into such acts of corruption in Guatemala, Honduras, Nicaragua, and El Salvador.&nbsp; Consistent with Section 353 of the United States–Northern Triangle Enhanced Engagement Act, as amended, persons on the list are generally ineligible for visas and admission to the United States.&nbsp;&nbsp;&nbsp;Promoting strong democratic governance in the region is a priority under the Administration’s Root Causes Strategy.&nbsp; Corruption and other practices that undermine democracy in Central America lead to instability and drive irregular migration.&nbsp;&nbsp;In El Salvador, Honduras, Guatemala, and Nicaragua, we work to promote, preserve, and restore democratic norms to build a more resilient, equitable, and prosperous hemisphere.&nbsp; We do this by tapping into a diverse set of accountability tools.&nbsp;We call on all government leaders, civil society, journalists, the private sector, and the international community to join us in strengthening democratic governance and ending corruption.The Secretary of State transmitted this report to Congress under Section 353 of the United States–Northern Triangle Enhanced Engagement Act, as amended. This report can be found on the Department&#8217;s Section 353 Report website.						Tags																																											Anti-Corruption and Transparency																															Bureau of Democracy, Human Rights, and Labor																								Bureau of Western Hemisphere Affairs																																Corruption																																							Democracy																															El Salvador																								Guatemala																								Honduras																								Nicaragua																								Office of the Spokesperson
- Taking Steps to Impose Visa Restrictions in Response to Violent Anti-Democratic Actions in Honduras Matthew Miller, Department SpokespersonThe United States condemns the recent use of violence in Honduras to undermine democracy and enable the irregular and unprecedented naming of an interim Attorney General and interim Deputy Attorney General.Today, we are taking steps to impose visa restrictions on certain individuals under Section 212(a)(3)(C) of the Immigration and Nationality Act.  A number of these individuals carried out acts of violence and intimidation, and others fomented conflict among the Honduran people by calling on violent groups to mobilize, resulting in physical attacks and acts of intimidation, some of which resulted in injuries.These anti-democratic actions undermine Honduras’ institutions and are inconsistent with the core principles of the Inter-American Democratic Charter, which Honduras signed as a member of the Organization of American States in September 2001.  We join the international community’s call for regular order to be restored via peaceful, transparent, and democratic means.   The United States stands with the Honduran people and those seeking to strengthen democracy and rule of law in Honduras, and we remain committed to promoting accountability for those who undermine it.NOTE: Visa records are confidential under section 222(f) of the INA; individual applications of INA section 212(a)(3)(c) cannot be disclosed publicly. 
- Honduran national convicted after cross-country trip against minor’s will For Immediate Release &#8211; August 24, 2023Click here to read more about this &nbsp;
- Indigenous Youth Leadership Coalition Launches with Arrival of Inaugural Cohort HomeOffice of the SpokespersonPress Releases&#8230;Indigenous Youth Leadership Coalition Launches with Arrival of Inaugural Cohort				hide		if(window.jQuery) {		jQuery( document ).ready(function() {			if (jQuery(".bc_middle").hasClass("collapse")) {				jQuery(".bc_ellipse").click(function(){					jQuery(".bc_hide").toggleClass("visible");					jQuery(".bc_middle").toggle();					jQuery(".bc_ellipse").toggle();					jQuery(".bc_content").toggleClass("noflex");					jQuery(".block_breadcrumbs_content").toggleClass("noflex");				});				jQuery(".bc_hide").click(function(){					jQuery(".bc_hide").toggleClass("visible");					jQuery(".bc_middle").toggle();					jQuery(".bc_ellipse").toggle();					jQuery(".bc_content").toggleClass("noflex");					jQuery(".block_breadcrumbs_content").toggleClass("noflex");				});			} else {				jQuery(".bc_ellipse").hide();			}		});	}																										Indigenous Youth Leadership Coalition Launches with Arrival of Inaugural Cohort																																		Media Note																														November 6, 2023																																							The U.S. Department of State created the&nbsp;Indigenous Youth Leadership Coalition (IYLC)&nbsp;as&nbsp;a new network to&nbsp;elevate the voices of&nbsp;Indigenous youth&nbsp;into&nbsp;global civic and political participation&nbsp;conversations.Six Indigenous&nbsp;young&nbsp;leaders from the Western Hemisphere&nbsp;launched&nbsp;the network as the inaugural cohort.&nbsp;&nbsp;The participants are visiting Washington, D.C. from November 6-9 to participate in the White House Tribal Youth Forum alongside Native American youth leaders.&nbsp;The Tribal Youth Forum shares effective practices with Native youth leaders, enabling them to share their perspectives with U.S. policy makers on critical issues such as preserving Indigenous knowledge and languages, climate resilience, and health.In addition to participating in the White House Tribal Youth Forum, the IYLC cohort will participate in meetings with State Department officials, civil society, and U.S. Tribal leaders during their visit.  These engagements will lay the groundwork for follow-on IYLC virtual activities through September 2024.The six IYLC participants include:Maricelma Francelino Fialho Cândido &#8211; BrazilMaricelma is an Indigenous Terena woman from the Pantanal region, the world&#8217;s largest wetlands. She&#8217;s a biomedical professional specializing in infectious diseases with a focus on neglected rural Indigenous communities and a master&#8217;s student at the Federal University of Mato Grosso do Sul. She&#8217;s also a treasurer at the Intercultural Terena Education Institute and part of Mission Brazil&#8217;s Access E2C program.Daisy Lahache &#8211; CanadaBorn and raised on Kahnawake Mohawk Reserve in Quebec, Daisy is an artist, model, and the founder of the Healing Arts Project.&nbsp; Her art, including beadwork, mixed media, and sculpture, champions Mohawk arts and culture.&nbsp; She actively participates in Kahnawake&#8217;s youth governance and was invited to the Iroquois Confederacy Caucus.&nbsp; She is a passionate advocate for Indigenous representation and inclusion, proudly embracing her Mohawk heritage as a voice for youth and artists.Noamby Lucas-Castillo – ColombiaNoamby is an Indigenous&nbsp;Zenú&nbsp;person from the Cabildo Menor of&nbsp;Tuchín-Urbano in Córdoba, Colombia.&nbsp; She is the first&nbsp;Zenú&nbsp;Indigenous person to attend and graduate from the University of Los Andes with a degree in law.&nbsp; She currently serves as a Judicial Assistant at the Tribunal for Peace in the Special Jurisdiction for Peace (JEP), a legal advisor for the rights of Indigenous women facing gender-based violence, and a volunteer with the Court of Justice of the&nbsp;Zenú&nbsp;People.&nbsp;Edna Marly Figueroa Cuc&nbsp;–&nbsp;GuatemalaEdna is a&nbsp;Q&#8217;eqchi&#8217; Indigenous sociolinguist and translator from the Guatemalan department of&nbsp;Cobán&nbsp;and the current Indigenous Queen of Abya Yala (America).&nbsp;&nbsp;She is the founder of the digital project on Facebook “Let&#8217;s Learn&nbsp;Q&#8217;eqchi&#8217; with Edna.”&nbsp;&nbsp;Edna teaches the&nbsp;Q&#8217;eqchi&#8217; language at&nbsp;JovenGo, a Central American youth organization&nbsp;working with&nbsp;isolated youth.&nbsp;&nbsp;She currently&nbsp;creates digital literacy&nbsp;materials in Mayan languages at the New Sun Road Guatemala School&nbsp;and empowers&nbsp;Indigenous women&nbsp;through&nbsp;technology.Silvia Alejandra Miranda Loredo &#8211; HondurasSilvia is a law school student at the National Autonomous University of Honduras and a paralegal. She is a Study of U.S. Institutes Alumni, Generation Change Fellow at the United States Institute of Peace, and a trainer at the Generation Change Fellows Program in Guatemala.&nbsp; As a founder of the Women with Power Foundation, Silvia has made significant contributions to women empowerment, education, and peacebuilding in Honduras.&nbsp; Her dedication to law, love for languages, leadership, and mission to serve others has made her an asset to empower others in her Garifuna ethnic community.Josefina Bautista Peña – MexicoJosefina is an Indigenous woman from&nbsp;Zacapoaxtla.&nbsp; She is both a native&nbsp;Náhuatl&nbsp;speaker and speaks and writes in Totonac.&nbsp; She was a reporter for the communal radio program “Tsinaka” and returned to her former high school to teach Indigenous and&nbsp;Náhuatl&nbsp;philosophy and became a part of the Academic Directive Council.&nbsp; Through her service, she strengthens educational programs from a&nbsp;Náhuatl&nbsp;community perspective and empowers girls and womenFor more information about the IYLC, please contact&nbsp;DRL-Press@state.gov.						Tags																					Brazil																								Bureau of Democracy, Human Rights, and Labor																								Canada																								Colombia																								Guatemala																								Honduras																																														Human Rights and Democracy																															Mexico																								Office of the Special Representative for Racial Equity and Justice																								Office of the Spokesperson																																Racial Equity and Justice																																							Youth Programs
- Honduras National Day Antony J. Blinken, Secretary of StateOn behalf of the United States of America, it is my pleasure to wish the people of Honduras a joyous celebration of the 202nd anniversary of your independence on September 15. Honduras and the United States share a deep and enduring relationship and strong cultural and family ties.The United States will continue to support Honduras in promoting economic growth and prosperity, strengthening democratic institutions, and fighting corruption and transnational crime. We look forward to our continued partnership, and I congratulate all Hondurans on this momentous occasion.
