BizCLIR

Corruption generates various kinds of financial crimes, including bribery, theft, and money laundering. The money laundering in Honduras, according to the U.S. Drug Enforcement Administration (DEA) country report of 2000, results from a variety of crimes, including drug-trafficking, auto theft, kidnapping, bank fraud, prostitution, and corruption. Enforcement efforts since 2000 against auto theft, kidnapping, and bank fraud may have altered that mix.
The DEA’s country report of 2000 states, “Honduras is neither a major money laundering center, nor a major offshore financial center.” Operating of offshore financial institutions is prohibited.

The report identifies banks, currency exchange houses, and front companies as the locus of money laundering in Honduras. Casinos are also possible avenues for money laundering. Although not a major money laundering location, Honduras has an increasing level of crime—much of which is drug-related—which produces a greater volume of money laundering.

The banking sector, which has until recently been largely unregulated, has been one focus for money laundering. Although the economy is weak and the country is not a regional financial center, the banks appear to be prospering. The banking sector, however, has a history of bankruptcies resulting from questionable loans.
The Associated Press has recently reported the possibility of terrorist financing of crime in Honduras, something that has not surfaced in our previous reports on financial crimes. The Honduran government, as confirmed by the President and Security Minister, is investigating reports that Al Qaeda is financing gangs that control the trafficking in narcotics and arms between Central America and the United States. The network of gangs includes as many as 600,000 persons, compared with a combined total of 200,000 troops in the armed forces of the entire region.