- The United States Is Providing $30 Million to Build Healthy, Fertile Soils as Part of VACS &#8220;The truth is that soil is literally at the root of many pressing national security challenges that we face&#8230; Without good soil, crops fail, prices rise, people go hungry.&#8221;Secretary BlinkenWorld Economic Forum &#8211; January 16, 2024The United States and the Food and Agricultural Organization of the UN continue to lead on tackling global food insecurity by partnering on a project that invests in helping farmers simultaneously improve soil health and crop production by providing access to better soil information through easy-to-use decision-making tools and applications.As part of the Vision for Adapted Crops and Soils, the United States is providing $30 million to FAO for the development of soil information systems in Guatemala, Honduras, Zambia, Ghana, and Kenya. Named SoilFER, the project will build and improve capacities in soil sampling, mapping, modelling and monitoring, as well as on soil and fertilizer analysis.Announced as part of Ukraine Supplementals Two ($20 million) and Four ($10 million), SoilFER builds on established advances made by the FAO Global Soil Partnership (GSP) secretariat to provide accurate soil information and data as well as a comprehensive set of tools and platforms for smallholder farmers and governments.SoilFER connects farmers to field-scale land use planning and crop suitability tools, which help farmers decide where and what to plant based on improved soil information. SoilFER also links growers to fertilizer recommendation tools, including those developed in collaboration with other institutions, which help farmers decide how to manage their farms during a particular year. The improved soil information can be used to inform decisions about how to manage, including for improved soil health.Collectively, these tools assist farmers’ decisions to improve fertilizer use efficiency and crop productivity, increasing incomes and improving livelihoods.SoilFER is implementing approximately $6 million in Guatemala, $6 million in Honduras, $8 million in Zambia, $6 million in Kenya, and $4 million in Ghana. This funding will strengthen smallholder agricultural production in these countries, mapping the soil needs, and providing technical assistance to farmers. With this assistance farmers will be able to improve soil fertility through more efficient use of fertilizer and water. This will support climate-smart agricultural practices, soil health and the use of resilient crops.The SoilFER projects are working to establish a self-sustaining, government-managed national framework and a functioning workflow for integrated soil nutrient and optimized fertilizer management.
- Honduras HomeReportsBureau of Economic and Business Affairs2023 Investment Climate Statements&#8230;Honduras				hide	document.addEventListener("DOMContentLoaded", function(event) {	if(window.jQuery) {		jQuery( document ).ready(function() {			if (jQuery(".bc_middle").hasClass("collapse")) {				jQuery(".bc_ellipse").click(function(){					jQuery(".bc_hide").toggleClass("visible");					jQuery(".bc_middle").toggle();					jQuery(".bc_ellipse").toggle();					jQuery(".bc_content").toggleClass("noflex");					jQuery(".block_breadcrumbs_content").toggleClass("noflex");				});				jQuery(".bc_hide").click(function(){					jQuery(".bc_hide").toggleClass("visible");					jQuery(".bc_middle").toggle();					jQuery(".bc_ellipse").toggle();					jQuery(".bc_content").toggleClass("noflex");					jQuery(".block_breadcrumbs_content").toggleClass("noflex");				});			} else {				jQuery(".bc_ellipse").hide();			}		});	}});																							2023 Investment Climate Statements: Honduras																																																																																												 In this section										/																							EXECUTIVE SUMMARY																																													EXECUTIVE SUMMARY																															1. Openness To, and Restrictions Upon, Foreign Investment																																																									Policies Towards Foreign Direct Investment																																																																											Limits on Foreign Control and Right to Private Ownership and Establishment																																																																											Other Investment Policy Reviews																																																																											Business Facilitation																																																																											Outward Investment																																																																																	2. Bilateral Investment and Taxation Treaties																															3. Legal Regime																																																									Transparency of the Regulatory System																																																																											International Regulatory Considerations																																																																											Legal System and Judicial Independence																																																																											Laws and Regulations on Foreign Direct Investment																																																																											Competition and Antitrust Laws																																																																											Expropriation and Compensation																																																																											Dispute Settlement																																																																											Investor-State Dispute Settlement																																																																											International Commercial Arbitration and Foreign Courts																																																																											Bankruptcy Regulations																																																																																	4. Industrial Policies																																																									Investment Incentives																																																																											Foreign Trade Zones/Free Ports/Trade Facilitation																																																																											Performance and Data Localization Requirements																																																																																	5. Protection of Property Rights																																																									Real Property																																																																											Intellectual Property Rights																																																																																	6. Financial Sector																																																									Capital Markets and Portfolio Investment																																																																											Money and Banking System																																																																											Foreign Exchange and Remittances																																																																			Foreign Exchange																																																								Remittance Policies																																																								Sovereign Wealth Funds																																																																																																																		7. State-Owned Enterprises																																																																			Privatization Program																																																																																																																								8. Responsible Business Conduct																																																									Climate Issues																																																																																	9. Corruption																															10. Political and Security Environment																															11. Labor Policies and Practices																															12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs																															13. Foreign Direct Investment Statistics																															14. Contact for More Information 																																																					EXECUTIVE SUMMARY				Honduras has many characteristics attractive to international and domestic investors: the close proximity to U.S. markets, legal protections and low tariffs provided under the Dominican Republic-Central American Free Trade Agreement (CAFTA-DR), a skilled labor pool with well organized labor unions, a rich endowment of natural resources, and productive agricultural zones. Investors report, however, that persistent uncertainty caused by security concerns, corruption, inadequate rule of law, expensive and unreliable electricity, problems with licensing and permitting, and deteriorating infrastructure continue to present significant challenges for enterprises of all sizes. According to the International Monetary Fund (IMF), real Honduran GDP grew by 4 percent in 2022 and IMF economists predict the economy will have grown by 3.7 percent by the end of 2023.The administration of Honduran President Xiomara Castro has continued to push forward with its plan to “re-found” the country, purporting to reign in the country’s systemic corruption and establish an economic system that benefits all Hondurans. Many of these efforts appear well intentioned, but investors report that the fast pace of legal and regulatory changes, persistent government messaging blaming the private sector for the country’s poverty and corruption, and lack of rigorous cost-benefit analysis underpinning economic policymaking has created a climate of uncertainty that has driven a decline in private investment and job creation.Many entrepreneurs and business owners, including more than 200 U.S. companies, operate thriving enterprises in Honduras, but nearly every company in contact with the Embassy has reported significant disruptions during the past year due to government policies such as the repeal of the regulatory framework allowing temporary per-hour employment, elimination of the public procurement infrastructure, and monetary and exchange rate policies that have led to widespread shortages of U.S. dollars in the highly import-dependent economy. Armed and frequently violent land invasions of private property are increasingly widespread throughout Honduras; the government recently announced the creation of a commission to resolve land disputes and enforce legal titles, which has created cautious optimism among private investors. Honduran businesses report continued problems in the electricity subsector, with many new businesses being refused hookups due to electricity shortages, and reliable service only possible through private generation. As of June 2023, the government started to implement a plan of scheduled blackouts to ration electricity throughout the country. Efforts to reform the subsector have not been successful – electricity remains prohibitively expensive and unreliable – and the loss-making state-owned utility continues to lose almost 40% of the electricity it generates to theft and technical losses, according to government data.As of June 2023, the National Assembly is debating a tax law that, if passed, would eliminate the country’s existing tax incentives for new investment, replacing them with two vaguely defined new structures. Many private business groups have publicly expressed concern that this law would negatively affect the investment climate, and the current debate has contributed to additional concern about the predictability of investment returns.The administration’s messaging on international trade has also been a source of uncertainty in the investment climate. Despite the potential benefits of CAFTA-DR to both Honduran exporters and consumers, President Castro has repeatedly made public statements that Honduras would seek to renegotiate the agreement. In the meantime, non-tariff measures have increased, which investors perceive to be directed largely against U.S.-sourced agricultural imports.Despite all of these challenges, there are still lucrative business and investment opportunities in Honduras, and many multinationals are expanding their footprint in the country. Potential investors considering projects in the country should nevertheless ensure their projected returns include an appropriate risk premium.																																					1. Openness To, and Restrictions Upon, Foreign Investment						    																																																Policies Towards Foreign Direct Investment										Honduras is generally open to foreign investment. The Castro administration has made public statements that it recognizes the importance of foreign investment to bring new opportunities, generate employment, and stimulate economic growth. At the same time, a number of senior officials in the Castro administration have pushed a narrative that the private sector is not contributing to the common good of the Honduran people. As a result, the business community reports that the administration’s economic policy reforms and rhetoric have led to an uncertainty undermining the investment climate.Many representatives from the international investment community say that the Castro administration’s policies have made the investment climate in Honduras less attractive. Some examples cited by the business community include the repeal of the hourly employment law in April 2022, under which all Honduran employees must now be salaried, eliminating flexible hiring practices vital for seasonal work; and a May 2022 energy law, which contains provisions that energy producers understand to authorize the expropriation of energy investments if the government is not able to renegotiate power-purchasing agreements. The status of the country’s special economic “ZEDE” zones remains unclear, with the legislative framework no longer in force but the constitutional framework remaining in place, which has contributed to uncertainty over the government’s commitment to investment protections.The legal framework for investment includes the Honduran constitution, the investment chapter of CAFTA-DR, and the 2011 Law for the Promotion and Protection of Investments. The Honduran constitution requires all foreign investment to complement, but not substitute for, national investment. Both the 2011 Law and CAFTA-DR guarantee national treatment and most favored nation treatment for U.S. investments in most sectors of the Honduran economy and include enhanced benefits in the areas of insurance and arbitration for domestic and foreign investors. In addition to liberalizing trade in goods and services, CAFTA-DR includes important requirements relating to investment, customs administration and trade facilitation, technical barriers to trade, government procurement, telecommunications, electronic commerce, intellectual property rights, transparency, and labor and environmental protection.The National Investment Council (CNI), the Ministry of Investment Promotion, the Ministry of Economic Development, the Ministry of Finance, and the Ministry of Strategic Planning all have equities in attracting foreign investment and an ambitious job creation mandate. None of the agencies, however, have broad authority to “fast track” foreign investment projects, meaning companies are often left navigating various government ministries with overlapping mandates and no clear interagency coordination. CNI was formed and operates under the Law for Protection and Promotion of Investments. Critics complain that lack of clarity and overlapping responsibilities among these entities undermine the government’s ability to effectively promote Honduras as a profitable destination for foreign capital. Representatives from the Honduran government have expressed a desire to consolidate investment promotion activities within one Ministry or develop a separate autonomous entity comprised of both government and private sector elements to promote investment in the country. Any reforms will require approval from the Honduran Congress which is unlikely in the near term. The GOH has not established a strategic investment policy with FDI objectives, which undermines efforts to attract new investment.There is no official process for investment retention nor dialoguing with the government about maintaining existing investments in Honduras. The government has not announced any new policies to host roundtables with the private sector to understand the challenges of doing business in Honduras. There is no formal mechanism for the public to comment on proposed economic reforms, but the national congress did meet with a broad representation of civil society and the private sector to socialize the draft tax reform law. It remains unclear the extent to which private sector and civil society feedback will be incorporated into the bill.																																				Limits on Foreign Control and Right to Private Ownership and Establishment										Honduras’ Investment Law does not limit foreign ownership of businesses, except for those specifically reserved for Honduran investors, including small firms with capital less than $6,300 and the domestic air transportation industry. For all investments, at least 90 percent of a company’s labor force must be Honduran, and companies must pay at least 85 percent of their payrolls to Hondurans. Majority ownership by Honduran citizens is required for companies in the commercial fishing sector, forestry, local transportation, radio, television, or benefiting from the Agrarian Reform Law. There is no screening or approval process specific to foreign direct investments in Honduras. Foreign investors are subject to the same requirements for environmental and other regulatory approvals as domestic investors.According to the law, investors can establish, acquire, and dispose of enterprises at market prices under freely negotiated conditions without government intervention, but some foreign business operators report difficulty closing businesses. Private enterprises generally compete fairly with public enterprises on market access, credit, and other business operations. Foreign investors have the right to own property, subject to certain restrictions established by the Honduran constitution and several laws relating to property rights. Investors may acquire, profit, use, and dispose of property ownership with the exception of land within 40 kilometers of international borders and shorelines. Honduran law does permit, however, foreign individuals to purchase properties close to shorelines in designated “tourism zones.”There is currently no process for the government to screen inbound foreign direct investment. There is also no formal process for the government to identify strategic projects that would require additional review before approving foreign investment.																																				Other Investment Policy Reviews										There have been no third-party investment policy reviews by a multilateral organization or civil society organizations over the past year. The last WTO trade review was conducted in 2016. The Inter-American Development Bank recently supported a study of designing a new investment promotion system for Honduras though it is unclear if the GOH will adopt any of the conclusions of the study.																																				Business Facilitation										The GOH has worked to simplify administrative procedures for establishing a company in recent years, including by offering many processes online. For example, the Ministry for Economic Development launched a single window portal for registering a firm to operate within a free trade zone. The effort was completed with input from the private sector groups representing Honduras’ manufacturing sector and utilizing a model developed by the UN Development Program. GOH officials have expressed interests in expanding the digitalization of business, import, permitting and licensing, and taxation processes across the government to increase efficiency and transparency. Currently, procedural red tape and/or the solicitation of bribes to obtain government approval for investment activities remains common, especially at the local level.The GOH maintains several online business registration portals. Small- and medium-sized enterprises may use ( https://honduras.eregulations.org/ ) which provides clear step-by-step information on registering a business, including fees, agencies, and required documents. Unless the proposed tax reform bill passes, eliminating Free Trade Zones (ZOLIs) for new investment, companies seeking to operate in the ZOLIs may use the following portal:  https://gobiernodigital.gob.hn  GOH procurement notices, conducted by the Oficina Normativa de Contratación y Adquisiciones del Estado de Honduras (ONCAE). can be found at:  https://honducompras.gob.hn  																																				Outward Investment										Honduras does not promote or incentivize outward investment. The government also does not restrict domestic investors from investing abroad.																																												2. Bilateral Investment and Taxation Treaties						    																						A Bilateral Investment Treaty (BIT) between the United States and Honduras entered into force in 2001. The U.S.-Honduras Treaty of Friendship, Commerce and Consular Rights (1928) provided for Most Favored Nation treatment for investors of either country. CAFTA-DR supersedes most provisions of these agreements.Provisions for investment are included in free trade agreements between Honduras and the United States, Canada, Chile, Costa Rica, El Salvador, Guatemala, Mexico, Nicaragua, Panama, Peru, the Dominican Republic, Colombia, South Korea, and the European Union. These agreements supersede many of the provisions of Honduras’ separate Bilateral Investment Treaties with these countries.Honduras also has separate Bilateral Investment Treaties with Cuba, Ecuador, France, Germany, Spain, Kuwait, the United Kingdom, the Netherland, the Republic of Korea and Switzerland. Honduras maintains a Preferential Commercial Agreement with Venezuela.Following the GOH’s decision to recognize the People’s Republic of China in March 2023, Honduran exporters to Taiwan reported that GOH rescinded their certificates of origin, which are needed for importing into Taiwan under the Free Trade Agreement between Honduras and Taiwan.Honduras and the United States signed a Tax Information Exchange Agreement in 1990. In 2014, Honduras and the United States signed the Foreign Account Tax Compliance Act. Honduras is a member of the OECD Inclusive Framework on Base Erosion and Profit Shifting and is party to the Inclusive Framework’s October 2021 agreement on the global minimum corporate tax. The official tax authority for Honduras is the Servicio de Administración de Rentas, or SAR.																																		3. Legal Regime						    																																																Transparency of the Regulatory System										The GOH had made progress towards developing digital single windows to consolidate the application and approval process, for example, for firms registering in a free trade zone. These steps have allowed for greater transparency in the regulatory system. Both U.S. and Honduran firms, however, cite concerns regarding transparent policies and effective laws to foster market-based competition. In many cases the “rules of the game” are not clear to outside investors. This can be due to do overly complex and sometime overlapping authorities given to multiple GOH entities to approve permits for foreign investors. Ongoing issues relating to corruption also hinder transparent investment opportunities. Honduras lacks an indexed legal code so lawyers and judges must maintain their own libraries of law publications. While the majority of regulations are at the national level, municipal level regulations also exist and vary considerably in terms of responding to foreign investment permitting requirements.Foreign investments in the mining, energy, healthcare, telecommunications, air transportation, agriculture, forestry, and education sectors generally require approval from the GOH via permits. Some U.S. investors have reported long waiting periods for environmental permits and other regulatory and legislative approvals. Sectors in which U.S. companies frequently encounter problems include infrastructure, telecoms, mining, and energy. Generally, companies report that regulatory requirements are complex and lengthy and vulnerable to rent-seeking and [perceived] corruption due to weak institutions. Regulatory approvals require congressional intervention if the time exceeds a presidential term of four years. Current regulations are available at the Honduran government’s eRegulations website ( http://honduras.eregulations.org/ ).There is no legal requirement for the government to solicit public comment on proposed regulatory changes or legal reforms. It is generally understood that a legal or regulatory change does not take effect until the GOH publishes approved regulations in the official government Gazette, which represents the centralized location for legislative and regulatory actions. Public comments received by regulators are not published. The government does not promote or require companies’ environmental, social, and governance (ESG) disclosure to facilitate transparency and/or help investors and consumers distinguish between high- and low-quality investments. In general, Honduras does have a system that allows for a systematic approach to developing government regulations. Regulations, however, are not always developed transparently and with input from the private sector or civil society groups.CAFTA-DR requires that host governments publish proposed regulations that could affect businesses or investments. Honduras made significant progress in 2019 and 2020 in relation to the publication and availability of information under CAFTA-DR. Honduras notified Article 1 technical provisions, per CAFTA-DR requirements, and the Customs Administration (ADUANAS) and Sanitary Regulatory Agency (ARSA) have improved publication of regulations through their official online portals.																																				International Regulatory Considerations										Honduras is a member of the Central American System of Integration (SICA in Spanish), along with Costa Rica, El Salvador, Guatemala, Nicaragua, Panama, Belize, and the Dominican Republic. Under SICA’s Secretariat for Economic Integration (SIECA in Spanish), Honduras and Guatemala negotiated a customs union in 2017. SIECA is also supporting the expansion of this customs union to include El Salvador. Article 335 of the Honduran Constitution states that “The State shall order its external economic relations on the basis of fair international cooperation, Central American economic integration, and respect for the treaties and agreements it signs, insofar as they are not opposed to the national interest.” As a member of the WTO, Honduras notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).																																				Legal System and Judicial Independence										Honduras has a civil law system. The Honduran Commercial Code, enacted in 1950, regulates business operations and falls under the jurisdiction of the Honduran civil court system. The Civil Procedures Code, which entered into force in 2010, introduced the use of open, oral arguments for adversarial procedures. The Civil Procedures Code provides for protection of commercial transactions, property rights, and land tenure. It also established a process for the enforcement of rulings issued by foreign courts.Commercial law and contractual law are regulated through the 1950 Commercial Code and the 1909 Civil Code. There are civil courts where commercial cases are tried. There are also arbitration chambers where issues regarding contracts with an arbitration clause may be resolved.In theory, the judicial system operates independently of the executive branch. However, the Honduran National Congress recently elected 15 new Supreme Court Justices to seven-year terms, naming a relative of President Castro as the new President of the Supreme Court. President Castro’s party, the Liberty and Refoundation Party (LIBRE), selected six of the new judges, while the National Party chose five magistrates and the Liberal Party picked four. There are frequent reports of corruption within the judicial branch, especially in local courts. U.S. firms report favoritism, external pressure, and the solicitation of bribes within the judicial system. Resolving an investment or commercial dispute in the local Honduran courts is often a lengthy process. Foreign investors report dispute resolution typically involves multiple appeals and decisions at different levels of the Honduran judicial system. Each decision can take months or years, and it is usually not possible for the parties to predict the time required to obtain a decision. An electronic case management system has recently been introduced with US Government support to increase transparency and reduce corruption. This system is gradually being rolled out to the different courts. Final decisions from Honduran courts or from arbitration panels often require subsequent enforcement from lower courts to take effect, requiring additional time. Foreign investors sometimes prefer to resolve disputes with suppliers, customers, or partners out of court when possible. Investors report a very high-quality mechanism for alternate dispute resolution. Legislative decree (N°51-2011) Law for Promotion and Protection of Investments promotes solving disputes between investors through mediation, conciliation, and arbitration prior to using the judicial system.																																				Laws and Regulations on Foreign Direct Investment										Honduras’ Investment Law requires all local and foreign direct investment be registered with the National Investment Council. Upon registration, the Investment Office issues certificates to guarantee international arbitration rights under CAFTA-DR. An investor who believes the government has not honored a substantive obligation under CAFTA-DR may pursue CAFTA-DR’s dispute settlement mechanism, as detailed in the Investment Chapter. The claim’s proceedings and documents are generally open to the public.The Government of Honduras requires authorization for both foreign and domestic investments in the following areas:Basic health servicesTelecommunicationsGeneration, transmission, and distribution of electricityAir transportFishing, hunting, and aquacultureExploitation of forestry resourcesAgricultural and agro-industrial activities exceeding land tenancy limits established by the Agricultural Modernization Law of 1992 and the Land Reform Law of 1974Insurance and financial servicesInvestigation, exploration, and exploitation of mines, quarries, petroleum, and related substances.The Government of Honduras offers one-stop business set-up at its My Business Online website, which helps domestic and international investors submit initial business registry information and provides step-by-step instructions. (  https://www.miempresaenlinea.org/ ) However, formalizing a business still requires visiting a municipal chamber of commerce window for registration and permits, a process vulnerable to rent-seeking and corruption.																																				Competition and Antitrust Laws										The Commission for the Defense and Promotion of Competition (CDPC) is the Honduran government agency that reviews proposed transactions for competition-related concerns. Honduras’ Competition Law established the CDPC in 2005 as part of the effort to implement CAFTA-DR. The Honduran Congress appoints the members of the CDPC, which functions as an independent regulatory commission.Laws that grant sole companies exclusive distribution rights for imported goods have created artificial monopolies in Honduras, hindering the availability and raising the price of imported goods in the Honduran market.																																				Expropriation and Compensation										The Honduran government has the authority to expropriate property for purposes of land reform or public use. The National Agrarian Reform Law provides that idle land fit for farming can be expropriated and awarded to indigent and landless persons via the Honduran National Agrarian Institute. In 2013, the Honduran government passed legislation regarding recovery and reassignment of concessions on underutilized assets. Both local and foreign firms have expressed concerns that the law does not specify what the government considers “underutilized.” The government has not published implementing regulations for the law nor indicated plans to use the law against any private sector firm.The May 2022 energy law contains provisions (articles 4 through 6) that authorize the GOH to terminate contracts or acquire power plants for an undefined “fair price” either when the GOH and the power plant owner are unable to agree on a renegotiated Power Purchase Agreement in certain sectors or when the GOH determines, among other factors, that doing so will be in the public interest “for reasons of national security.” Honduran legal experts and energy producers are concerned that this law could give the GOH broad authority to expropriate private power plants.Government expropriation of land owned by U.S. companies is rare. CAFTA-DR’s Investment Chapter Section 10.7 states no party may expropriate or nationalize a covered investment either directly or indirectly, with limited public purpose exceptions that require prompt and adequate compensation. Under the Agrarian Reform Law, the Honduran government must compensate expropriated land partly in cash and partly in 15-, 20-, or 25-year government bonds. The portion to be paid in cash cannot exceed $1,000 if the expropriated land has at least one building and it cannot exceed $500 if the land is in use but has no buildings. If the land is not in use, the government will compensate entirely in 25-year government bonds.Land invasions by squatters on both Honduran and foreign-owned land are increasingly common, especially in agricultural areas. These invasions have grown more frequent and severe in 2023, frequently leading to violent confrontations. Owners of disputed land have found pursuing legal avenues costly, time consuming, and ineffective at enforcing property rights.																																				Dispute Settlement										Honduras is a member state to the International Centre for the Settlement of Investment Disputes (ICSID) Convention. Honduras has also ratified the convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention) and the Inter-American Convention on International Commercial Arbitration (the Panama Convention).																																				Investor-State Dispute Settlement										CAFTA-DR provides dispute settlement procedures between the United States and Honduras. The agreement’s Investment Chapter dispute settlement mechanism allows an investor who believes the government has not honored a substantive obligation under CAFTA-DR to request a binding international arbitration. Proceedings and documents submitted to substantiate the claim are generally open to the public. The agreement provides basic protections, such as non-discriminatory treatment, limits on performance requirements, the free transfer of funds related to an investment, protection from expropriation other than in conformity with customary international law, a minimum standard of treatment, and the ability to hire key managerial personnel regardless of nationality.Over the past 10 years, there have also been a number of commercial disputes brought by U.S. persons or firms that remain unresolved. While many of these cases remain in litigation, others are pending final agreements between the Honduran government (GOH) and U.S. parties. The GOH office of the Procurador General of Honduras (Solicitor General) has been willing to meet with U.S. persons and firms to negotiate a resolution to these outstanding cases, but the negotiations are often slow and delayed, or even unilaterally terminated by GOH authorities.																																				International Commercial Arbitration and Foreign Courts										Honduras’ Conciliation and Arbitration Law, established in 2000, outlines procedures for arbitration and defines the procedures under which they take place. The Investment Law permits investors to request arbitration directly, a swifter and more cost-effective means of resolving disputes between commercial entities. Arbitrators and mediators may have specialized expertise in technical areas involved in specific disputes. Local courts recognize and enforce foreign arbitral awards issues against the government. Judgements from foreign courts are recognized and enforceable under local courts.The following organizations provide more localized information:Tegucigalpa Chamber of Industry and Commerce – Center for Conciliation and ArbitrationCortes Chamber of Industry and Commerce – Center for Conciliation and ArbitrationThe Atlantida Chamber of Industry and Commerce – Center for Conciliation and ArbitrationThe Honduran Bar Association – Center for Conciliation and ArbitrationNumerous U.S. and other international investors say they strongly prefer taking advantage of international or local alternative dispute resolution mechanisms because the Honduran judicial system can be inefficient, lacks transparency, and is subject to political influence and/or corruption.  International donors have been working with the Honduran judiciary and prosecutors to try to improve the capabilities, effectiveness, and transparency of the justice system.																																				Bankruptcy Regulations										Companies that default in payment of their obligations in Honduras can declare bankruptcy. A Honduran court must ratify a bankruptcy for it to take effect. These cases are regulated by the country’s Commercial Code.The judicial ruling that declares the bankruptcy of the company establishes the value of the assets, the recognition and classification of the credits, the procedure for the sale of assets and the schedule for the payment of the obligations, in the case that it is not possible for the company to continue its operations. The ruling must be published in the Gazette. The liquidation of companies is always a judicial matter, except in the case of banking institutions which are liquidated by the National Banking and Insurance Commission.Any creditor or a company itself may initiate the liquidation procedure, which is generally a civil matter. The judge appoints a liquidator to execute the procedure. A mechanism that a company may exercise to prevent bankruptcy is to request a suspension of payments from the judge. If approved by the judge and the creditors, the company may be able to reach an agreement with its creditors that allows the same administrative board to maintain control of the company.A company may be prosecuted for fraudulently declaring bankruptcy in the case that the administrative board or shareholders withdraw their assets before the declaration, alter accounting books making it impossible to determine the real situation of the company, or favor certain creditors granting them benefits that they would not be entitled to otherwise.																																												4. Industrial Policies						    																																																Investment Incentives										Honduras has historically offered numerous tax incentive programs that, depending on the type of business, exempt income, sale, and/or municipal taxes in addition to customs duties. The Castro administration is actively seeking, however, to eliminate these regimens and replace them with more limited new tax incentives.One example of these pre-existing tax incentives is laid out in the 2017 Tourism Incentives Law, which offers tax exemptions for national and international investment in tourism development projects. The law provides income tax exemptions for the first 10 years of a project and permits the duty-free import of goods needed for a project, including publicity materials. To receive benefits, a business must be located in a designated tourism zone. Restaurants, casinos, nightclubs, movie theaters, and certain other businesses are not eligible for incentives under this law. Foreigners or foreign companies seeking to purchase property exceeding 3,000 square meters for tourism or other development projects in designated tourism zones must present an application to the Ministry of Tourism. The buyer must prove a contract to purchase the property exists and present feasibility studies and plans about the proposed tourism project. The Castro administration’s proposed tax reform, pending in the National Assembly as of June 2023, would eliminate this law for new investment.																																				Foreign Trade Zones/Free Ports/Trade Facilitation										The Honduran government historically has offered four primary tax-advantaged structures to incentivize investment in Honduras: the Free Trade Zone (ZOLI), the Free Tourism Zone (ZOLT), the Industrial Zone for Export Processing (ZIP) and the Temporary Import Law (RIT). The GOH is no longer granting ZOLT and ZIP licenses, according to the Honduran National Investment Council. All of these tax regimes will be eliminated if the Castro administration successfully passes its tax reform package. In their place, the administration proposes to create two tax-exonerated structures: Free-Trade Zones (Zonas Francas) for firms that export their products, and the “Incentive Regime for Investment Development” (RINDE in Spanish) for firms producing for the domestic market.As long as they continue to exist, both ZOLIs and ZIPs allow foreign investors tariff and tax incentives for export-only manufacturing. The following cities have been designated as free zones: Puerto Cortes, Omoa, Choloma, Tela, La Ceiba, and Amapala. The government historically allowed the establishment of ZIPs anywhere in the country. Currently, there are ZIPs located in Choloma, Buffalo, La Lima, San Pedro Sula, Tegucigalpa, and Villanueva. Companies operating in ZIPs are exempt from paying import duties and other charges on goods and capital equipment. The RIT allows exporters to introduce raw materials, parts, and capital equipment (except vehicles) into Honduras exempt from surcharges and customs duties if a manufacturer incorporates the input into a product for export (up to five percent can be sold locally).  Both government and private sector representatives acknowledge that many companies sell much more than five percent of their product on local markets in violation of ZIP and RIT rules, a key driver of the Castro government’s desire to reform the regime. Additional information on these incentive programs is available from the National Investment Council ( https://www.cni.hn/ ).In April 2022, the Castro administration and Honduran Congress repealed the legislative framework that established Honduras’ Zones for Employment and Economic Development (ZEDEs), the largely autonomous economic zones created by the Honduran National Congress in 2013. The Constitutional basis for the ZEDEs, however, remains in force and ZEDEs continue to operate, although with substantially increased regulatory uncertainty. In December 2022, the owners of one ZEDE brought a $10.7 billion claim under the CAFTA-DR at ICSID alleging that the government’s actions, including the repeal of the ZEDE law, were in breach of obligations under the CAFTA-DR and other instruments, which is currently pending. U.S. and local investors expressed concern that the GOH’s and the ZEDE owner’s inability to agree on basic terms necessary to begin negotiations on resolving their dispute is an indication of a weakening investment climate.Honduras ratified the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA) in July 2016, agreeing to expedite the movement, release, and clearance of goods, including goods in transit. The TFA also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. According to the WTO/TFA database, Honduras’ current rate of implementation of TFA Category A notification commitments stands at 58.4 percent. The Honduran government has received significant technical assistance from the U.S. government to meet compliance requirements in publication, notification, advance rulings, border agency cooperation, and establishing a national trade facilitation committee. Honduras, Guatemala, and El Salvador operate a trilateral customs union to foster and increase efficient cross-border trade, but implementation challenges persist.  Honduras uses digitized import permits for agricultural products to reduce costs and dispatch times. Honduras and Guatemala also use an online pre-arrival screening protocol to reduce border times and transit costs for goods.With U.S. support, the GOH has advanced several initiatives to facilitate trade and reduce dispatch times and costs at key land and sea borders. Use of high-spec tablets by Aduanas (Customs) at Puerto Cortes has reduced dispatch times by over 30 percent and generated over $15 million in savings for private sector operators. Expansion of high-spec tablet use is envisioned to El Amatillo (land border with El Salvador) La Mesa as well (San Pedro Sula airport Customs). A streamlined inspections manual to be adopted by Aduanas and the National Health and Agrifood Safety Entity (SENASA), as well as additional IT developments to integrate Aduanas and SENASA inspection systems, will further compound time and cost reductions at key land and border crossings. Honduran government agencies charged with inspecting and clearing agricultural, processed food, and medicinal products have also made progress towards expediting the import clearance process and have introduced online portals for obtaining import permits, through U.S. assistance.Many U.S. companies that operate in Honduras take advantage of the commercial framework established by the Central American and Dominican Republic Free Trade Agreement (CAFTA-DR).  Substantial intra-industry trade now occurs in textiles and electrical machinery, alongside continued trade in traditional Honduran exports such as coffee and bananas.																																				Performance and Data Localization Requirements										The Honduran government encourages foreign investors to hire locally and to make use of domestic content, especially in manufacturing and agriculture. Article 137 of the Honduran Constitution requires that at least 90 percent of employees be Honduran citizens and that those employees receive no less than 85 percent of total payroll. The government looks favorably on investment projects that contribute to employment growth, either directly or indirectly. U.S. investors in Honduras have not reported instances in which the government has imposed performance or localization requirements on investments.The Honduran government and courts can require foreign and domestic investors that operate in Honduras to turn over data for use in criminal investigations or civil proceedings. Honduran law enforcement, prosecutors, and civil courts have the authority to make such requests.																																												5. Protection of Property Rights						    																																																Real Property										Land title procedures in Honduras are reportedly particularly challenging for U.S. investors, given the overlapping authorities within the GOH and a paper-based titling process where archived files are often difficult to locate and authenticate, thereby making is difficult to confirm the true title holder. Title insurance is available in Honduras, though not widely purchased. U.S. investors should take steps to only work with accredited legal and real estate professionals when conducting property transactions.Land invasions in Honduras have continued to increase year on year, reaching a crisis point in much of the country. Many American companies struggle with land invasions by armed criminal groups and report poor response from local authorities and law enforcement to these incursions. Business representatives complain that the central government and Public Ministry have made little or no effort to resolve these disputes.Resolution of property disputes in court often takes years. There are claims of widespread corruption in land sales, deed filing, and dispute resolution, including claims against attorneys, real estate companies, judges, and local officials. Although Honduras has made some progress, the property registration system is perceived as unreliable and a constraint on investment. In addition, a lack of implementing regulations leads to long delays in the awarding of titles in some regions.Previous estimates are that approximately 80 percent of the privately held land in the country is either untitled or improperly titled. The national property registry is managed by the Property Institute, though property survey information is managed by the Survey Institute. These two registries have not always aligned, leading to legal disputes regarding property. Steps are currently being taken to reconcile both lists. However, if a person has uninterrupted and peaceful possession of a property for more than 20 years, he or she may, without just title, request the acquisitive prescription of said property in court.Honduran law recognizes secured interests in movable and real property. The Chamber of Commerce and Industry of Tegucigalpa (CCIT), the Chamber of Commerce and Industry of Cortes (CCIC), and the Chamber of Commerce and Industry of the South (CCIS) all manage their own merchant records. The right for CCIT, CCIC, CCIS to administer their own merchant registries is derived from a concession in Honduras’ secured transactions law.																																				Intellectual Property Rights										Honduras is mentioned but not listed in United States Trade Representative’s 2023 Special 301 Report or its 2022 Review of Notorious Markets for Counterfeiting and Piracy.The legislative framework for the protection of intellectual property (IP) rights, which includes the Honduran copyright law and its industrial property law, is generally adequate, but industry experts say the laws are poorly enforced. Honduras has enacted legislation to implement its obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) of the World Trade Organization (WTO). Honduran law protects data exclusivity for a period of five years and protects process patents, but does not recognize second-use patents. The Property Institute and Public Ministry handle IP protection and enforcement. No new IP related laws or regulations have been enacted in the past year and the government is currently not pursuing any new reforms.CAFTA-DR Chapter 15 on Intellectual Property Rights further provides for the protection and enforcement of a range of IP rights, which are consistent with U.S. and international standards. There are also provisions on deterrence of piracy and counterfeiting. Additionally, CAFTA-DR provides authorities the ability to confiscate pirated goods and investigate intellectual property cases on their own initiative.The United States continues to have significant concerns regarding intellectual property (IP) protection and enforcement in Honduras, including with respect to online and software piracy, cable signal piracy, and the distribution and sale of counterfeit and pirated goods. The United States will continue to urge Honduras to fully enforce its IP laws. Additionally, the United States continues to urge Honduras to provide greater clarity regarding the scope of protection for geographical indications (GIs), particularly ensuring that all producers are able to use common food names, including any that are elements of a compound GI.The Honduran legal framework provides deterrence against piracy and counterfeiting by requiring the seizure, forfeiture, and destruction of counterfeit and pirated goods and the equipment used to produce them. The law also provides for statutory damages for copyright and trademark infringement, to ensure monetary damages are awarded even when losses associated with an infringement are difficult to assign.Digital piracy is widespread and frequently ignored in Honduras, especially by telecommunications companies. The Special Prosecutor for IP will not investigate a case unless it receives a complaint from a rights holder. Often, rights holders do not submit complaints because they do not want to navigate the bureaucratic process or fear they will lose business. In addition, sentencing for IP crimes remains ineffective to deter future violations. IP violators typically receive a three-to-six-year sentence and an approximately $2,000 fine. If a sentence is less than five years, however, the convicted party can choose to pay a larger fine and not serve any jail time.																																												6. Financial Sector						    																																																Capital Markets and Portfolio Investment										There are no government restrictions on foreign investors’ access to local credit markets, though the local banking system generally extends only limited amounts of credit. Investors should not consider local banks a significant capital resource for new foreign ventures unless they use specific business development credit lines made available by bilateral or multilateral financial institutions such as the Central American Bank for Economic Integration.A limited number of credit instruments are available in the local market. The only security exchange operating in the country is the Central American Securities Exchange (BCV) in Tegucigalpa, but investors should exercise caution before buying securities listed on it. Supervised by the National Banking and Insurance Commission (CNBS), the BCV theoretically offers instruments to trade bankers’ acceptances, repurchase agreements, short-term promissory notes, Honduran government private debt conversion bonds, and land reform repayment bonds. In practice, however, the BCV is almost entirely composed of short- and medium-term government securities and no formal secondary market for these bonds exists.A few banks have offered fixed rate and floating rate notes with maturities of up to three years, but outside of the banks’ issuances, the private sector does not sell debt or corporate stock on the exchange. Any private business is eligible to trade its financial instruments on the BCV, and firms that participate are subject to a rigorous screening process, including public disclosure and ratings by a recognized rating agency. Historically, most traded firms have had economic ties to the other business and financial groups represented as shareholders of the exchange. As a result, risk management practices are lax and public confidence in the institution is limited.The Honduran Public-Private Partnership, CONFIANZA, has operated since 2015 and provides loan guarantees to regional banks to facilitate financing to micro-, small-, and medium-sized enterprises in Honduras. CONFIANZA administers six funds for specific sectors of the economy and partners with over 40 financial institutions in Honduras.																																				Money and Banking System										The Honduran financial system is comprised of commercial banks, state-owned banks, savings and loans institutions, and financial companies. There are currently 15 commercial banks, and 10 financial groups operating in Honduras. While access to credit remains limited in Honduras, especially for historically underserved populations, the financial sector is a source of economic stability in the country. Honduras has a highly professional Central Bank and an effective banking regulator, the Comisión Nacional de Bancos y Seguros. There is no offshore banking or homegrown blockchain technology in Honduras.																																				Foreign Exchange and Remittances																										Foreign Exchange						Article 10.8 of CAFTA-DR ensures the free transfer of funds related to a covered investment. Local financial institutions freely exchange U.S. dollars and other foreign currencies. Foreigners may open bank accounts with a valid passport. For deposits exceeding the maximum deposits specified for different account types (corporate or small-medium enterprises), banks require documentation verifying the fund’s origin.In principle, the Investment Law guarantees foreign investors access to foreign currency needed to transfer funds associated with their investments in Honduras, including:Imports of goods and services necessary to operatePayment of royalty fees, rents, annuities, and technical assistanceRemittance of dividends and capital repatriationArtificially low interest rates compared to the region led to a significant outflow of dollars chasing higher returns during the past year. As dollars continued to flow out of the country, many importers were unable to secure enough dollars to purchase the imports they needed to sustain their enterprises. Ultimately, the BCH reinstituted the direct auction of dollars in order to address excess demand, but many businesses continue to report difficulty securing sufficient foreign exchange. This shortage is likely to continue.						Remittance Policies						The Investment Law guarantees investors the right to remit their investment returns and, if they liquidate their investments, to remit the principal capital invested. Foreign investors that choose to remit their investment proceeds from Honduras do so through foreign exchange transactions at Honduran banks or foreign banks operating in Honduras. These exchange transactions are subject to the same foreign exchange process and regulation as other transactions.						Sovereign Wealth Funds						Honduras does not have a sovereign wealth fund.																										7. State-Owned Enterprises										Most state-owned enterprises are in telecommunications, electricity, water utilities, mail services, hospitals, railroads, banking, and commercial ports. There is no published list of Honduran SOEs. The main state-owned Honduran telephone company, Hondutel, has private contracts with eight foreign and domestic carriers. The GOH has yet to establish a legal framework for foreign companies to obtain licenses and concessions to provide long distance and international calling. As a result, investors remain unsure if they can become fully independent telecommunication service providers.The state-owned National Electric Energy Company (ENEE) is the single largest contributor to the country’s fiscal deficit. Due to years of mismanagement and corruption, ENEE loses over $30 million every month and its debt amounts to more than 10 percent of Honduran GDP. With the May 2022 energy law, the government reversed energy reform legislation that called for the separation of ENEE into three independent units for distribution, transmission, and generation. The law also weakened the electricity regulator and eliminated the independent systems operator. Electricity subsector experts say that dispatch decisions have become much less transparent since the elimination of the systems operator, a disincentive for new investment. The electrical subsector faces serious structural problems, including high electricity system losses, a transmission system in need of upgrades, vulnerability of generation costs to volatile international oil prices, an electricity tariff that does not reflect actual costs, and the high costs of long-term power purchase agreements (PPAs), which have often been awarded directly to companies with political connections instead of via a fair and transparent tendering and procurement process. Many businesses have installed on-site power generation systems to supplement or substitute for power from ENEE due to frequent blackouts and high tariffs.Honduran law grants municipalities the right to manage water distribution and to grant concessions to private enterprises. Major cities with public-private concessions include San Pedro Sula, Puerto Cortes, and Choloma. The state water authority National Autonomous Aqueduct and Sewer Service (SANAA) manages Tegucigalpa’s water distribution. Persistent water shortages are another constraint on private enterprise in Honduras, especially during the spring dry season.The Honduran National Port Company (ENP) is the state-owned organization that oversees management of the country’s government-operated maritime ports, including Puerto Cortes, La Ceiba, Puerto Castilla, and San Lorenzo. Private companies Central American Port Operators and Maritime Ports of Honduras have 30-year concessions to operate container and bulk shipping facilities at Honduras’ principal port Puerto Cortes.Two SOE banks include the National Agriculture Development Bank (BANADESA) and the Honduran Bank for Production and Housing (BANHPROVI).																Privatization Program						The Honduran government is not seeking to privatize state-owned enterprises and, in fact, has approved legal reforms to give the government broader authority to take over private enterprises, specifically via the May 2022 energy reform law.																																		8. Responsible Business Conduct						    																						Awareness of the importance of Responsible Business Conduct (RBC) is growing among both producers and consumers in Honduras. An increasing number of local and foreign companies operating in Honduras include conduct-related responsibility practices in their business strategies. The Honduran Corporate Social Responsibility Foundation (FUNDAHRSE) has become a strong proponent in its efforts to promote transparency in the business climate and provides the Honduran private sector, particularly small- and medium-sized businesses, with the skills to engage in responsible business practices. FUNDAHRSE’s approximately 110 members can apply for the foundation’s “Corporate Social Responsibility Enterprise” seal for exemplary responsible business conduct involving work in areas related to health, education, environment, codes of ethics, employment relations, and responsible marketing.RBC related to the environment and outreach to local communities is especially important to the success of investment projects in Honduras. Several major foreign investment projects in Honduras have stalled due to concerns about environmental impact, land rights issues, lack of transparency, and problematic consultative processes with local communities, particularly indigenous communities. Although the International Labor Organization Convention 169 on Indigenous and Tribal Peoples was ratified by the GOH in 1995 and Honduras voted in favor of UN’s Indigenous People’s rights in 2007, there is still much to do in the area. There is still a need for foreign investors to build trust with local communities, while employing international best practices and standards to reduce the risk of conflict and promote sustainable and equitable development.Examples of international best practices include the following:Voluntary Principles on Security and Human Rights InitiativeThe UN Guiding Principles on Business and Human RightsThe Organization for Economic Co-operation and Development Guidelines for Multinational Enterprises.																										Climate Issues										GOH has a National Adaptation and Climate Strategy and a Biodiversity Strategy.  The Castro Administration has manifested their willingness to support conservation and climate adaptation efforts.  Early in 2022, the administration reactivated the Environmental Cabinet composed of Ministries of Environment, Forestry, Agriculture, Energy, Economic Development and Finance and the Protected Areas and Wildlife Institute.  The purpose of this body is to coordinate interagency efforts to address climate change, biodiversity conservation and Forestry Management.The GOH has not established policies to reach net-zero carbon emissions by 2050. However, in collaboration with the support of the UN, GOH conducted sectoral studies to determine Nationally Determined Contributions (NDC) and drafted a greenhouse gasses mitigation strategy. While sectoral studies provided recommendations and targets for NDCs, these recommendations have not been translated into official policy. The NDC document reports that the contributions and goals were established in consultation and with the participation of the private sector and says that the private sector will contribute to reaching the goals but does not identify specific actions.Early in 2022, the GOH suspended the ecotax to support efforts to administer protected areas, which generally adds additional taxes on imported cars.At this time, the GOH has not implemented public procurement policies that include environmental and green growth considerations such as resource-use efficiency, pollution abatement, or climate resilience.																																												9. Corruption						    																						U.S. businesses and citizens report corruption in the public sector and the judiciary is a significant constraint to investment in Honduras. Historically, corruption has been pervasive in government procurement, issuance of government permits, customs, real estate transactions (particularly land title transfers), performance requirements, and the regulatory system.The Castro administration continues to negotiate with the UN on establishing a UN-led International Commission against Impunity and Corruption in Honduras (CICIH). A technical assessment team is expected to arrive in mid-2023 to begin assessing what legal changes would be required for an Anticorruption Commission to operate successfully. A broad amnesty law passed in February 2022 likely would prevent the anti-corruption commission from investigating a significant number of cases and the extent to which CICIH would be independent and have investigative authority is an open question. The United States Foreign Corrupt Practices Act (FCPA) deems it unlawful for a U.S. person, and certain foreign issuers of securities to make corrupt payments to foreign public officials for the purpose of obtaining or retaining business for directing business to any person. The FCPA also applies to foreign firms and persons who take any act in furtherance of such a corrupt payment while in the United States. For more information, see the FCPA Lay-Person’s Guide:     https://www.justice.gov/criminal-fraud .Honduras ratified the UN Anticorruption Convention in December 2005. The UN Convention requires countries to establish criminal penalties for a wide range of acts of corruption. The UN Convention covers a broad range of issues from basic forms of corruption such as bribery and solicitation, embezzlement, trading in influence, and the concealment and laundering of the proceeds of corruption. The UN Convention contains transnational business bribery provisions that are functionally similar to those in the Organization for Economic Cooperation and Development Anti-Bribery Convention.Honduras ratified the Inter-American Convention against Corruption (OAS Convention) in 1998. The OAS Convention establishes a set of preventive measures against corruption; provides for the criminalization of certain acts of corruption, including transnational bribery and illicit enrichment; and contains a series of provisions to strengthen the cooperation between its states’ parties in areas such as mutual legal assistance and technical cooperation.Table 1: Key Metrics and RankingsMeasureYearIndex/RankingTI Corruption Index202223/100, 157 of 180MCC Government EffectivenessFY 2023-0.33 (19 percent)MCC Rule of LawFY 2023-0.62 (6 percent)MCC Control of CorruptionFY 2023-0.60 (6 percent)																																		10. Political and Security Environment						    																						Crime and violence rates remain high and add cost and disincentive to investments. Demonstrations occur regularly in Honduras and political uncertainty poses a challenge to ongoing stability. Violent “colectivo” groups associated with the ruling party frequently disrupt business activities, including at medical centers.Although violent crime remains a persistent problem, Honduras has reduced homicides to less than 40 per 100,000 inhabitants. Cases of violence, extortion, and kidnapping are still common, particularly in urban areas where gang presence is more pervasive. Drug traffickers continue to use Honduras as a transit point for cocaine and other narcotics en route to the United States and Europe, which fuels local turf battles in some areas and injects illicit funds into judicial proceedings and local governance structures to distort justice. The business community historically had been a target of kidnapping for ransom, but the number of such kidnappings dropped from 92 in 2013 to 15 in 2021, primarily through the work of the USG-supported Honduran National Police National Anti-Kidnapping Unit. Although violent crime rates are trending downward, corruption and white-collar crime, including money laundering, negatively affect economic prosperity and stability for the business community.																																		11. Labor Policies and Practices						    																						The Honduran Labor Law prescribes a maximum eight-hour workday, 44-hour workweek, and at least one 24-hour rest period per week. The Labor Code provides for paid national holidays and annual leave. Most employment sectors also receive two one-month bonuses as part of the base salary, known as the 13th and 14th month salary, issued in mid-December and mid-June, respectively. New hires receive a prorated amount based on time-in-service during their first year of employment. The Labor Code requires companies to pay one month’s salary to employees terminated without cause. Companies do not owe severance to employees who resign or are terminated for cause. Employees terminated for cause can contest the basis for the termination in court to claim severance. There are no government-provided unemployment benefits in Honduras, although unemployed individuals may have access to their accumulated pension funds.The Secretariat of Labor and Social Security (SETRASS) is responsible for registering collective bargaining agreements. The Labor Code prohibits the employment of persons under the age of 14. Minors between the ages of 14 and 18 must receive special permission from SETRASS to work. The majority of the violations of the labor-related provisions of the children’s code occur in the agricultural sector and informal economy.Honduras has a significant informal economy, which according to last available data from a 2017 World Bank study, nearly 83 percent of all Hondurans were employed in informal sector positions, one of the highest in the region. The GOH has sought to incentivize informal firms to take steps to formalize, including offering a consolidated registration process at no-cost to business owners. Many informal business owners, though, indicate that the reduction of tax incentives from five years to three and the overly complex tax system continue to dissuade more companies from formalizing.While Honduran labor law closely mirrors International Labor Organization standards, the U.S. Department of Labor has raised serious concerns regarding the effective enforcement of Honduran labor laws. Labor organizations allege the SETRASS fails to enforce labor laws, including laws on the right to form unions, reinstating employees unjustly fired for union activities, child labor, minimum wages, hours of work, and occupational safety and health. A 2015 U.S. Department of Labor report provided recommendations to address labor concerns in Honduras and called for a monitoring and action plan (MAP) to improve labor law enforcement in Honduras following a 2012 submission brought under the labor chapter of CAFTA-DR. While the government has made significant progress toward addressing areas of concern, outstanding issues to completing the Honduran government’s obligations under the MAP include resolution of emblematic collective bargaining cases and the enforcement and collection of fines for labor violations.As mentioned above, in April 2022, President Castro signed the repeal of the Hourly Employment Law. Labor groups had alleged that some employers used hourly contracts to avoid responsibility for severance, provide employee benefits, and prevent union formation. The repeal did not stipulate the process for transitioning employees from hourly to salaried, but it did prevent the termination of employees.The U.S. Department of State Country Report on Human Rights Practices describes a number of labor and human rights compliance issues that affect the Honduran labor market:  https://www.state.gov/reports/2022-country-reports-on-human-rights-practices/honduras/ . These include employers’ anti-union discrimination, refusal to engage in collective bargaining, and employer control of unions.																																		12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs						    																						In 2022, the DFC provided a $7.0 million loan portfolio guarantee to Lafise Bank to back on-lending to Honduran small and medium sized enterprises that support gender equity and inclusion as well as companies in the health care industry. Additionally, DFC contributed $181,500 in technical assistance to Honduran based AgroMoney, a lender to small and medium sized firms in the agricultural sector. USAID has identified more than 30 investment deals, valued collectively at over $950 million, that could benefit from DFC financing.																																		13. Foreign Direct Investment Statistics						    																						Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy Host Country Statistical source*USG or international statistical sourceUSG or International Source of Data:  BEA; IMF; Eurostat; UNCTAD, OtherEconomic DataYearAmountYearAmountHost Country Gross Domestic Product (GDP) ($M USD)N/AN/A2021$28.49www.worldbank.org/en/countryForeign Direct InvestmentHost Country Statistical source*USG or international statistical sourceUSG or international Source of data:  BEA; IMF; Eurostat; UNCTAD, OtherU.S. FDI in partner country ($USD, stock positions)N/AN/A2021$1.251 billionBEA data available at https://apps.bea.gov/international/factsheet/Host country’s FDI in the United States ($USD, stock positions)N/AN/A2021-$99 billionBEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data Total inbound stock of FDI as % host GDPN/AN/A20213.1%UNCTAD data available athttps://unctad.org/topic/investment/world-investment-report* Source for Host Country Data:  N/A  Table 3: Sources and Destination of FDI Direct Investment from/in Counterpart Economy Data From Top Five Sources/To Top Five Destinations (US Dollars, Millions) Inward Direct Investment Outward Direct Investment Total Inward17,598100%Total Outward2,845100%USA4,57726%Panama1,35248%Panama3,08818%Guatemala36613%Guatemala1,80310%Costa Rica2268%Colombia1,4268%El Salvador2097%Mexico1,2327%Colombia1254%&#8220;0&#8221; reflects amounts rounded to +/- USD 500,000. Source:  IMF Coordinated Direct Investment Survey (CDIS)																																		14. Contact for More Information 						    																						Scott HansenEconomic CounselorAvenida La PazTegucigalpa M.D.C.Honduras+504 2236-9320 x4178 Hansensw@state.gov  																										    							View report by:																				Albania											Algeria											Andorra											Angola											Antigua and Barbuda											Argentina											Armenia											Australia											Austria											Azerbaijan											The Bahamas											Bahrain											Bangladesh											Barbados											Belarus											Belgium											Belize											Benin											Bolivia											Bosnia and Herzegovina											Botswana											Brazil											Brunei											Bulgaria											Burkina Faso											Burma											Burundi											Cabo Verde											Cambodia											Cameroon											Canada											Chile											China											Colombia											Costa Rica											Côte d’Ivoire											Croatia											Cyprus											Czechia											Democratic Republic of the Congo											Denmark											Djibouti											Dominica											Dominican Republic											Ecuador											Egypt											El Salvador											Equatorial Guinea											Eritrea											Estonia											Eswatini											Ethiopia											Fiji											Finland											France and Monaco											Gabon											The Gambia											Georgia											Germany											Ghana											Greece											Grenada											Guatemala											Guinea											Guyana											Honduras											Haiti											Hong Kong											Hungary											Iceland											India											Indonesia											Iraq											Ireland											Israel											Italy											Jamaica											Japan											Jordan											Kazakhstan											Kenya											Kosovo											Kyrgyz Republic											Laos											Latvia											Lebanon											Lesotho											Liberia											Libya											Lithuania											Luxembourg											Macau											Madagascar											Malawi											Malaysia											Maldives											Mali											Malta											Marshall Islands											Mauritania											Mauritius											Mexico											Micronesia											Moldova											Mongolia											Montenegro											Morocco											Mozambique											Namibia											Nepal											Netherlands											New Zealand											Nicaragua											Niger											Nigeria											North Macedonia											Norway											Oman											Pakistan											Palau											Panama											Papua New Guinea											Paraguay											Peru											Philippines											Poland											Portugal											Qatar											Republic of the Congo											Romania											Rwanda											Saint Kitts and Nevis											Saint Lucia											Saint Vincent and the Grenadines											Samoa											Sao Tome and Principe											Saudi Arabia											Senegal											Serbia											Seychelles											Sierra Leone											Singapore											Slovakia											Slovenia											Somalia											South Africa											South Korea											South Sudan											Spain											Sri Lanka											Suriname											Sweden											Switzerland											Taiwan											Tajikistan											Tanzania											Thailand											Timor-Leste											Togo											Trinidad and Tobago											Tunisia											Türkiye											United Arab Emirates											Uganda											Ukraine											United Kingdom											Uruguay											Uzbekistan											Vietnam											West Bank and Gaza											Zambia											Zimbabwe															Build A Custom Report																						On This Page				search													>																										EXECUTIVE SUMMARY																1. Openness To, and Restrictions Upon, Foreign Investment																																							Policies Towards Foreign Direct Investment																																																						Limits on Foreign Control and Right to Private Ownership and Establishment																																																						Other Investment Policy Reviews																																																						Business Facilitation																																																						Outward Investment																																																			2. Bilateral Investment and Taxation Treaties																3. Legal Regime																																							Transparency of the Regulatory System																																																						International Regulatory Considerations																																																						Legal System and Judicial Independence																																																						Laws and Regulations on Foreign Direct Investment																																																						Competition and Antitrust Laws																																																						Expropriation and Compensation																																																						Dispute Settlement																																																						Investor-State Dispute Settlement																																																						International Commercial Arbitration and Foreign Courts																																																						Bankruptcy Regulations																																																			4. Industrial Policies																																							Investment Incentives																																																						Foreign Trade Zones/Free Ports/Trade Facilitation																																																						Performance and Data Localization Requirements																																																			5. Protection of Property Rights																																							Real Property																																																						Intellectual Property Rights																																																			6. Financial Sector																																							Capital Markets and Portfolio Investment																																																						Money and Banking System																																																						Foreign Exchange and Remittances																																																				Foreign Exchange																																												Remittance Policies																																												Sovereign Wealth Funds																																																																																				7. State-Owned Enterprises																																																				Privatization Program																																																																																	8. Responsible Business Conduct																																							Climate Issues																																																			9. Corruption																10. Political and Security Environment																11. Labor Policies and Practices																12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs																13. Foreign Direct Investment Statistics																14. Contact for More Information 																						Tags																					Bureau of Economic and Business Affairs																								Bureau of Western Hemisphere Affairs																								Honduras
- Report to Congress on A Strategy to Increase the Use of Local Organizations and Staff Bureau of Western Hemisphere AffairsBackgroundAs part of the Administration’s commitment to implement the U.S. Strategy for Addressing the Root Causes of Migration in Central America (RCS), on November 4, 2021, U.S. Agency for International Development (USAID) Administrator Power announced Centroamérica Local, an initiative to dedicate $300 million from FY 2021 through FY 2025, subject to funding availability, to transform and expand engagement with local organizations and communities in the region. Under this initiative, USAID missions in El Salvador, Guatemala, and Honduras are working to increase the amount of funding available to capable local partners; strengthen local capacity, including the ability to receive and manage funds; promote flexibility for USAID and local partners to collaborate effectively; and program responsively to local communities’ priorities. In partnership with local organizations and communities – including Indigenous community and women-led organizations – USAID missions in the region are striving to foster local leadership in agenda-setting, decision-making, management of resources, and accountability. USAID also continues to take steps to provide effective staffing to oversee and manage this increase in local activities.In the FY 2022 State-Foreign Operations Appropriations Act, Congress directed we should not make available “less than $100 million” for programs supporting locally led development in El Salvador, Guatemala, and Honduras in line with this initiative. This funding includes flexibility to use up to 15 percent of the directed funds for administrative and oversight costs for purposes including hiring and training of staff to oversee an expanded portfolio of direct local awards. In line with the interpretation of “locally led development” described in the prior iteration of this report, missions in the region have set the following budget estimates:Table: Mission Region Budget EstimatesFunds TypeUSAIDCentralAmericaRegionalEl SalvadorGuatemalaHondurasLocally LedDevelopmentEstimates withFY 2022Funds for Direct Awards/ Flexible Authorities$6,000,000$17,000,000$24,000,000$18,000,000$65,000,000Enabling Fund/ Sub-Awards$ 4,000,000$11,000,000$0*$12,000,000$27,000,000Administrative and Oversight Expenses$1,500,000$3,000,000$3,000,000$2,500,000$10,000,000Total$11,500,000$31,000,000$27,000,000$30,500,000$100,000,000*Final calculation pendingAs of January 2023, the USAID missions have not yet received their FY 2022 funding. USAID will submit Congressional notifications for the three countries as soon as possible.USAID continues to advance Centroamérica Local objectives as a contributing effort under its agency-wide localization efforts. An additional, optional $10 million for each Centroamérica Local mission ($30 million total) has been allocated through the Local Works program to support locally led capacity building, expanded direct engagement, and a deepened focus on inclusive development within the missions’ portfolios. These concepts are presently in design in each mission, in close collaboration with the Local Works team in the Bureau for Development, Democracy and Innovation. Learning from Centroamérica Local continues to contribute to the refinement of key approaches, tools, policies, and operational efforts to lower barriers to effective partnership with local development actors globally. These include informing the development of the Africa Localization regional initiative, informing USAID’s Office of Acquisition and Assistance-led efforts to address translation of final applications (requirements to submit applications in English is often a barrier for local applicants), and promoting good practices including restricted eligibility under assistance and direct listening to local communities that enhance locally led development.Update on Strategy for Scaling Up Use of Local OrganizationsFunding USAID obligates to a local entity as a prime partner will count toward that mission’s Centroamérica Local direct funding targets for FY 2021- FY 2025, using the same method utilized for the whole-of-agency local direct funding target of 25 percent by 2025.1 The actuals for these targets are calculated based on the year in which funds are obligated to the local entity (not the fiscal year of the funds). As of January 2023, the missions are validating data for both sets of targets and which they will make publicly available in March.Additionally, USAID missions in the region use comprehensive and contextually tailored approaches to strengthen local capacity, to enhance opportunities and capabilities for local people to lead and sustain their own development, and to expand access to partnership opportunities to new local partners – particularly those representing marginalized communities. For example, in Guatemala, USAID tailors communications to reach new organizations and actors with information on USAID programs and partnership opportunities through expanding the use and support of local and indigenous communication channels. We describe similar efforts to expand local partnerships across all three missions in the sections below.USAID’s Latin America and the Caribbean Bureau is in the process of hiring a full-time localization advisor to serve as a primary point of contact connecting missions’ localization needs with Washington support and resources.El Salvador and the Regional Mission for Central America &amp; Mexico (E-CAM)As of January 2023, the USAID/El Salvador and Central America &amp; Mexico Regional (E-CAM) Mission is working in El Salvador with a total of nine direct local partners implementing 10 awards, representing 31 percent of all activities in the mission’s portfolio to advance the RCS. The total estimated amount of these existing awards is $74 million over the full life of the awards, representing 13 percent of the mission’s total $565 million in existing commitments.USAID/E-CAM has made extensive use of the New Partnerships Initiative (NPI) Incubator contract to strengthen both the mission’s knowledge of the range of potential local partners and local entities’ ability to access opportunities to partner with USAID. The mission’s first task order under the NPI Incubator commissioned a partner landscape analysis, which directly informed capacity strengthening programming for new and local entities to better access and execute on opportunities to work with USAID. The capacity strengthening covered topics like monitoring, evaluation, and learning, registering for a Unique Entity Identifier (UEI) in SAM.gov, financial management, and other topics. In addition to direct capacity strengthening for 12 local Salvadoran organizations (two of which are current USAID local partners and 10 of which are potential future USAID partners), the mission launched development of a capacity strengthening curriculum in January 2023. The mission is piloting the curriculum with an initial cohort of 90 individuals representing 30 potential local organization partners; additional cohorts are anticipated to reach an additional 60 organizations.The mission is also expanding outreach to potential local partners. Public webinars in Spanish on opportunities for local organizations to partner under the mission’s Annual Program Statement (APS) and its addenda, such as one for private sector engagement, have been attended by more than 1,000 individuals from local organizations, contributing to 83 concept applications submitted by local organizations under issued addenda to date; this figure is expected to rise as additional addenda are released. Further, E-CAM recently amended the APS to allow for submission of concept applications for regional activities.In 2022, USAID/E-CAM formed a Localization Team and developed a Localization Strategy that directs the mission’s efforts to engage, strengthen, and fund local organizations in a manner that enables them to be effective and efficient in the implementation of programs with a vision of sustainability of the local organizations in the region. The strategy takes into account that organizations will require substantial support in technical assistance, equipment, and staff training in order to implement high impact development activities. As a result, the mission expanded its approach to include greater input and leadership from the mission’s locally employed staff, including outreach to retired USAID staff and securing the services of external experts, such as the NPI Incubator, to help strengthen the capacities of local organizations, some of them new partners to USAID.GuatemalaIn late 2021, USAID/Guatemala developed an internal localization framework that sets forth the mission’s goal to support Guatemalans in building a society where local actors are empowered and possess the resources and capacity to design and lead efforts to improve their own communities and tackle priority development challenges. The framework’s three pillars include advancing local leadership of Guatemala’s development agenda, expanding and diversifying engagement with local development actors, and strengthening both mission and local capacity to work in partnership together. In late 2022, USAID expanded this priority set to include an explicit focus on inclusive development, especially Indigenous people- led organizations.Of the mission’s current 29 bilateral awards, 24 (82 percent) involve some aspect of local partner involvement, including direct awards, transition awards, sub-grant programs or grants under contract, and local organizational capacity strengthening. Of these, USAID/Guatemala currently has six direct awards with local organizations with total estimated amounts (totaling approximately $129 million over the life of these projects, representing 17 percent of the mission’s total $756 million in existing commitments.Many of the mission’s direct local awards are with Guatemalan partners that previously were sub-partners under U.S.-based and international development partners. The institutional strengthening provided by those traditional partners to local entities enabled these local partners to go on to receive funding directly from USAID.Throughout calendar year 2023, USAID/Guatemala will continue to expand its outreach and deepen its relationships with local organizations and communities, including through capacity strengthening efforts and increased direct operational and programmatic engagement with local communities and organizations.Underpinning these efforts, the mission will renew focus on inclusive development aligned with the mission’s Indigenous Peoples Engagement Strategy. USAID/Guatemala has utilized the NPI Incubator contract to conduct a partner landscape analysis, which will develop a database of potential local partners, many of which are Indigenous, and community led. The mission will conduct specialized outreach and training for Indigenous-led organizations and will closely analyze Indigenous-led organizations’ capacity and map each organization&#8217;s geographic focus to support more inclusive development for targeted beneficiary groups, and to foster meaningful partnerships with Indigenous communities.HondurasUSAID/Honduras currently has seven direct awards with local organizations. Four of these have been issued since the previous report to Congress (July 2022) to first-time direct partners with USAID. USAID/Honduras’s portfolio of local direct awards addresses a range of issues aligned with the RCS and local development priorities including deterring irregular migration through the generation of economic opportunities, food security assistance for coffee farmers, services for at-risk youth in communities with high rates of violence and out-migration, support to locally led anti-corruption efforts, and support for local human rights advocates. The combined total estimated amount of all seven awards is $46.8 million across multiple fiscal years.In order to grow its localization portfolio, USAID/Honduras launched its Expanding Partnerships and Advancing Localization Annual Program Statement (Localization APS) in May 2022 with a ceiling of $49.5 million, and restricted eligibility to only local entities.The mission has already issued two addenda under this APS for:Early Childhood Education for Youth Employability, andBuilding Effective Legislature and Citizen Oversight. The mission expects to move forward with co- creation under the first addendum with the successful applicants in early calendar year 2023, while applications for the second addendum were due February 2023. USAID/Honduras is preparing two more addenda under the Localization APS: one focused on media and human rights, and one focused on gender-based violence.Update on Strategy for Scaling Up Use of Local StaffUSAID missions in Northern Central America have the necessary authorities and anticipate having the necessary resources to hire program-funded staff to implement the RCS, including localization efforts, pending receipt of FY 2022 funds, including locally employed Cooperating Country National Personal Services Contractors (CCN PSCs, colloquially referred to as Foreign Service Nationals or FSNs), U.S. Personal Services Contractors (U.S. PSCs), Third-Country National Personal Services Contractors (TCN PSCs), and Institutional Support Contractors. As of January 15, 2023, staffing levels for all CCN PSCs, PSCs, and other non-direct hiring mechanisms are 84 in USAID/E-CAM, 81 in USAID/Guatemala, and 76 in USAID/Honduras, which reflects the amount of program funding spent at each mission. While USAID mission directors have authority to hire local staff based on the program funding available, increases in hiring are limited by the overall office space footprint and embassy guidance on the prioritization of staffing increases, as determined by the ambassador.USAID is committed to empowering its CCN PSC workforce as a key component of localization. CCN PSC warrant guidance updated in 2022 removed the previous cap of two CCN PSC administrative warrants per mission which makes it possible for CCN PSC staff to take on an expanded role in managing grants and contracts. This change makes it easier for missions to manage expanded acquisition and assistance portfolios with a higher number of smaller awards to local entities. Additionally, it creates new leadership and career development opportunities for CCN PSC staff members.In August 2022, Embassy San Salvador approved the establishment of an additional 16 CCN PSC positions in USAID/E-CAM to support localization efforts. With these positions, the mission aims to further increase its number of procurement specialists, program managers, technical and financial experts, as well as administrative support staff enabling the mission’s commitment to work directly with local partners, while meeting significant additional programmatic needs for oversight, management, and reporting. USAID/E-CAM continues to benefit from three CCN PSC administrative warrants received in May 2022.USAID/Guatemala increased administration and oversight allocations to adapt to additional operating costs, including the costs of the Guatemala Support Services (GSS) contract and eight new full-time positions. With the launch of USAID’s GSS platform in September 2022, the mission is now hiring temporary staff and consultants to support mission personnel in advancing its localization goals.During calendar year 2023, USAID/Guatemala will continue to reassess its staffing needs to determine the optimal footprint and additional resources required to implement future years of its localization strategy. Factors include the need for a dedicated localization coordinator and staff support to conduct the Non-US Pre- Award Survey with new local partners (necessary to award cooperative agreements), technical support, and third-party monitors. The mission aims to further increase its levels of contract and full-time staff, including procurement specialists, Indigenous community advisors, program managers, and administrative support staff. The mission will ensure all staff are trained in relevant language skills and regulations for working directly with local partners. Staffing considerations will include identifying actions to motivate and incentivize staff to advance localization and internal coaching on local awards management.On August 22, 2022, U.S. Ambassador to Honduras Laura Dogu approved 15 new additional CCN PSC positions in USAID/Honduras to support localization efforts. For the next year, USAID/Honduras set an aggressive target of filling 30 of the mission’s 45 currently vacant positions, including the 15 specific positions for localization. As of September 2022, USAID/Honduras completed its selection process for three new CCN procurement specialist positions, which will augment the three existing CCN senior procurement specialist positions (one of whom holds an administrative warrant), and two other mid-level CCN procurement specialists in the mission. Also, in September 2022, USAID/Honduras signed a memorandum of understanding using a central staffing mechanism managed in USAID/Washington to obtain an additional remote mid-level procurement specialist, to supplement the two full-time institutional support contractor senior procurement specialists already in place under the same contract. One supervisory foreign service national/deputy office director continues to work in the executive office. Both the Centroamérica local targets and agency-wide target for local direct funding use data on obligations based on real transactions collected and reported in the GLAAS award management system, looking at total development and humanitarian acquisition and assistance funds obligated in GLAAS to local partners. For partners that are registered in SAM, a transaction is counted where the “country of incorporation” data from SAM.gov, “the physical address country” from SAM.gov, and “place of performance country” in GLAAS all match and are not the United States. For partners that are not fully registered in SAM or who have a generic unique entity ID (UEI), a transaction is counted where the GLAAS vendor country and GLAAS place of performance country are the same and are not the United States. These figures exclude government to government assistance (not relevant for El Salvador, Guatemala, or Honduras); interagency agreements; Public International Organizations; and transactions not captured in GLAAS (including Host Country Contracts).